Second look (see TAE Sep 2) at the "Children who live in the slums, Dubuque, Iowa"
Ilargi: Today's post is unusual(-ly short), for our standards. Stoneleigh was interviewed by Jim Puplava at Financial Sense recently, and she lays out very clearly, once again, what we see coming.
I thought it would be a good idea to make the interview available to all our readers. I haven't come upon a transcript yet, but if anyone wants to do one, let me know at theautomaticearth dot gmail dot com, and I'll be happy to post it here. And I do apologize to Jim Puplava for not being able to get a word in edge-wise.
Update Sunday September 5: I added a transcript of the interview, for which we owe our longtime reader DIY'er a huge THANK YOU!.
Jim Puplava at Financial Sense interviews Stoneleigh
Preparing For and Learning to Survive the Coming Perfect Storm: Part 1
Click here to choose your preferred audio format:
RealPlayer WinAmp Windows Media MP3For further reading, essays (primers) from The Automatic Earth that are mentioned in the interview:
From Financial Sense:Nicole Foss: Nicole M. Foss is co-editor of The Automatic Earth, where she writes under the name Stoneleigh. She and her writing partner have been chronicling and interpreting the on-going credit crunch as the most pressing aspect of our current multi-faceted predicament. The site integrates finance, energy, environment, psychology, population and real politik in order to explain why we find ourselves in a state of crisis and what we can do about it. Prior to the establishment of TAE, she was previously editor of The Oil Drum Canada, where she wrote on peak oil and finance.Her academic qualifications include a BSc in biology from Carleton University in Canada (where she focused primarily on neuroscience and psychology), a post-graduate diploma in air and water pollution control, the common professional examination in law and an LLM in international law in development from the University of Warwick in the UK. She was granted the University Medal for the top science graduate in 1988 and the law school prize for the top law school graduate in 1997.
On this week’s Financial Sense Newshour, Nicole lays out her ominous thesis of a coming deflationary depression, made worse by peak oil. Nicole believes that the depression will cause demand for energy to go down, creating further energy shortages and less and less economic growth.
Transcript
Preparing For and Learning to Survive the Coming Perfect Storm: Part 1, September 4, 2010
JP = Jim Puplava
SL = Stoneleigh
JP: My next guest on the program is Nicole Foss, also known as Stoneleigh, she has a blog, it's calld The Automatic Earth dot blogspot dot com. She joins us as we talk about the Big Picture.
As we've been talking about on this program today, getting prepared for things, whether it's a natural disaster, financial disaster, a major disruption -- in terms of how we live, where we live, and that's why I wanted to have Nicole on the program, because she talks about, sort-of the bigger picture, what are the things coming down the road that you need to be aware of?
So, joining us on the program now is Nicole Foss.
This just from a headline out at Der Spiegel, it says a study by the German military think tank has analyzed how peak oil might change the global economy. The internal draft document, leaked on the Internet, shows for the first time how carefully the German government has considered a potential energy crisis.
SL: I think a lot of governents are taking it very seriously. But they're not mostly talking about it in public because nobody wants to, uh, frighten anybody. But I think there's a lot of that going around, a lot of talking things [?] a lot of confidence games, and... But I think they understand perfectly well that, uh, peak oil is a reality.
01:28
JP: The thing that surprises me, I was reading into your background, one of the reasons I wanted to have you on the show, Nicole, is because of your views on peak oil, because to me, there've been several things that strike me, we've had these big warning signs, in 2005 we had Robert Hirsch's report to the US Government, we had Matt Simmons' Twilight in the Desert, [SL: mmhmm] and we had the peak of conventional oil production.
What has really struck me about this year, is the UK Energy Institute in January, the UK Task Force in February, March it was Oxford University, The University of Kuwait, April it was the US Government, in June it was Lloyd's of London, and on the day you and I are speaking, it's the German Government. And yet you very seldom hear so much of this in the media, you would think they would want to prepare for something like this, or at least take some kind of action, in preparing the public, much in the way they did for war!
SL: I'm not convinced they want the public to know anything about it at all. I think they prefer to keep anything that might be remotely alarming under wraps because they don't want the public to be spooked, I mean we're already pretty much on a knife edge with regard to finance. And so they just do not want anyone spooked at this point. Because there are so many things that could unfold quickly if the confidence game that they've been playing doesn't actually work.
So, I mean you're seeing a lot of cheerleading in financial terms, and really not a lot of real information at all, whether it's energy, whether it's finance, or pretty much anything else, uh that they, there's, the public are being fed this constant diet of pablum, of you know, bread and circuses and and things like that, and if ... there really is very little information out there in the mainstream, if you want to know what's going on, how the world works, you have to go looking for it yourself, and really not very many people do.
03:25
JP: Maybe we oughta start out, Nicole, and just tell our listeners a little bit about your background, and then also your website, The Automatic Earth.
SL: Well I have a rather long and convoluted interdisciplinary background, I was a biologist to start with, then I did environmental science, I worked as an environmental consultant for a while, then I did two law degrees because I was interested in the codification of power hierarchies, and all in the name of finding out how the world really works.
And a lot of work I've done in both biology and law was energy-related, so, and I was a Research Fellow at the Oxford Institute for Energy Studies writing books on nuclear safety in Eastern Europe (or lack thereof), and European energy policy, I worked on... but I studied finance for about 15 years, just independently, because I was fascinated with watching where the money goes, in order to find out where the power flows are, how the power structures work. And what sort of theoretical foundation there might be for the way money works. In order to try to make sense of history, particularly financial history. So I was doing that independently.
I also ran the AgriEnergy Producers' Association of Ontario and I've been involved in grid connection for renewable energy, since I came to Canada. So I've worked on power systems, and ... just this really rather large range of topics, and some people have said to me "Well, couldn't you focus?" but to me the whole point is to look for the biggest possible big picture. And to focus too far down on any one topic is simply to ignore the complexity that tells us what's really going on. I mean I'm ultimately a big picture person because I have focused on all these different areas at different times, and now I'm working on integrating them.
05:15
JP: Nicole, on your website, you have an updated piece that you published as of July 22nd called The Big Picture According to the Automatic Earth -- an Updated Primer Guide. Let's talk a little bit about that, because you begin talking about, you have a link to an article, The Resurgence of Risk, [SL: yes] this goes back to The Oildrum in Canada, which you posted on August of 2007, and then, uh, you also have something, uh, looking at, sort-of, the bubble picture that was developing, the top of the great pyramid, Entropy and Empire, and then the Economics and Nature of Political Crisis.
SL: Ah, this really is trying to integrate all manner of work, and practical and theoretical work, and trying to build the biggest possible big picture. I mean essentially, what I think we're looking at, that really drives a lot of what we're seeing at the moment, is this enormous ponzi scheme. The credit expansion we've experienced, that absolutely is grounded in ponzi dynamics, which is why I wrote At the Top of the Great Pyramid. But I think what we've been looking at is the development of an enormous ponzi scheme, an enormous, you know, Enron times a million where you have a structure that looks huge and robust, but is actually hollowed out from the inside and devoid of structure. And it's very much prone to implosion.
And one of the things we've been trying to make clear at The Automatic Earth all the way through is that it's deflation that we are facing. And the reason for that is that that's how ponzi schemes always end. The excess claims to underlying real wealth are extinguished, and that is deflation by definition. Because deflation is the contraction of money and credit relative to available goods and services. And that's exactly what we're about to see. And I think, a lot of my view about how energy is going to play out, is really going to be quite colored by my view of what's happening with the financial system, and deflation, because the time frame for finance is much shorter than the time frame for changing any available energy supply. So while energy is a key driver on the way up, finance is the key driver on the way down because it plays out so quickly.
And I think over the next few years, finance is going to rewrite the energy debate. Which is not to say that, you know, I in any way deny peak oil. Obviously, I think peak oil is a fact, is a given, but I think that the way finance is going to interact with peak oil is absolutely critical. And I would say though that you can look at peak oil in two ways, you can look at the finances of peak oil, which is what I used to do at The Oil Drum when I was editor at The Oil Drum Canada, and what the whole Oil Drum site has always done, you can also look at it as a phenomenon of human herding behavior, which is completely divorced from the science, this is people's perception of oil supply, of relative scarcity versus glut.
And if you look at the price maximums, the price maximums of oil are driven by perception. Those are not necessarily reflective of the science at any given time. And I was saying at the time when we saw oil at $147 a barrel my view was, our view at The Auotmatic Earth was that we were about to see oil prices fall off a cliff, because of what was about to happen in finance, and that's exactly in fact what happened.
And I think the runup we've had secondarily, I think we're going to see the same kind of thing, I think oil prices are going to fall a long way because we're going to see demand fall as we move into depression. But demand collapse is going to set up a supply collapse. While it buys you time initially, so that finance is the driver not so much energy supply, because you still have energy supply geared to a previous higher level of demand, so that really will drastically undercut price support. However moving forward, low prices are likely to mean no investment, no exploration, no drilling, no maintenance, and all of these things are going to set up a supply collapse a few years down the line.
So what financial crisis does, while it buys you time initially, it aggravates the situation with peak oil in the longer term. And by longer term I mean maybe only five years, I'm not talking a long way out here. But already we're seeing people cutting back on drilling, I think for instance natural gas [?] in Canada, people are cutting back on drilling because the prices are not high enough. And I think we're going to see a lot of that kind of dynamic.
So we're going to have, this is going to be remembered, I think, as a time of financial crisis for the next few years, but beyond that, I think the energy crisis is really going to bite. And if we get to a point where the economy is trying to recover again, it is going to hit a hard energy ceiling at a very much lower level than was previously available. And at that point, the limits are hard.
10:15
JP: Yeah, you have on you site, uh, this is going back to something you wrote back in June of 2009, Forty Ways to Lose Your Future, and you're laying out some forecasts, number one is deflation, I take an opposing view from that. You're very much in tune with Bob Prechter on that [SL: very much so], cash will be king, and then also something that I find interesting, in the future the consequences of unpayable debt could include indentured servitude, debtor's prison, or being dumped into the military, explain that one.
SL: Well essentially, if you can't pay a debt, then if you can't pay in money they may take your freedom instead. All of those things have been very common responses to being in debt in the past. They don't exist at the moment, with the exception of being drummed into the military. There are a lot of people who are being encouraged, shall we say, to join the military at the moment. I think the connection with debt will be much more overt in the future, i.e. we will forgive some of your debt if you go fight our resource wars, but the other things, the indentured servitude and the debtor's prisons do not currently exist. They have existed, a lot of things have existed in the past that do not exist currently, but I think it's a mistake to assume you can never have these things come back again. When you have an enormous amount of indebtedness, the civilized methods for getting out from under debt are likely to disappear.
Essentially it's like a bank run, or like early withdrawals from pension funds, or like getting out of the stock market at a top. The first few people who do it get through that door under the old rules, or the old circumstances, beyond that there simply aren't the resources there say for say a bank experiencing too many withdrawals to keep its doors open or a pension fund that's chronically underfunded to allow for early withdrawals, or a bankruptcy system to allow a trickle to become a flood where the creditors would lose out massively because debtors are allowed to walk away scott free.
All of these systems have an underlying connection in that what works when only a few are doing it, does not work when a trickle becomes a flood. And I think at that point, you're very likely to see things revived that have not been seen for a long time. Already, um, if you are not paying your credit card and you have a court judgement against you, you can be held for contempt of court and jailed, effectively for not paying your credit card debt, in places like Minnesota. This is not um, an example of the rule of law, this is as far as I'm concerned patently illegal and an abuse of state power but nevertheless, we're starting to see the beginnings of the consequences to indebtedness.
Other consequences could be, for instance, as debt is sold down the line, and say a bank feels that it isn't going to be able to recover this debt, sells it for 50 cents on the dollar to someone who thinks that they are more capable of recovering that money from people, then as that debt is sold down the line, it becomes less and less likely to be repaid and is sold for less and less money, eventually it just might end up in the hands of Vinny the Kneecapper, who is fairly confident that he can extract any money out of you that you might actually have. So there are all manner of risks that can occur when people are in debt and cannot afford to pay with money. And there will be people who are trying to reclaim debt who are prepared to put unconscionable pressure on debtors.
That will be at a private level, but at a state level, if bankruptcy is made harder and harder (as is already the case by the way -- we're already seeing it more difficult to access bankruptcy) I think if that becomes more the case, then we could be looking at other consequences like debtor's prisons, like indentured servitude. After all, I mean indentured servitude ties in with peak oil as well, to get back to that, that right now we all have between 50 and 100 energy slaves each, just in our ordinary middle class lives in North America. We flick switches and things happen, we turn keys and things happen.
When you do not have energy slaves any longer, well the traditional recipe for the elite has been slavery of one kind or another, if it isn't energy it may well be human. So this ties in with the idea that we could be going back to older forms of social structures that we are really not going to like very much at all. And I'm not proposing that this happens tomorrow, but I'm a big picture person, I take the long term view and I think that is one of the directions that we could certainly be going in the future.
14:57
JP:Some of your other predictions here, and let's talk about these and sort of group them. Suburbia is a trap due to dependence on these services and cheap energy, which we've just been talking about; modern healthcare will be largely unavailable; universities will go out of business; and a sense of common humanity will be lost as foreigners and those who are different are demonized. And then of course, related to energy and the scarcity of materials, resource wars. We're already seeing that in much of the third world.
SL: Yes and I believe we are going to see a great deal more of it. And that ties in with governments being aware of peak oil. I think we are very likely to be seeing resource grabs in the future. There are different ways you can do that -- you can send in the tanks, or you can tie up production in bilateral contracts, which is what China does, for instance in Africa. Either way you take oil off the market. And down the line I think when there's a perception of scarcity (which there won't be for a while, because if demand falls and production is still at the same level then there could actually be the perception of glut -- for a while, for a few short years) but beyond that when you see a supply collapse and you have this tremendous perception of scarcity, then I think we are going to see resource wars and whether it's by sending the tanks in or by tying up production in bilateral contracts, we are going to be seeing oil taken off the market. And essentially that is going to mean that oil is very likely to be priced out of the purchasing power of ordinary people.
So it'll end up being much more something that the military has more control over. Under the military or elites in one way or another. Because oil is essentially liquid hegemonic power. And right now a lot of people are able to use, to access supplies of oil at what are really very cheap prices in real terms. I don't think that will continue when you move into a sense of this real perception of scarcity. We may be five years from that point, we may be slightly longer, it's very hard to say. But I think that is the direction we're going.
If you want to talk about some of those other points, suburbia I think is a trap, because it has all of the dependencies and none of the ability to do anything about them. So, I mean you can be urban or you can be rural. If you're urban you'll have dependence, I mean there's not much you can do about it but you're living in an area where if any centralized services are going to survive it'll probably be there. If you're in a rural area, you'll pretty much have to look after yourself. So you have the ability to do something about self sufficiency, even although you're not going to be able to rely on centralized services. Suburbia has the worst of both worlds which is why I call it a trap. There really is almost nothing you can do to become self sufficient, but you're extremely dependent on distantly provided centralized services. So I think suburbia has the middle ground that really doesn't [?] in any way.
17:47
JP: [?] the unavailability of healthcare -- because we've just passed this massive healthcare reform bill, so everybody thinks we are going to have universal healthcare here. You're talking about modern healthcare will be largely unavailable.
SL:Well I think that healthcare bill is, if anything it's a tax grab as much as anything else, and a sop for the insurance companies. I don't see that providing universal healthcarre at all. I think a lot of people are going to pay the fines. The reason they don't have healthcare is they can't afford it, and if they're being told "OK, you must sign up for this or pay a fine" but the fine is cheaper. For a lot of people, they're going to pay the fine, so they'll be poorer and they'll still have no healthcare. The American healthcare system as far as I'm concerned, I must say, is an abomination. It is just about the most expensive way of depriving ordinary people of healthcare on the face of the earth. Which is not to say that I think our system is going to survive either. I mean, we have socialized healthcare, so does a lot of Europe, but it's terribly expensive, it's not very efficient.
And I don't think either system is going to survive when there's a dramatic collapse in the money supply, which is deflation. Which is very much what I'm predicting. I don't think it really matters that much whether one has a private system or a public system. Because both are extremely expensive and if government revenues are going to be falling or insurance companies' revenues are going to be falling as people simply have no purchasing power, I don't see either system being able to be maintained. That's not to say they collapse overnight and just disappear, but I think they will be, in America, increasingly expensive to the point where it prices almost everyone out of the market and the copays go up to the point where people reckon they're better off without insurance.
And a lot of them are already, they just don't realize it. Or in Canada where the government tax revenues are simply not going to be sufficient to maintain the level of public service that people are used to. And I think that system is going to become even more sclerotic and dysfunctional than it already is. I mean it's not that bad at the moment but the waiting times are increasing and it's getting less responsive to what people really need. And I think when there's drastically less money to fund it, then I don't see that being able to deliver a great deal.
So really I see the top down systems, the very top heavy top down systems, whether public or private, I can see them failing. And something much nimbler, and more responsive, emerging from the bottom up. But that's very likely to be pay as you go because systems like that will not have any kind of top down funding. So they'll be more able to deliver what people really need, especially at a basic healthcare level, but I think there will be an element of having to pay out of pocket to accesss these services. Now, a lot of people in the States would actually today be better off with that kind of system, because the amount of money they're having to pay is absolutely staggering. The figure I remember seeing quoted was something like twenty two thousand dollars a year as a premium. Just for a healthcare premium for a family of four. So someone has to go out and have a job, only to fund healthcare premiums. That's completely unsustainable. There is no way that system is going to survive, people will absolutely not be able to afford it. In a depression unemployment goes through the roof, people are going to be lucky to have one job, let alone two. And just the ability to afford that kind of system will disappear almost entirely.
And with it goes the business case of the insurance companies. So I really do not see that healthcare debate that you just had, actually having any real substance at all. I think if anything it'll make healthcare less accessible to ordinary people than it has been in the past. Now already you're seeing, I believe it's the number one cause of bankruptcy in the States, is illness. And there is no way that people can continue in that kind of system when the copays constantly go up, and the costs constantly rise. When people are all of a sudden going to have the rug pulled out from under their feet and they're going to have next to no money, in comparison to what they have now, almost no access to credit, their earning power severely threatened if not disappearing as well, there is no way that healthcare system is going to survive under those circumstances in its present form.
22:13
JP: You know one of your other predictions which is dear to me right now, is the collapse of the complexity of our society and I spent about fifty minutes this week interviewing Professor Joseph Tainter [SL: ahh!] on The Collapse of Complex Societies, which he's coming out with a new version and an update on it. Let's talk about that, because this modern world that we live in right now and which has been built with debt, credit, money printing. People think of how technologically advanced, we have our smart phones, we have our laptops, our computers, we have cable, satellite, uh, jet travel, all our modern electronic devices and conveniences we have, requires a lot of specialization, very complex. Go back to this healthcare bill, there's a hundred and fifty nine government agencies that are going to be created to administer that. That's complexity!
SL: It's insanely complex! All of these systems have been driven up by, well, energy subsidies, for one thing, we've had the largest energy subsidy in the history of the world, with fossil fuels, over decades and decades. Plus we've had this constant pressure to increase the money supply. So money has got further and further removed from any kind of underlying real wealth, there's this creation of excess claims to underlying real wealth, which is what I would argue is the setup for deflation as those claims are actually extinguished. But, it's a combination of energy and credit that have driven the situation on the way up and absolutely we have an unbelievable, unprecedented level of socioeconomic complexity.
And if you look at Tainter's book, the last chapter of Tainter's book, the key aspect is really peer polities, and that when you have a set of peer polities so peer groups, countries that are all locked into the same phase of expansion together, essentially nobody can collapse without simply being subsumed into another peer polity that is at the same sort of stage. What happens when you have these peer polities expanding together is they actually go a lot further together than they would separately, in other words they go considerably further down the path of declining marginal returns to complexity. And we are well into, that the more complex we make a system, the less effectively it works, by a considerable margin. And that already applies with healtcare and education and all manner of other aspects.
We would not have continued that far along this path, had we not been involved in this globalized network of peer polities. But when you have this kind of globalized network and the expansion phase goes on far longer than you would conventionally expect, the price you pay for that is collapse altogether. One entity can't collapse on its own, but they can all collapse together. And I think that is what we are looking at, globalization going sharply into reverse, a tremendous simplificaton of society. So a lot of this complexity I think is simply going to disappear.
And really, a lot of this complexity is something that only the wealthy (and I include the American or North American middle class and European middle class in the definition of wealthy when you compare it to such an enormous percentage of the rest of the population of the world -- you know, we are living better than the kings of old, even if we're only middle-middle class) so the wealthy have benefitted from all this complexity. The poor have not at all, it really has not touched them except maybe negatively in terms of conflict over the resources that they happen to be sitting on and them being driven off their land so the wealthy can exploit those resources.
Essentially, the means of becoming wealthy is to be able to cream off surpluses from the umpteen layers beneath you. And we are sitting at the center of the center. We have been the beneficiaries of all that accumulation of resources, including energy, enormously so, we've been able to bring in energy resources from such an enormous amount of the rest of the world, and we have benefitted from that in terms of the complexity of the center of which we are a part. The rest of the world is actively de-developed, if you like, as the results of entropy are being felt in the third world where they are experiencing all the environmental externalities and very little of the benefit whatsoever because the resources are ending up here fueling our socioeconomic complexity.
26:57
JP: Nicole, a final question if I may, one thing that you talk about and we're seeing it here, political structures will concentrate at the center, taxation will rise substantially on the domestic population as they are squeezed to support the elite, and the rule of law will be replaced by politics of personal and an economy of favors. Here in California, if you work for the state for example, you can retire at age 55 with the equivalent of a million dollar pension. It's one reason the state's going broke. We had a city here in California where the mayor was pulling down a salary of eight hundred thousand, the head of the police department was pulling down a half a million, the part time city council were pulling down salaries of a hundred thousand and this was in a town, small town by the way, [SL: mmhmm] where the median income was about twenty nine thousand.
SL: Well all the systems that [?] the elites that benefit from being at the center, they are interested in their own survival. They are not particularly interested in the periphery that they feed off of. So, yes they have been accumulating the benefits of being at the center for a long period of time. This is one reason you don't see reform of these structures, because the people that would have to institute reform are the very people that benefit from the most from the status quo. They are not going to change this. Any human system eventually becomes sclerotic and rigid and hostage to vested interests and that's absolutely what we're seeing with our political structures today.
What ends up happening is they become unreformable and they have to collapse and something else will grow from the bottom up to replace them. But in the meantime they are going to do whatever they possibly can to maintain their own position and their own privilege, and their way of doing that primarily as tax revenues fall will be to, overall tax revenues fall, will be to squeeze anyone left who still has any means to pay whatsoever. So I'm afraid, I think property taxes will go up. Whether or not anyone actually has the income to support that, they may have a property but that doesn't mean they have any income to pay taxes with.
And the same thing happened in the Roman Empire -- when they were experiencing the beginnings of their collapse, they squeezed people until the peasants abandoned their land because they reckoned they were better off with the barbarians, and on the whole they were, because the tax demands of the empire were so great. And I think we're very much going to see the same kind of thing again, where the centralized structures, whether it's a center at a municipal level, at a state level, or ultimately on a national level, I think all of the centers will be doing their best to compensate for falling overall revenues by increasing the pressure, turning the thumbscrews if you like, on ordinary people. It's the flipside of bailouts never being for the little guy.
Bailouts are always for the insiders, whether they appear to be for the little guy or not. How about $8,000 for a downpayment on your mortgage which is nothing more than an inducement to get two or three hundred thousand dollars in more debt? How's $4,000 to put in your cash-for-clunkers scheme so you can have a new car? It's "Here, have $4,000 so you can get $20,000 in debt." All of these systems are traps for the ordinary people. All of them are bailouts, whether in disguise or not, for the elites. So the center is constantly sucking wealth towards itself in order to sustain itself. Because as far as the center is concerned, that is the important thing. So the people who are in the periphery, I think are going to find that life gets very very much more difficult very quickly. And uh, credit access will be gone as credit markets tighten. Their jobs will quite likely disappear or at least a lot of them will. We're going to be moving into a depression when you just do not have enough money to keep your systems going.
We depend on an enormous money supply which is the supply of money-and-credit, because money and credit are equivalent during the expansion phase. But credit disappears during the contraction, that's the first thing to go, and credit is more than 95% of the money supply. When you try to run an economy without sufficient money, then that's like trying to run your car with the oil light on, your engine is goint to seize up if you do that, and that's exactly what's going to happen to our economy.
People say "Oh, well they'll simply print." If you try and print your way out of deflation, what will happen is the bond market, which is in control of interest rates, will jack those interest rates up to the point where debt-junky governments will not be able to pay their debts at all. This will precipitate a wave of debt default, which is deflation by definition. So if you try and print your way out of deflation, you just get there even faster. There really is no way out, once you've had the creation of excess claims to underlying real wealth. And that's all that credit is. It's quite different from a currency inflation where you actually have enormous amounts of physical currency created. This is not extra currency, it's not taking the underlying real wealth pie and dividing it into smaller pieces like a currency hyperinflation. This is the creation of credit, which is the creation of multiple and mutually exclusive claims to the same pieces of underlying real wealth pie. And when people realize that they've, these excess claims exist, there will be an almighty resource grab, underlying real wealth grab, and that is deflation. So that is vey much what we are looking at.
And I think that is just going to define, probably the next five years. Beyond that, we're going to see energy and climate and the consequences of pollution and the collapse of water supply and all manner of other things. But for the time being, I think deflation is going to be the defining concept of our time, over at least the next five years.
And that's why we focus on finance so much at The Automatic Earth at the moment. We've spent a lot of time writing about peak oil, but the time scale for finance is faster. If people don't successfully negotiate the short term, they don't have a long term to worry about. We are trying to get them to take it one step at a time, to negotiate the short term, deal with finance, and still manage to retain a certain amount of purchasing power, in order to be able to address the energy crisis that comes next. If people don't do that, they're going to lose their purchasing power, and then they'll be completely at the mercy of, of whatever states have to throw at them. Because if you have no money, you have no choices. And I want to be able to keep people invested with as many choices as possible, that means being liquid at a top and moving to being fully invested at a bottom but we are years away from a bottom.
Right now people need to be liquid, in order to be able to take advantage of the oportunities that are coming up as consumer prices and asset prices fall off a cliff. The purchasing power of liquidity will go up enormously under those circumstances exactly the way it did in the depression. Not many people will have any, but those that do will find that the world is their oyster. But only the first few people to cash out will be able to do so. That's the way ponzi schemes work -- unfortunately, the vast majority of people are going to lose their liquidity altogether.
34:05
JP:You know, Nicole, when I was talking to Professor Tainter this week, he drew a, and I think in his update to The Collapse of Complex Societies, he draws even further parallels between the US today and the fall of the Roman Empire. He talks about unfunded Social Security, Medicare liabilities, infrastructure problems, maintaining the military, and then he goes on about oppressive taxation, many of the things that you're forecasting here. I really think, Nicole, people have no idea, this almost reminds me of how bleak things were during the Dark Ages, but I think the average person on the street has no idea what's coming in the next five years. And of course, you know the media fills them with bread and circuses, so...
Well listen, as we close, if our listeners would like to follow your work, your blog, why don't you give out your website, The Automatic Earth?
SL: Yes, theautomaticearth.blogspot.com. We're hoping to move away from blogspot to a dot-com address, but we haven't uh arranged that yet, so for the time being that is the address to follow. And what we do, is, we provide the big picture to the best of our ability. And we do integrate other factors as well but we focus on finance because the time frame is shortest. Not because it's, it's the only thing that's important by any stretch of imagination. But we want people to be able to take it one step at a time and that means addressing finance at the moment.
So it's, I run it with my, my partner and I run this together, we are Ilargi and Stoneleigh, I am Stoneleigh. And what we're trying to do is provide the biggest big picture we possibly can. to help people negotiate the serious challenges that are lying ahead.
35:42
JP: All right, well Nicole Foss has been my guest, uh, you can follow her work once again, at The Automatic Earth dot blogspot dot com. Nicole, thanks so much for joining us on the program!
SL: Thank you very much for having me!
95 comments:
Nice!! :D
I love a good reality smackdown.
Thanks - outstanding as always - I wouldn't have thought it possible, but a summer of worldwide presentations has sharpened Stoneleigh's delivery even more!
Puplava also mentions an interview with Tainter, which I found here: Tainter, but I can't access the audio. Anyone else able to do so?
Thanks Woody :)
I haven't forgotten your request about reviewing those Gonzalo Lira pieces. Unfortunately I just haven't had time recently, as I'm planning another trip south starting soon and have had tons of organizing to do. If I get anywhere near your neck of the woods, I'll look you up :)
I want to hear the Tainter interview as well. Apparently he's been producing new work, including a review of the BP oil spill. I want very much to get hold of this.
Someone at Financialsense needs to get a calendar. If you change the 0908 in the URL to 0904 you can get the audio.
According to the FSN calendar, the Tainter piece is scheduled for publication next Wednesday.
Today's news in Britain, on the radio all day, is that the Inland Revenue's new computer system has been "mis-calculating" taxes for the last two years, and 1.5 million of the lowest paid are going to be chased for extra back taxes they're not expecting, averaging £1,500 each.
http://www.bbc.co.uk/news/uk-11186397
They're sending out the first 15,000 letters this week, apparently to gauge response; there's no hint of how long you have to wait to find out if you're affected, but it sounds like months. They're going to reclaim the money in future tax payments; there's no mention of what happens if you no longer have an income.
The BBC hasn't mentioned, all day, who wrote this mis-functioning software and why they're not being sued for the loss instead.
Nicole suggests the reason for the lack of information about the market risks ahead is to keep the public uninformed. I think that's likely part of the reason, but the distinct absence of discussion of the systemic problems facing us, throughout the intellectual community, is much broader.
I think the main reason for the relative silence and ignorance of the dilemma is that our professional education system did not give people the language for discussing erupting whole system changes like we're presently experiencing. So, not having the language for it, I think, is causing people to reacting to the perception of threat by clinging more vigorously to old formulaic thinking. So, our culture is just happier to be ignorant, and shows no curiosity about our changing world or making any effort to understand what is happening, sadly.
fyi - http://www.synapse9.com/SustIsh1.htm
I think what Nicole calls "the center" which draws wealth toward itself, would have the decision making capability, and a real option I can define fairly narrowly, to avert the otherwise natural end for this runaway train.
Stoneleigh
Great Interview.
Someone here has been asking you to comment on Gonzalo Lira. I just read his post on ZH
http://www.zerohedge.com/article/guest-post-prosecution’s-case-against-alan-greenspan#comments
where he acted as prosecutor for trying Alan Greenspan for Crimes Against the Economy, and recommending that if convicted, he should be put up against the wall and offered a last cigarette and blindfold. I regard that position as unarguable. What I would like you to comment on is the following:
"This excessive debt level of the U.S. Federal government insures that Treasury bonds will never be repaid in real terms. The market is aware of this situation—the bond market is aware that Treasuries are in a bubble, floating on nothing but air. Therefore, when—not if—the bubble in Treasury bonds finally bursts, there will be a run on comodities, most likely, which will start the hyperinflationary phase of the current Global Depression. From here, the endgame of the U.S. economy. "
He sees the hyperinflationary phase immediately following the so-called "bond market dislocation." You have stated previously that you expect this dislocation to occur in 2011, but you don't see the hyperinflationary phase for at least several years after that. Inquiring minds would like to know your thoughts on the subject.
@Caith And nobody's asked why the government so can easily write off the banksters' "mistakes" and yet are not prepared to write off their own.
Clawing back £1500 over a year is more than £120 a month extra tax. That would bankrupt a lot of people.
Greetings from Romania! I must agree with el gallinazo's comment above - having read Gonzalo Lira's two posts on the hyperinflation scenario - I'm not so sure an artificially induced hyperinflationary episode is unlikely. If the big boys (for whom there is no deflation or decrease in the money supply) decide to go for the commodities, prices will go up at the pump for the little guy. And that might just spark the fear that is needed to kill a currency. There's a maybe there, but it doesn't seem impossible. What do you think?
Another very insightful article -thanks!
I've followed much of TAE's preparation advice over the last little while and find myself in the fortunate position of having no debt and being reasonable well cashed up.
My intention is to purchase a little physical gold for the long haul (and to pass on wealth) but wait for an opportune time.
In the Primers and elsewhere, Stoneleigh says that gold will initially deflate with everything else, but it just keeps on defying gravity!
I neither expect nor want direct financial advise, but is golds' (imminent?) demise still an integral part of the TAE philosophy - or is gold proving the exception as it seems to have done for millenia?
Ooops! My comment was in relation to the previous posting, not the interview....sorry!
Hi, You often say the current Economic system requires growth but would 2% growth say with 2% inflation not result in a fairly steady state for the Economy? The problem being, that if the top dogs take 7 to 30% pay rises each year, the rest are increasingly worse off.
Ian, while I'm firmly in the deflation camp, I hold some PMs for two reasons I can articulate:
1) While some folks claim that gold is an inflation hedge, IMO it's an uncertainty hedge
2) Deflation implies shortage of money. While aknowledging that debts are denominated in dollars, I feel that gold IS money.
Quote of the day!
The USA will "spend more and tax less"
“A USA recovery will mean more jobs ... in China.”
jal
Outstanding interview Stoneleigh. I find it quite nice to be able to put a voice to the printed words I have been reading these few years.
Thanks to you, and Ilargi as well, for all your hard work.
@The Goldbugs
It is regularly alleged here and elsewhere that gold has been real money for at least 6000 years. Is it coincidental that Creationists think that's when the universe popped into existence? Well, never mind about that.
It may be true that it has been money somewhere during that entire period. It is well known that it was not money everywhere. At the centers of Empire, gold is always money. In the hinterlands, most anything might be tendered as money.
I recall reading not long ago that archaeologists had concluded that just a few years after the Romans retreated from Britain that the residents of Londinium abandoned the circulation of Roman coins even though there had been a plentiful supply. They returned to barter. At a low-enough level of commerce, gold is nearly worthless.
Hello All,
I'm looking for a reading list to better understand global trade and prognostications thereof. Specifically the argument between free-trade and protectionism, reserve currency benefits and disadvantages, etc.
If anyone could post a few books they would recommend I would be appreciative.
Thanks,
Jake
Dear Stoneleigh,
I just wanted to say 'thank you' for doing the interview and thanks to Ilargi for posting it today. Hearing you talk through these issues was incredibly helpful. I was able to understand much more by listening to you than I have been able to pick up in the text of a blog.
Thank you very much!
I visit your site often. It is nice to finally hear your voice, Stoneleigh. Thank you for an excellent interview: concise, energetic, and comprehensive. Sounds like you have a handle on the big picture. Nice diction, BTW; I really appreciate your efforts to make it easier to listen to you and your ideas.
Caught the Financial Sense interview. I agree, deflation is the immediate threat. Not a very pretty picture.
The post-fossil fuel reality changes everything. I've only been on that topic for two or three years, but was able to get my small savings out of equities before the crash in ’08.
Since then I've tried to get a sustainability "ark" going in a small, elite resort town. What a disaster! As an outsider (not born here, etc.) I've been pushed aside to have the project taken over by one of the old families. I've been through everything you (Nicole) spoke about, albeit in relatively mild form. But I can see a new feudalism on the horizon, backed by strongarm thuggishness. Very chilling.
Especially when we start to track the trajectory of international resource conflicts and the endless need for fresh meat—kids as soldiers—on the big platform. No wonder our politicians and the corporate media want to keep the population dumbed down.
How do we find or build strong communities of equals? We will need them to survive...
BTW, good special edition of Scientific American this month, The End. Gives a good resource depletion snapshot for the ordinary reader... Cheers, keep up the good work. (Need a good marketing strategist?)
@ The Nobody’s
Though ‘nearly worthless’ is marginally better than ‘totally worthless’ - wouldn’t you agree?
And I suppose those abandoned (presumably gold) gold coins simply evaporated, disappeared, disintegrated like so much dusty old paper, never to be seen again?
It seems to me the present day Creationists are alive & well in Reserve Banks of the world: and that’s no coincidence with our little universe likely to pop out of existence.
Love your handle.
IM Nobody,
Recently, I read the excellent book The Fall of Rome and the End of Civilization. It is a short and to-the-point book.
This book consistently pointed out how the Fall lead to ever-lower standards of living and ever-greater insecurity.
Pottery is the most accurate evidence, according to archaeologists. The quality of all coins (and pottery) deteriorated. Gold and silver coins were constantly devalued by adulteration. However, the fact that the coins contained ever-lower quantities of precious metal would seem to indicate to me that the precious metals themselves retained their real values to some extent. Obviously, you could not any more buy high-quality pottery - which was no longer being manufactured - but that does not mean that you could not buy animals or farmland with it.
Whereas I agree entirely with out kind hosts as to the on-going deflation. I also agree that oil and coal prices will drop. I hold a different view-point (I think) from them regarding gold and silver. The reason for this is that the ETF'ization of Gold and Silver has made the number of claims on the real metal out there vastly exceed its availability. For every tradable ounce of gold, there may be bits of paper representing 60 claims on it and the situation for silver is no better. I expect the GLD and SLV symbols to eventually be worth nothing more than digits on a disk somewhere.
Re.: Our future energy needs.
Maybe the oil drum has discussed this report. If not, then someone can bring it to their attention.
http://www.acceleratorsamerica.org/files/Report.pdf
Accelerators for America’s Future - June 2010
The Department of Energy’s Office of Science has launched an initiative to encourage breakthroughs in accelerator science and their translation into applications for the nation’s health, wealth and security. At an inaugural workshop, experts from across the spectrum of accelerator applications identified opportunities and challenges for particle beams in energy and environment, medicine, industry, national security and discovery science. “Accelerators for America’s Future” captures their perspectives, insights and conclusions, informing a national program to put accelerators to work on the challenges of our time.
@ Ian
Hardly anything is ever completely worthless, but the value of things can fall awfully far. The famous photo of the German woman tossing Marks into a stove demonstrates that even worthless paper still has some use value.
IIRC the conclusion as to what happened to the coins of Londinium, which I believe were mostly copper, was that they were melted down to make things with use value.
Your gold will not evaporate (unless of course nukes fly) but what you can trade it for may vary a lot in future times and places. You can't make much of a knife or mallet out of it and at my house it would probably get you nothing. I'm not saying you shouldn't buy it. Just pointing out it doesn't come with any ironclad guarantees of future value.
With regard to my handle, I'll merely say that I am the epitome of my handle
EU austerity policies risk civil war in Greece, warns top German economist Dr Sinn
Well done at the interview, Stoneleigh!
@Glenjeff from Sept 2nd post comments; You are talking about feelingsa and emotions connected to the parts of the body that correspond to the yogic theory of chakras. I'm thinking of the seven major chakras that are located in the trunk and head.
Google "chakras" and you'll get all kinds of info online. Combine "yoga" and "Chakras" and you'll get more things particular to yoga.
peace,
shamba
I'd like to invite those in the Detroit/Windsor area to join us for Stoneleigh's presentation at Shed 5 of Eastern Market this next Sunday.
http://www.facebook.com/#!/event.php?eid=131613180218207
Steve Keen has an excellent and clear explanation of the role of debt in the US economy over the past few years.
What Bernanke doesn’t understand about deflation
I could not find it on AE
@Nassim
I liked your comments on the deterioration of coinage. Our coins haven't contained either gold or silver for a long time, but they are still being debased:
New steel 5p and 10p coins a 'disaster'
I added a transcript of the interview, provided by longtime reader DIY'er. Mille Grazie!
.
@ DIY'er...thank-you for your generous effort to produce the transcript!
@Stoneleigh - awesome interview! It is appreciated that Ilargi posted a link to it.
@DIY'er - thank you for the transcript!
I have posted a few quote from Accelerators for America’s Future - June 2010 at ...
http://www.physicsforums.com/showthread.php?p=2867712#post2867712
You will need to use it as a reference whenever discussing Our future energy prospects.
This conference took place in 1009, during the worst of the financial crash. They were aware and are concerned for the future.
Their conclusions
Many barriers stand in the way of deploying accelerator technology for the study and development of materials for future fission and fusion applications.
First is the requirement for research and development, as well as demonstration.
Second, limited funding within the domestic Fusion Energy Sciences community has not provided the capital required to build one.
This points to a third barrier, the need for inter- agency, interoffice and even international cooperation.
Finally, such a facility requires particle accelerator technology that is not familiar to either the fission or fusion community.
Stoneleigh,
Great interview! I'm passing it on.
Gracias!
A NATION IN DECLINE by Michael Yates
Part 1: A Passive/Agressive People
Part 2: Signs of Distress
"You will need to use it as a reference whenever discussing Our future energy prospects."
Why? I see nothing that all of a sudden out of the blue makes this field special, other than (self-) promotional considerations, when it comes to energy provision. There's one question here, same as it ever was: what's the EROEI? Far as I know, particle accelerators are prodigious users of energy.
"This conference took place in 1009...."?
Huh?
.
Ilargi said...
what's the EROEI?
A.: As usual ... Spend now ... then figure out ... later ... if you miscalculated.
"This conference took place in 1009...."?
Typo. :-)
October 26, 2009.
See the following if you are interested in the slides or video.
http://www.acceleratorsamerica.org/symposium/agenda.html
jal
jal,
Not to drift too far off-topic, but I have never seen much discussion of how useful energy would be harvested from a fusion project -- yeah I know, MHD, but you have to somehow direct those little rascals toward the MHD collector when they just want to explode and go everywhere, with enough jism to penetrate almost any known material.
Meanwhile it takes prodigious amounts of perfectly regulated, controlled energy merely to keep the coils all powered. And the thing will drink liquid helium like it was cheap beer. Helium, another finite resource probably already past its peak.
It's not that I don't think the research is a great idea, it is. We should have a space program as well, and it's sad to see some of these things go.
Ilargi,
You're welcome. This is my one and probably only attempt at transcribing anything. I had no idea it would take all day to do a 35 minute interview, but this struck me as a historical milestone for TAE.
Though I don't agree with his politics, Jim Puplava tries to interview literally everyone with a well formed opinion about the economy, and he is a gentleman who lets his guests talk and asks reasonable questions, never adopting an adversarial posture.
I have listened to the FSN podcast for about five years now and have a handful of kruggies to prove it. But when the goldbugs' prognostications proved to be of limited utility I went looking for a better explanation of current events, and have found it here and on ZH.
(planning to send most of the bullion back to the dealer next week, it has actually appreciated since 2005, and baby needs a new pair a' shoes .. will probably keep a couple as souvenirs tho')
Stoneleigh is great, with amazing (and rare) clarity of thinking. Her arguments, though, remind me K. Marx's: not consider opposite interests and forces, within the elites and outside. For example, increase taxes in CA can trigger a flood of exodus, and with the current speed of information flow, may eliminate state government entirely within days, destroing it more than a conventional revolution.
Excellent interview. Thanks. Thanks also for the transcript, it makes it really easy to understand.
Once more I understand some additional pieces of this worlwide jigsaw.
I am wondering what can determine the end of the deflation period.
"Sailor man said...
[..] I am wondering what can determine the end of the deflation period."
While I understand why people would pose such a question, I think it's important to note that it's the wrong question to ask for most. It presupposes a -more or less comfortable-"spectator" role for the subject.
Since this deflation will utterly cripple society, the right question in the context for a vast majority is far closer to "where on earth am I going to find food, water and shelter for my family and myself, and how can I protect all of these"?
.
I agree my question was a "spectator role" kind of question.
I only need to protect my hard earned cash from wife and children.
Two special thanks - first for the transcript and second for the John Vichon photograph. The looks on the children's faces of 9/2 made me laugh and this one is downright adorable. I know, I know, small things but they bring me great pleasure.
King of the Road said...
The claim is that the credit situation currently is that there is a huge excess of claims to underlying real wealth, or so I believe.
I don't discount that this is true, but in order for me to even understand the claim, please provide a definition of and quantitative analysis of "underlying real wealth."
This concept is a mystery to me. If I've recorded a movie on my DVR, have I increased my real wealth?
If I have the athlete's foot from which I'm currently suffering treated at the doctor, have I increased my real wealth?
If I'm able to work 8 hours per day in lieu of 10 previously and use two hours to (make love to my wife, surf the web, study quantum electrodynamics) have I increased my real wealth?
These are just for me. What about for a neighborhood? A city? A state? A nation? The world?
These things must be defined for the statement, which is at the very kernel of your argument, to be subject to being falsified or supported by objective evidence.
I've always wondered how the clueless and people in denial are going know that deflation has begun for them. Unless there is a major significant worldwide event, such as all the banks worldwide become frozen and government handouts suddenly stop, these people are not going to wake up.
"cmusat said...
Greetings from Romania! I must agree with el gallinazo's comment above - having read Gonzalo Lira's two posts on the hyperinflation scenario - I'm not so sure an artificially induced hyperinflationary episode is unlikely."
Just for the record, I still adhere to Stoneleigh's scenario of grueling deflation over the next 5 odd years as the world deleverages. . I would just like to see her analysis and counter to Lira's ideas. I like Lira a lot and think he is a very smart dude. He sees hyperinflation as a major probability much earlier downstream than Stoneleigh does, i.e. immediately after the sovereign bond dislocation.
Many, many thanks to DIYer for the transcript!!
peace to all,
shamba
el gallinazo said...
Stoneleigh's scenario of grueling deflation over the next 5 odd years as the world deleverages.
He, (Lira), sees hyperinflation as a major probability much earlier downstream... immediately after the sovereign bond dislocation.
We are already doing the deflation. Sovereign bond dislocation is being put off everyday by the bankers.
Some countries will fall first and eventually bring down another, then another, etc.
This will not happen at the speed of video games.
I think that 5 years is a good time frame for hyperinflation.
jal
(It sounds like Stoneleigh has mastered the Mic)
Blogger WgS said...
Two special thanks - first for the transcript and second for the John Vichon photograph. The looks on the children's faces of 9/2 made me laugh and this one is downright adorable. I know, I know, small things but they bring me great pleasure.
It's nice to have you back and posting again.
Excellent video interview of Chris Hedges:
COLLAPSE OF AMERICAN LIBERALISM
Chris Hedges: "When you have bankrupt liberalism you descend into moral nihilism"
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=5441&updaterx=2010-09-05+01%3A51%3A56
Excellent piece, this guy's a polyana and needs some repeated trauma to bring him into line with reality.
I'd REALLY like to know what you think of Bruce Endberg and his blog prairie2.com. He's started the canned-goods school of economics.
Seems like we're at a transition point here:
Certain people calling Ms. Foss "Stoneleigh:
And certain people calling Ms. Foss "Nicole"
. . . So, what's it to be?
Or, is either/both acceptable?
Just asking.
.
Ventriloqust,
Probably the easiest thing is to call me Stoneleigh here on the site, as then everyone will know who is being addressed. After all, people have been calling me that online for 5 years now. When I meet people in person I obviously use my real name, and any emails addressed to me can use either name.
@ Ventriloquist
I think for the sake of consistency and because the blog is searchable that it would be better if everyone stuck to Stoneleigh. I call her Nicole in private, but it will continue to be Stoneleigh in this public space.
Does that help answer you question?
Well Stoneleigh, not to hop on the bandwagon, but I have been reading this site regularly for about 3 years for the insightful posts (and especially because of your great track record, I really didn't believe the bailouts would happen/be happening to the degree they have, but man was I wrong) You and Ilargi have written many great pieces, but this is the first time I've commented because Wow!, was that a great interview and summary. Well done
Jeff
It's great to listen to Stoneleigh talking to Jim Puplava - outstanding common sense, intelligence etc.
But even more, I'd love to listen to a head to head with an avowed inflationist like By Nadeem Walayat of Market Oracle.
http://www.marketoracle.co.uk
Lots of intelligence & insights there too.
I've placed my bets (literally) with the deflationist camp but I must admit I get little quivers of apprehension when I read Walayat.
Not stirring here: but only a fool, closes his/her mind, especailly when so much is at stake.
A quote from Market Oracle:
The bears that predominantly follow a non existant deflationary scenario, consistently and persistently fail to comprehend what drives the worlds economies and stock markets which is the inflation mega-trend. Governments and their respective central banks are engaged in a perpetual cycle of inflationary money printing policies with the sole aim of concentrating power and wealth into their own hands by stealing the wealth of savers and purchasing power of workers.
Stoneleigh. In the comments section of the August 18, 2010 post you said the following:
"There is a fundamental shift in collective psychology that leads to fighting over a shrinking wealth pie. This dynamic appears to be characteristic of humanity. To make matters, much of the shrinking wealth pie can be destroyed in the process of fighting over it, which only strengthens the propensity toward conflict."
I guess you were talking about stories like the following one:
London’s 3.5 million Tube travelers face disruption today with as many as 10,000 of the subway’s drivers, station staff and engineers staging the first of a series of 24-hour strikes over employment cuts.
The walkout over 800 jobs and restricted hours for ticket offices will start today after talks broke down last week. London Mayor Boris Johnson has called in 100 extra buses and a 500-berth boat that will carry 10,000 people on the River Thames to help commuters.
The stoppage, the fourth to shut down the London Underground since 2002, may cost the economy 48 million pounds ($74 million), according to estimates by the London Chamber of Commerce and Industry. Picket lines will be manned across all main stations and depots and the action will cause “wholesale disruption to services across the entire Tube network,” RMT spokesman Geoff Martin said in an e-mailed statement.
Maintenance and engineering workers will walk out from 5 p.m., followed four hours later by drivers, signalers and station workers. More stoppages are scheduled for the same times on Oct. 3 and on Nov. 2 and Nov. 28.
“London can ill afford disruption to its transport network at the best of times, but with economic conditions as tough as they are, this will put further strain on businesses when they need it least,” said Helen Hill, director of policy at the London Chamber of Commerce and Industry. There will still be “huge disruption” even with Transport for London’s plans for extra services, she said.
London Subway Worker Strike to Disrupt 3.5 Million Tube Travelers in City
Silver and gold.
I am inclined to think that, as the crash commences, there will be an initial spike in PMs(metals) as a panic reaction.
Thereafter, I expect the general deflationary trend as espoused by TAE.
My opinion, worth what you paid for it.
Embedded within every deflationary scare tactic, is the inherent respect for fiat. I have none. The pictures accompanying this blog, many peeled from Shorpy's, depict an era when paper money was fully convertible into real money, hence existed the very real possibility of deflation. No such possibility exists today. The only people craving federal reserve notes, are those mired in debt. It's an illusion. United States bonds are no more valuable than Greek bonds. Both are worth zero. Both nations' debt will never, ever be repaid. It's a mathematical impossibility, especially heading into the peak oil era.
The wealthy elite are fully cognizant of the dynamics in play. They own the ratings agencies. They own the media. They own the investment banks as well as a Congress and President responsible for the repeal of Glass-Steagal. This was the last hurrah before the onset of a permanent era of decreasing credit availability. Watch contrived austerity movements like the tea baggers try and convince Americans to vote against their best interests, which they will. You can be certain another false flag "event" is around the corner, complete with a fox news terror traffic light, in order to herd public sentiment towards punishing the "evil doers". Don't fall for it.
Stoneleigh, when I heard you talking at the start of the interview about the suppression of info on how dire the situation is, it put me in mind of how Dmitry Orlov opened his latest "opus of hopeless". (The full thinkpiece isn't at his regular blog, just teased there.) It's Orlov's premise that the Owner Class is finally letting the idea of peak oil get out there widely. I wonder what that means in terms of the herding behaviour desired by the shepherds (who are steering us to the abbatoir).
Another thing that interests me is seeing the convergence of opinion leaders such as yourselves. I'm noticing more overlap of viewpoints with y'all, Kunstler, Orlov, elements of ZeroHedge, left-wing radio talk show hosts that I listen to (including the one who reads the missives from "Prairie2" cited above) and others. I'm also seeing the Doomer view more in mainstream media such as MSNBC and the New York Times. The MSM people who pick up on blog-talk are six months behind the curve of what's being broached on blogs, but they used to NEVER air those ideas.
Myybe it's "confirmation bias" on my part (seeing others saying what I think, and ignoring that there are still so many spinning happy-chatter.) But I'd like to believe that more people are coming together on the same page. And it's a gloomy story...
@ Those brooding in the inflation camp,
Pray tell, why would the FED and US Government undercut the dollar with money printing?
The US currently imports 75pc of it's liquid fuels needs. It also imports a staggeringly large amount of goods from abroad.
If there was hyperinflation or the mere threat of it. The dollar would collapse over night and all payment of imports would have to be done by gold. There would be huge capital flight away from the US to a more stable country and all private lending would cease in the economy.
It's a situation that is unfavourable to the elites. Because their power is retained by debt control. Hyperinflation = loss of power. Deflation allows them to retain control and the FED to last longer as the value of the thing it produces, the dollar, rises!
So in both a deflationary and hyperinflationary scenario the vast majority of people lose their purchasing power rapidly but in a deflation the elites retain possession of their power as well as their ability to import which would be lost in a hyperinflation.
This is my line of reasoning, that deflation is very corrosive to the general population, more so than deflation but for the elites it is a concentration of their powers as what they control goes up in value tremendously and there is no need for large reserves of Gold to import/ export.
If the US elite can isolate themselves and find no need for any form of international dependence, than fine, they'll hyperinflate to the moon Alice!
A question for the board that was posted just now at the comment section of the Nov 30 2008 post, How To Build a Lifeboat:
"I realize I am a little late coming to this discussion and maybe the author is no longer responding to questions, but it is unclear what one is to do if one's debt is simply too high to get out of in the short term. I, like many students, have tens of thousands of dollars of school debt that cannot be done away with anytime soon. Thoughts?
By Elizabeth on Debt Rattle, November 30 2008: How to Build a Life... at 9:42 AM"
Please take a look at the work of Dr Michael Hudson on the relation between America's status as the printer of an international reserve currency and the funding of war.
Short Video: http://www.youtube.com/watch?v=S4T4kJ2KNzk&feature=player_embedded
I am primarily an anti-war person, so I look forward to a collapse of the dollar. This could happen really soon if the wealthy industrialists in Greece can pull off a coup against the Bilderberger
Papandreou and the bankers. If that much rumored coup does happen and debts are canceled, the dollar and all currencies will collapse.
The expulsion of 3 billion people from their livelihoods was planned by the NWO according to Sir James Goldsmith and to Catherine Austin Fitts.
http://www.youtube.com/watch?v=DdLbr5v5QYU&feature=player_embedded
My opinion is that the NWO elite is planning for genocide.
My new video blog is here:
http://vidrebel.wordpress.com/
King of the Road poses one hell of a question, doesn’t he?
He asked, “... please provide a definition of and quantitative analysis of "underlying real wealth."
Seems fair. What, indeed, is “underlying real wealth?”
(reminds me of little kids asking things like,“How high is up, Daddy?” Or, “Where does time come from?” Or, “Is it better to be rich or poor?”)
While both terms in the phrase ‘real wealth’ are tricky, the key word is not wealth. It is the word real.
Although wealth means maddeningly different things to different people at different times and under different circumstances, it ultimately pins down as anything reasonably considered as valuable to self or others.
Nevertheless, we should remain mindful that not only is one man’s trash another man’s treasure, it also depends upon how needful he is at the moment, and just how much trash we’re talking.
‘Real’, on the other hand, is so much simpler. It’s so firm and tangible. Or so it seems. Ultimately there is only one kind of real, isn’t there?
Doesn’t ‘real’ mean actual, legitimate and fact based, rather than abstract, deceitful or wholly delusional. Well, yes it does.
Too bad that all of those perceptions get processed inside of our noggins. A few laps around a human central nervous system is usually enough to turn anything inside out.
Yet still we try.
So, here’s my shot at answering King of the Road’s puzzler: “... please provide a definition of and quantitative analysis of "underlying real wealth."
Ice cream is real, and tremendously valuable, and thereby makes a damned fine example of real wealth.
Tends to melt, though, and is hard to store, which is why we invented money.
With money, work performed for cash in the winter can buy ice cream in the summer, and life at 10 cents per scoop is both simple and good.
Unless bankers and investors get involved.
They play with (and upon) baser instincts like greed, fear and sloth, which seem to exist in far greater abundance than either ice cream or dimes.
The ice cream maker’s dime, deposited with a banker to draw interest, can be lent (to be repaid later, with even more interest) to accomplish the miracle of eating the ice cream, and having it, too.
There are now THREE claims (the ice cream maker, the banker, and the borrower with a dime in his pocket) on ONE underlying unit of real wealth: the scoop of ice cream.
[side note: we won’t even get started on the living hell which ensues if the banker SELLS the loan or the local bookie takes bets on whether or not it will be repaid]
Let’s just stick with the original three claimants. All three will argue with great eloquence and flawless abstract logical reasoning (maybe even fight to the death) over the legitimacy of their respective claims...
... but one scoop is one scoop, and there you have it ... or don’t have it, as the case might be.
I, like many students, have tens of thousands of dollars of school debt that cannot be done away with anytime soon. Thoughts?
Pay the minimum you can get away with (if you are truly unable to do more) and wait for The Collapse. Then, it's Jubilee, baybee! When it all falls apart, nobody will be chasing you to pay back your student loans because we'll all be digging through the smouldering ashes of the looted grocery stores hoping to find some edible food in cans that wasn't melted by the heat.
But seriously, there are beaucoup blogs out there that discuss student indebtedness. Check out this one and others on its blogroll to get some ideas.
The oil drum has Stoneleigh listed as a speaker at the
ASPO-USA's 6th Annual Peak Oil Conference
October 7 -9, 2010 Capitol Hill Hyatt, Washington DC.
Any comments???
jal
VK writes: "Pray tell, why would the FED and US Government undercut the dollar with money printing?"
Some of expect a truly massive increase in the federal deficit no matter who is in power. Even assuming no new programs, there will be: 1. Major declines in tax revenue (lower profits, fewer jobs...)because of the poor economy. 2. The housing/banking bailout losses will be realized (FHA, Fannie May, Freddie May...) and will be huge. 3. The explosion in health care costs (not only Medicare/Medicaid, VA but also the new health program). 4. Baby boomer retirement. 5. Increases in safety net outlays (food stamps, unemployment insurance...) because of the poor economy.
If the Republicans come in there will be massive tax cuts for the rich as well as major increases in defense spending. Middle class entitlements will be preserved. Cuts in the safety net will be smaller than these other effects--so will result in a higher deficit than even the Democrats--as Reagan did.
So the Federal government will be selling huge amounts of debt. I expect this debt to be bought by the FED--thus the money printing. Otherwise the interest on the debt would skyrocket.
Then the hyperinflation?
Alternative analysis, anyone?
Real wealth = energy and emergy.
On August 21st of this year, we passed into ecological overshoot. We are using more resources now than the earth can replenish in one year. We are depleting the water tables faster and faster, the soil degrades faster, the biosphere gets increasingly polluted etc.
Our financial system is a derivative of the real world and with us having reached and breached ecological limits we must now crash back down to reality.
It's called overshoot and collapse.
pasttense said...
"So the Federal government will be selling huge amounts of debt. I expect this debt to be bought by the FED--thus the money printing. Otherwise the interest on the debt would skyrocket.
Then the hyperinflation?"
What are the steps involved in moving money from your right hand pocket to your left hand pocket that would cause Hyperinflation.
QUESTION???
If some of the bonds which are held by the gov. and the too big to fail banks, are cancelled would the gov. be eliminating its debt to itself?
What would be the impact on the too big to fail banks that have those bonds?
jal
I repeat ...
Quote of the day!
The USA will "spend more and tax less"
“A USA recovery will mean more jobs ... in China.”
jal
---
http://www.bloomberg.com/news/2010-09-06/obama-said-to-announce-transport-investment-program-to-spur-economy-jobs.html
Obama Said to Announce Transportation Infrastructure Plan
President Barack Obama today will propose a six-year plan to rehabilitate the nation’s transportation infrastructure with an initial $50 billion to help spur an economy that’s lost jobs for three straight months.
Obama will announce the program to fix the nation’s roads, railways and runways to union families at a Labor Day rally in Milwaukee scheduled for 3:10 p.m. New York time, the White House said in a statement.
Please read here the following and please note also the articles on the left:
Experts warn of Britain becoming a nation in hock to pawnbrokers
http://www.metro.co.uk/news/840045-experts-warn-of-britain-becoming-a-nation-in-hock-to-pawnbrokers
Please note that Metro is a newspaper you get in London at every tube station for free.
VK said:
So in both a deflationary and hyperinflationary scenario the vast majority of people lose their purchasing power rapidly but in a deflation the elites retain possession of their power as well as their ability to import which would be lost in a hyperinflation.
Not true.
During the Weimar hyperinflation the elites easily maintained their lock on the power center. (For an excellent examination of that period, read Adam Fergusson's book When Money Dies, a fascinating expose of what actually occurred then.)
How so? Easily enough . . . the power elites had the foresight to convert their wealth held in German Marks into gold, Swiss Francs, etc., so that the ensuing hyperinflation did not greatly impact their core holdings.
Do you think that today the elite have not hedged their holdings with precious metals, arable land, critical commodities, and other forms of "real" wealth?
Even Barton Biggs has advised all wealthy to invest in a farmstead well-stocked with agricultural equipment, stored food, water, wine, firearms, ammunition, and precious metals.
The elite will emerge just fine in either a deflationary or inflationary scenario. That is, until the revenge & pitchfork crowd catch up to them.
.
Ian,
This Walayat has it exactly right. The sole purpose of inflation is to steal wealth, surreptitiously and legally. And so, it has indeed been the standing policy for many a decade.
Walayat seems not to have noted Herb Stein's Law, which says that "if something cannot go on forever, it will stop." Once they have stolen everything, the inflation will have to stop.
Actually it must decline into deflationary territory before then because the flations are really a measure of flow and an impoverished population puts a heavy drag on flows. The thieving does not stop there, though the number of the Mammonite Horde is likely reduced to the tune of those hoist on their own petard.
"I realize I am a little late coming to this discussion and maybe the author is no longer responding to questions, but it is unclear what one is to do if one's debt is simply too high to get out of in the short term. I, like many students, have tens of thousands of dollars of school debt that cannot be done away with anytime soon. Thoughts?
All possible actions are pretty extreme. Things like creating a new identity and emigrating will not likely appeal; but if the alternative is literal personal destruction/suicide...
One possibility. Long ago here I brought up the possibility (vastly remote) of a universal jubilee. Even now, we are not vaguely close to the desperation or political momentum such a move would require.
But- it strikes me we might be at a point where a movement to forgive onerous student debt might actually gain support. The stories are horrendous; the villains are revolting, damage to society clear; and many/most ex-students now suffering were at least partly tricked into their situation (the others finding themselves there because of the recession; also not their fault).
Perhaps Elizabeth is the person to launch and spearhead such a movement? Or knows someone who is?
I am not as good with the "give and take" as many of you are that post on this comments section, so I leave that to the pros, for the most part.
But I do want to thank both Ilargi, and now Stoneleigh, for putting the truth out to us on a daily basis.
Stoneleigh's interview was remarkably easy to understand, and one would have to have their ears firmly closed to miss out on whats going on.
There are other things that people are keeping their eyes and ears firmly closed to also. I not only read articles, I read the comments to articles also. I read articles here, at Zero Hedge... mainstream site...and some on the not so mainstream sites.
There's been something simmering for a while in the comments sections on the not so mainstream sites, and its just now starting to trickle on to the comments sections of the mainstream sites that I read.
That something is anti-semitism. People saying the whole financial crisis is the fault of the Jews.
That reminded me of something that Ilargi and Stoneleigh had posted before, saying something to the effect that if the economy collapsed, all bets were off, we could end up with someone like Hitler in power. If I am wrong, I am sure Ilargi will correct me.
The other thing it reminded me of is the quote that forgotten history has a way of repeating itself. Those that forget history are doomed to repeat it. I believe that's the quote I'm looking for.
This is going to get very nasty before its over. Book it.
Blogger Bukko Canukko said...
(re: the Orlov piece)
Dimitri Orlov is an absolutely amazing commentator on contemporary American society.
For someone who has English as a second language, he is one of the most lucid, readable, and astute observers of all the blogsters out there.
This piece is a tremendous piece of work, a true tour de force.
.
VK wrote...
So in both a deflationary and hyperinflationary scenario the vast majority of people lose their purchasing power rapidly but in a deflation the elites retain possession of their power as well as their ability to import which would be lost in a hyperinflation.
DING-DING-DING! We have a winner, folks! VK, I think you have hit upon the "Grand Unified Field Theory" of what's going on.
Viewed through the lens of "deflation will let the elites grab more power," all the seemingly paradoxical actions by TPTB make sense. I have often wondered why Obama, and realPresident Cheney before him, and all the corpo execs who are driving everything into the ground, would do what they do. If a lowly slug like me can see that it's headed for collapse, why do these smart, rich people keep pushing events in that direction?
Well, if deflationary collapse will allow them to grab control of so much more of what we peasants thought we "owned," then that's so much better for the Real Owners. Inflation will dissolve the burdens us little people carry. Deflation will make those burdens crush us. But the Owners don't care.
If the banks wind up owning our houses and charging us rent to stay there, more power to the banks. If pension and health care programs collapse, we little people will die, but the Owner Class will have enough money to live on. Especially because they'll have an army of serfs to wipe their bottoms when the Owners get old and sick. The overall pie is going to get smaller, but the Owners will have more of what's there. And having more than everybody else is what's important to them.
They've decided to go with the saying of "Better to rule in Hell than serve in Heaven." We all know who uttered that line, eh?
Maybe they're even doing it for the ultimate good of the planet. This ol' Earth can't keep supporting 7 billion of us two-legged yeast cells. If the owners eliminate 6 billion of us, the 999 million servants the Ruling Ones have left alive won't put nearly so much strain on the ecosystem. Our elimination is the planet's salvation. All hail the econogenociders! They're killing us to save the world! Although I'm sure it's not their intent to do something good; just one of those fortunate unintended consequences...
Hi Elizabeth -
There are some student debt threads over at LATOC, some of them stickied so they're easy to find.
I sent the young (2-3 yrs out of college) farm manager of the small organic/permaculture farm where I volunteer over to a site mentioned in one of the LATOC threads, IBR info, which has some great info on how to convert your loan debt from private to goverment, how to reduce your monthly payments, and how to get your debt forgiven. He says his monthly payments have basically been reduced to 0 (but it still counts as a month of payment), and after 25 years of payments, no matter what the balance he owes, that balance is forgiven. He also said that if he was working for a 501(c)(3) non-profit, the balance is forgiven after 10 years of non-profit employment.
Ric
@CT-Hiltopper
Re anti-semitism.
Do we generally agree that the so-called 'elites', the 'movers & shakers' doing the damage are those in charge of banking, finance, broking and so on?
Wouldn't it be a simple enough matter to draw up a list and check their heritage?
I can't see anything anti-semetic in that. And if the caps fits.
From the inimitable Michael Moore,
a personal letter to Rahm Emmanuel.
* Stoneleigh's delivery improves with practice
* British tax computer under-calculates taxes and now the bill comes due; This will bankrupt a lot of people; The government taketh, the goverment taketh again, blessed be the name of the government;
* Lack of information leads to an uninformed public; The words do not exist to describe what we are currently experiencing unless you speak Geonossian
* Governments perpetuate the inflationary cycle to concentrate wealth into their own hands; Though things fall apart the center will hold and the periphery will be sent to the hunger games
* Treasury bonds will never be repaid in real terms; Their value is now the stuff of myth and legend
* Bond market dislocation will be followed by hyperinflation like a sprained ankle is followed by swelling; Buy ice futures now
* Some are all cashed up with nowhere to go; "I don't want financial advice, just tell me when to buy"
* Rumors of gold's demise have been greatly exagerated; Value of PM ETFs and physical metal will diverge; Gold will be money until money doesn't buy happiness
* Inflation and deflation are not uniform; The money supply will increase for the rich but decrease for the poor
*The end of fossil fuels changes everything; This time it will be different
* TPTB:
- Will launch another false flag operation
- Are now injecting peak oil into the MSM
- Are not interested in hyperinflation
- Can remain in power in either 'flation
* Obama announces $50 billion transportation plan; New freeways to be built in Guangzhou, shipped to America and re-assembled in North Carolina
* The end of liberalism leads to moral nihilism; In other words Republican rule will cut taxes for the rich and raise military spending
* A society's pottery quality tells all; Peak pottery occurred on August 21, 2010; Even so will I break this people and this city, as one breaketh a potter’s vessel, that cannot be made whole again
* Don't spectate the collapse; Ben Bernanke and Jerry Jordan announce the Fed will purchase ice cream; Only two things are ever completely worthless: 8 track tapes and Ford Cortinas
* Pay the minimum on your debts and wait for the dreamy jubilee and the attendant rape and looting
* Cyclops: Give me more wine, little man and I will give you a special favour, if you will tell me your name.
Odysseus: Very well, Cyclops, I shall tell you my name. I am Nobody. Now give me the favour you promised.
Cyclops: This is my favour. You, Nobody, shall be the last man I shall eat.
Blogger Bukko Canukko said...
If the owners eliminate 6 billion of us, the 999 million servants the Ruling Ones have left alive won't put nearly so much strain on the ecosystem. Our elimination is the planet's salvation. All hail the econogenociders! They're killing us to save the world! Although I'm sure it's not their intent to do something good; just one of those fortunate unintended consequences...
Bukko,
Bukko,
Bukko,
PLEASE get back on your meds and stop spouting this asinine, tin-foil-hat-conspiracy nonsense!!
You are, after having made many reasoned and logical posts heretofore, starting to sound like someone who has completely lost it!
I'm constantly amazed at how many contributors here, after having made innumerable logical and sane evaluations of the world as it currently is, somehow go off the deep end on occasion and spout the most incredible stuff that ever was published!
.
Fantastic interview!
A couple articles I'd love to suggest:
1. Capitalism & Slavery
http://www.planbeconomics.com/2010/02/05/capitalism-slavery/
2. Energy Scarcity Could Lead to Hyperinflationary Depression
http://www.planbeconomics.com/2010/08/23/energy-scarcity-could-lead-to-a-hyperinflationary-outcome/
Regarding the problems of people with student loans. . . they should move their loans to the new government direct student loan program, and sign up for the income based repayment program, which raises/lowers thepayment based on your income.
If other debts are a problem, people should run, not walk, to the nearest bankruptcy lawyer while this is still possible.
CT-Hilltopper,
I'm sorry - you're quite right.
Let's blame no-one, point no finger.
Let's just take it on the chin (feels real good so far..and getter better)
As another posters' U Tube link intimated, 'they' may have plans to eliminate many of US!
Useless eaters, I think we're called.
Cool.
@Ventriloquist: I administer meds; I don't take them. Much of what I write is coated in a thick sludge of black humour.
That said, I sincerely believe that the world has come to a time of dying. With peak oil, peak food, peak credit, etc. we have hit the point of peak humans. The world cannot support exponential expansion of the our species. We coulda slimmed our numbers down the easy way if we had done things sensibly, or even semi-brutally like China. But we didn't. So we're going to do it the hard way.
I look at the people who I am paid to keep alive in hospital, bless their poor suffering hearts. I hustle my ass off to keep them clean, nourished, medicated and free from pain. But when the money system sputters and society can't afford it any more, the 52-year-old guy in Bed 640 who's been shooting heroin for 20 years and now has a bone infection that started with dirty syringes will not have the fancy PICC line that's infusing IV antibiotics for the 6 weeks it will take to clear it up. The 38-year-old HIV+ First Nations prostitute with the paralyzed left arm from the brain bleed after her boyfriend punched her in the side of her head is going to be turfed back to her Downtown Eastside slum hovel, where she will be raped to death. The 65-year-old guy who's gorped from early onset dementia and was admitted due to dehydration because he doesn't know what to do re: swallowing the pureed mush we spoon into his mouth -- he'll die of thirst.
And that's just part of my patient allocation. One nurse, one part of one ward in one hospital in one town. When the hard crash hits, the money to extend these existences will go away. Sick old people as a class will be eliminated from the population. Tens of millions will die prematurely in North America alone because the money will not be there to keep them alive. My job, and the jobs of millions of workers like me, will disappear in this tidal wave of death.
We're not even getting into deaths from starvation when the food distribution system breaks down in the Third World after a catastrophic financial hiccup. The resource wars. The hand-to-hand ethnic slaughter as old grievances play out because central authority ceases to have the power to stop them. The clashes when masses flee eco-disaster and crash into the people who are already living on the land that the refugees are fleeing to.
Some of the horror! the horror! could be alleviated if sensible policies were implemented. But who would have to implement them? People with power. People with money. Remember how Kanye West said in the wake of Hurricane Katrina: "George Bush doesn't care about black people"? Well, rich powerful people don't care about average people.
The rich, they are different from you and me. They truly don't give a shit. Ask Lloyd Blankfein how much he cares about you, if you can get past his armed guards. Ask your elected representative, but make sure you have $1,000 in your hand if you want to get a word in edgewise.
We are ants to them. We will be left to fend for ourselves and die when the "you're on your own" time comes. We won't die by intent, just by neglect. The rich -- not the Jews, although some of are Jewish -- so supremely don't care. It will be just fine with them, because we ants can be easily hired and disposed of.
Ask any illegal immigrant in America how that goes. In the future, we will all be Mexicans in our own land. Those of us who survive, that is. I reckon when it plays out, say by about 2100, there's going to be 999 million of us left to serf the Masters.
Speaking of demonizing /scapgoating a group it seems obvious to me that it is Moslems who are the current target.
See the over the top rage against a mosque at " ground zero", the proposed burning of the Quaran in Florida...
Just last week I was in a conversation with a group of senior women. One brought up the " outrage" of a mosque at ground zero. I was taken aback as she as a Cdn had internalized the attack on the Twin Towers. It was impossible to examine the facts and what is at risk. When I pointed out that Moslems also died at 911 the woman stomped off in a rage, all conversation collapsed into awkward silence. I made a weak attempt to explain what democracy, freedom to worship means in our constitution etc. Again eyes turned away and more silence. I have not slept well since that spontaneous encounter with usually kind and caring women.
While we were all busy with acquisition the age/spirit of enlightenment has passed by,can be seen riding off into the sunset....
I find myself in a bizzare position in that I am not a religious person. I am on guard to maintain a separation of Church and State. Yet these days I speak often about freedom of religion.
@ Bukko 2.47am
That's one powerful post sir.
And a large intravenous of grim, but undeniable reality aswell. Respect.
Z.
@Bukko - very powerful and moving. Yet, most people are either clueless or in denial what is about to befall all of us.
@scandia - People who are upset with the building of the mosque near 'Ground 0', should instead be directing their anger at the banksters and Wall Street.
New post up.
The Infinite Elasticity of Credit, Part I
.
Bukko said:
Ask any illegal immigrant in America how that goes. In the future, we will all be Mexicans in our own land.
Yes, and ask legal immigrants as well who are and have been victims of "American" bigotry. We will all be treated as aliens in a land ruled by the wrath of the rich and powerful, where no crumbs are thrown at us.
Powerful post!
Institutions are corrupt, indeed, but so are the people! Most people do not want to look at what you see. They'd rather enjoy the hedonism of the present, keeping the blinders on to the end by choice, not transition to a simpler lifestyle. The Third World, our brothers and sisters? Nooooooo, most would say "I'm not my brother's keeper" in relation to fellow humans and the Earth!
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