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Charting The Ten Year Prelude To The Keynesian Endgame

Tyler Durden's picture




 

From John Lohman

2001-2010: Ten Year Prelude To The Keynesian Endame

Alas, one hundred years of the government’s attempts to mute the natural business cycle are slowly and painfully coming to an end.  A period where the government proactively encouraged consumption until it became 70% of the economy, we produced very little, and our savings rate reached zero.  A period where home ownership was promoted as the ultimate supreme goal until the last citizen that could fog a mirror yet was least able to afford it was suckered in.  As this leveraged consumption pyramid is finally ending, the government and central bank have embarked on one final mission to prop it up using the same tools that got us here in the first place: more leverage.  Only this time on a logarithmic scale.  Unfortunately, the scale is so large that it will not only guarantee an endgame, but it will accelerate it.  The visual below contains a few pieces of evidence that seem to confirm this, namely that over a ten year period: the consumer is stuck with an underwater balance sheet and the Fed’s attempt to create yet another bubble is only making it worse; outside of government efforts, the economy is unable to generate  sustainable job growth; and finally, the leverage scheme is so large that it no longer has a positive impact on growth (“debt saturation”).

 

 

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Sat, 03/19/2011 - 17:30 | 1076613 TruthInSunshine
TruthInSunshine's picture

Paul Krugman just sent me a text proclaiming that he likes this article and the analysis contained within quite a bit, but there's nothing presented that some massive fiat printing won't resolve.

Sun, 03/20/2011 - 09:44 | 1078417 Zero Govt
Zero Govt's picture

Krugman knows about as much of economics as the socialist politicians of the Norwegian Govt (ie. the Nobel Committee)

Sat, 03/19/2011 - 17:31 | 1076619 jesse livermoore
jesse livermoore's picture

I got an extra ticket to the charlie sheen show .............  anybody wanna make me an offer..?..

Sun, 03/20/2011 - 06:41 | 1078180 chumbawamba
chumbawamba's picture

I offer tree fiddy.

I am Chumbawamba.

Sun, 03/20/2011 - 10:51 | 1078609 TBT or not TBT
TBT or not TBT's picture

Involving one of the porn actresses?

Sat, 03/19/2011 - 17:30 | 1076622 Hulk
Hulk's picture

Got Gold? Silver? The love of a good woman?

Sat, 03/19/2011 - 17:33 | 1076643 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1!

+ 2!

+ 3!

Sat, 03/19/2011 - 18:00 | 1076729 string
string's picture

+3 ?!?! That's WAY too expensive.

Sat, 03/19/2011 - 18:15 | 1076786 Hulk
Hulk's picture

DoChen and I went the cheaper, import route...Great way to increase ones swear word vocabulary too!

Sat, 03/19/2011 - 21:02 | 1077256 slewie the pi-rat
slewie the pi-rat's picture

 

 

it was love of/for women that made me what i yam today, unfortunately, hulk.  so, fortunately, i can say, today, that 3 outa 3 ain't bad...but sometimes i think 2 outa 3 might be a bit more stable for old slewie...

but, cupid just loves to nail my black little heart;  i yam trooly blessed!

Sat, 03/19/2011 - 21:08 | 1077270 Cleve Meater
Cleve Meater's picture

Si... Mutually exclusive.  Love of a good woman = no gold/no silver.

Sat, 03/19/2011 - 18:34 | 1076847 masterinchancery
masterinchancery's picture

+3

Sat, 03/19/2011 - 17:38 | 1076659 So Close
So Close's picture

Who is John Gault?

Sat, 03/19/2011 - 18:48 | 1076899 StychoKiller
StychoKiller's picture

Buy a ticket and find out:

http://www.atlasshruggedpart1.com/

Sat, 03/19/2011 - 21:14 | 1077287 flacon
flacon's picture

Wow. Looks like a quality production. Can't wait. 

Sat, 03/19/2011 - 18:58 | 1076930 Matte_Black
Matte_Black's picture

see: Atlas Shrugged, Ayn Rand (1957)

Some Libertarians cream themselves over Ayn. She completely legitimizes sociopathy under a bullshit rubric she calls objectivism.

John Gault is the intrepid hero of the story... you'll have to read it for yourself to understand the reference.

Sat, 03/19/2011 - 19:20 | 1077020 Andy_Jackson_Jihad
Andy_Jackson_Jihad's picture

If you thougt that was a question and not a statement it indicates you never read the novel and are regurgitating what youread elsewhere.  Fail.

Sat, 03/19/2011 - 19:34 | 1077033 Matte_Black
Matte_Black's picture

oh. My bad. I forgot you guys like to just slip into character like that. Fail.

Sensitive much? lol...

Sat, 03/19/2011 - 21:34 | 1077341 Lord Koos
Lord Koos's picture

Thousands of ditto-heads on this site.

Sat, 03/19/2011 - 22:20 | 1077467 Matte_Black
Matte_Black's picture

Dittoheads, lol... do you think that is what is is? Perhaps. I always wondered, though, how Rand-lovers on this site explain Greenspan, a Rand protege. I dunno. Cognitive dissonance.

Sat, 03/19/2011 - 23:25 | 1077578 eftian
eftian's picture

I have a hard time understanding how someone who wrote "Gold and Economic Freedom" could have abandoned his core values so thoroughly.

I like this instead.

http://www.roadtoroota.com/public/101.cfm

Sun, 03/20/2011 - 01:19 | 1077895 Matte_Black
Matte_Black's picture

Mind = Blown. Thx

Sun, 03/20/2011 - 13:11 | 1079016 oklaboy
oklaboy's picture

Jeesuz H cryist, how smart can greenspan be? Hell he marries Aaaaannndddreea  Mitceull   reporting. not alot of smart there

Sun, 03/20/2011 - 03:38 | 1078093 NidStyles
NidStyles's picture

Hardly, the difference is at one time he was a real person that didn't work for the beast of the NWO.

Sun, 03/20/2011 - 06:48 | 1078181 rich_wicks
rich_wicks's picture

I always wondered, though, how Rand-lovers on this site explain Greenspan

How do you explain:

  • Judas
  • Brute
  • Benedict Arnold
  • Jonathan Pollard

Pretty simply - they are traitors.

It's been suggested that Greenspan might not be a traitor, but the most insidous person in the world to have used his influence and power to force the world back onto a gold standard by purposely destroying the world's reserve currency in such a magnificent way, that it will be centuries before humanity tries John Law's experiment again.

Sun, 03/20/2011 - 08:32 | 1078273 Vagabond
Vagabond's picture

Greenspan joined the EE decades ago.  Read his 1967 article on gold and you'll get a good idea what happened to him.  He should not be lumped in with the libertarians.  He may have some of the rhetoric but his actions mark him as a player in the EE.

http://www.dailypaul.com/112046/alan-greenspan-1967-gold-economic-freedom

Sun, 03/20/2011 - 08:43 | 1078301 Richard Head
Richard Head's picture

You've "always wondered", for 2 weeks and 6 days?  Fucking troll.

Sun, 03/20/2011 - 10:11 | 1078470 Matte_Black
Matte_Black's picture

"You've "always wondered", for 2 weeks and 6 days?  Fucking troll."

rflmao... yes, you are right. I was born 2 weeks and sixs days ago and had never read zero hedge before that - ever - never even heard of it... really.

Who is the fucking troll now?  lol...

Sat, 03/19/2011 - 21:33 | 1077339 Lord Koos
Lord Koos's picture

I read it when I was 15 and thought it was a great story, plot developement, etc.  As an ideology -- major fail.

Sat, 03/19/2011 - 21:41 | 1077348 akak
akak's picture

Yes, we certainly cannot have people thinking that their existence is self-justified without constantly having to sacrifice itself to the wishes and power of the mob and the sociopathic ponerists who masquerade as "leaders", both political and religious.

Sat, 03/19/2011 - 21:54 | 1077396 ebworthen
ebworthen's picture

lol

Sat, 03/19/2011 - 21:58 | 1077408 Matte_Black
Matte_Black's picture

lol. And it comes with free energy to boot. Sounds like stealth socialism to me. hahahahahahahahahahahaa

Sun, 03/20/2011 - 03:10 | 1078076 Xkwisetly Paneful
Xkwisetly Paneful's picture

Shhh the FED as the largest consumer, employer, borrower, lender, landlord, tenant, real property owner and parents to 50million people in the country has nothing to do with anything.

Sat, 03/19/2011 - 22:16 | 1077449 Matte_Black
Matte_Black's picture

lol... me too. I loved the story. And The Fountainhead as well. Great stories, lousy people.

Sun, 03/20/2011 - 07:45 | 1078222 CPL
CPL's picture

Most people are lousy and have been given ample opportunity to illustrate the fact.

Sun, 03/20/2011 - 01:37 | 1077939 bluebare
bluebare's picture

It must get really good after the first 868 pages but I quit reading around there because by that point I really didn't give a rats ass about John Galt.

Sat, 03/19/2011 - 19:02 | 1076959 Vint Slugs
Vint Slugs's picture

Gault ?

Sat, 03/19/2011 - 20:14 | 1077144 jimijon
jimijon's picture

Maybe he meant DeGault?

Sat, 03/19/2011 - 20:22 | 1077166 Council of Econ...
Council of Economic Terrorists's picture

Prometheus, the one who changed his mind...

Sat, 03/19/2011 - 17:41 | 1076672 indio007
indio007's picture

This illustrates the difference between human want and need.

When people go to preservation mode we can operate on very little resources. 

That doesn't create jobs or raise GDP. Especially when discretionay income

is all going to get out from underwater. That is.... money going to a source that produces nothing . Let's coin it "residual bubble debt".

 

Sat, 03/19/2011 - 19:17 | 1077010 Chuck Walla
Chuck Walla's picture

That doesn't create jobs or raise GDP.

Apparently, neither does the Fed.


Sat, 03/19/2011 - 17:43 | 1076681 UGrev
UGrev's picture

I feel oddly in favor of the crash with the understanding that the replacement system will be.. well, at I hope will be.. far more rational than what we have to endure now. 

Sat, 03/19/2011 - 18:09 | 1076762 tgatliff
tgatliff's picture

I doubt at this point that the FED will throw in its cards... My guess is that the great crash is still 5ish years away.  

History is clear on the end game, though... First, the financial crash which signifies the end of the 3rd turning.  The final end comes about 10 years later when a great military response marks the end of the previous era...

Sat, 03/19/2011 - 18:27 | 1076825 lordbyroniv
lordbyroniv's picture

Yes,.........

 

Winter IS coming.

Sat, 03/19/2011 - 18:36 | 1076853 UGrev
UGrev's picture

You think it will take that long? Things seem to be ramping up in a f(x) fashion. The time-line looks like it compresses every iteration. But I don't want to try to predict anything.. anticipation is the mother of insanity. So I'm just going to keep moving on 30 day resets. 

Sat, 03/19/2011 - 19:39 | 1077072 tgatliff
tgatliff's picture

Absolutely... The ultimate end, in my opinion, will be politically based.  Meaning, the current powers will sacrifice anything to keep their current financial system in place.  Hence, why they are ignoring the cost of living issue.  Only a political response will force them to do otherwise. 

The new group of politicians have one key difference than what we have seem previously... They are quietly working and seem less interested in sound bites.  That would indicate that they are more "Nomad" personalities than "Awaken" personalities.  Historically, this would indicate that the process of change from the 3rd turning has already started...

In my opinion... Historically speaking... I would expect things to essentially remain the same until the end of 2012.  After the next election cycle which will bring in another wave of the "nomad" personalities, they will continue to clamp down on government spending and the FED's tools.  Ultimately these actions will be the final blow into the 4th turning...

 

Sat, 03/19/2011 - 20:15 | 1077146 Psquared
Psquared's picture

I think that makes a lot of sense ... unless these nomad personalities are actually interested in the betterment of society.

As to the next iteration, I believe that each incarnation simply brings a new set of rulers and oligarchs. No matter how noble the intent. The Founding Fathers, particularly John Adams and Benjamin Franklin knew this and stated their concerns early. Even Adams caved in when he tried to appoint the midnight judges before Jefferson took office.

Sat, 03/19/2011 - 21:22 | 1077316 slewie the pi-rat
slewie the pi-rat's picture

 

hi, UG rev @ #1076853!

yes, as we "wait" for the fiat currency/debt/QE "endgame", don't be too detached and hopeful of something "better". 

if i yam correct in seeing that our bankster-owned pols have sold us completely out to the "New World Order" of inter-national SUPER-fiat currency and, uh, basically, complete loss of nationhood and (yes, i'll say it!) God-given equal birth before the law, and the legally-protected liberties of free PEOPLE, then perhaps we should be a bit more aware of the downside, ok?

Liberty's American People!   armed to the freaking rafters, too!

Sat, 03/19/2011 - 21:57 | 1077407 ebworthen
ebworthen's picture

You just reminded me I really need to order that Mini-14 and ammo before it's too late.

Just the shotgun won't be enough, need to have something with more reach and penetration.

I'm thinking 9mm and .223 so I can scavenge ammo from the establishment if needed.

Sun, 03/20/2011 - 00:22 | 1077731 RockyRacoon
RockyRacoon's picture

I like my Mini-14 and keep in mind that it eats 5.56 as well as .223.

Sat, 03/19/2011 - 19:40 | 1077082 equity_momo
equity_momo's picture

I think your timing is way out. Cycles and intuition point to collapses coming almost out of the blue. This "recovery" is about done , with $ commodity prices where they are. Data will deteriorate soon and the Feds printing - which it will continue to do - will be no match for the Tsunami of deflation cresting in the very near term future. I'd be optimist in saying we have 2 years before a huge financial reset. Once that happens the great military responses will not take 10 years to manifest.

Sat, 03/19/2011 - 20:26 | 1077168 Psquared
Psquared's picture

The prelude takes time, but the actual reset will happen literally overnight. There are black swans circling right now but they are probably not the ones we should be concerned about. We have known for a long time that unrest is brewing in NAME so that is not a surprise. It also looks as though Japan has the nuke situation under control so the final push off will be from something else - something we have not seen or told about.

Sat, 03/19/2011 - 22:19 | 1077461 Manthong
Manthong's picture

Yes, the tipping point will come out of the blue. The Japan thing came out of the blue.. and its total impact is in no way yet apparent. It will take a number of weeks figure out. I have a hard time thinking that a pile driver to the world's 3rd largest economy that is 2X GDP in debt and sitting on $1Trillion in US Treasury debt won't have a game changing effect. Regardless, even discounting Japan, I'll be surprised if something else doesn't happen and the move towards value equilibrium doesn't begin in earnest within a year.

Sat, 03/19/2011 - 20:53 | 1077241 pacu44
pacu44's picture

Well, the same clowns that dont read the bills and rush through the Bush, and Obama bank thefts along with their willingness to allow the FED to do their job doesnt give me much hope they will upgrade from the ashes.

 

But I hope too...

Sat, 03/19/2011 - 17:47 | 1076689 zaknick
zaknick's picture

Debt saturation, bitchez!!

DoChen,

I have personally seen the joooos in many countries take advantage of their friendly yet gullible hosts (as they throughout millenia as the historical record shows). They thrive with the same policies which brought your country to the above described situation.

Please, if you are an ignorant jooooo loving fuck, get a clue.

Sat, 03/19/2011 - 18:16 | 1076788 Bearster
Bearster's picture

You are an seething, envious little mediocrity.  Feel the hate.  Feel it burn...

Sun, 03/20/2011 - 01:23 | 1077905 Matte_Black
Matte_Black's picture

Just a guess, but I think you are the one feeling those feelings.

Sat, 03/19/2011 - 17:54 | 1076715 baldtaco
baldtaco's picture

We have to have a crash to get out from under the debt. All paper assets will be worthless. Houses will be free. New currency will be backed by something ( gold or silver ). The rest of the world will not be not be paid back. Obama will be blamed for currency collapse. Everyone will get new currency based on their social security #. Most people if offered would give up there 401 k and retirement to have their home paid off. Everyone gets a little currency to start. Then the Matrix is retriggered. Read the road to roota articles it makes sense to me.

.223 au h2o

Sat, 03/19/2011 - 18:02 | 1076745 cossack55
cossack55's picture

When we retrigger I want Park Place, at least two railroads and the electric companies.  Will there be a Carbon Credit draw-card spot?

Sat, 03/19/2011 - 20:02 | 1077126 FOC 1183
FOC 1183's picture

No, but you get 200 carbon credits for passing GO

Sat, 03/19/2011 - 21:49 | 1077377 stephysat28
stephysat28's picture

i want the green orange and yellow properties!

Sun, 03/20/2011 - 03:14 | 1078079 Xkwisetly Paneful
Xkwisetly Paneful's picture

As if the assets wouldn't largely end up exactly where they are now.

Sat, 03/19/2011 - 18:54 | 1076921 lynnybee
lynnybee's picture

Yes !!  The ROAD to ROOTA theory !! ........ I am very interested to know what others think about BIX WEIR'S theory ~~ that Alan Greenspan is really a good guy & Diane Feinstein & Nancy Pelosi are really good guys who know about a new gold mine !!  ........... if anyone would like to respond to this ROAD to ROOTA theory, I'm very interested to know their opinion !!

sincerely........

Sat, 03/19/2011 - 20:20 | 1077159 jimijon
jimijon's picture

Another reason to love ZH. Never heard of this one, but it does coincide with my renaissance theory... after 2012.

Sat, 03/19/2011 - 20:28 | 1077180 francis_sawyer
francis_sawyer's picture

@lynnybee...

 

I've recalled numerous times reading your input on this (R2R)... Not to my chagrin, BTW :-)

My 1.618 cents...

1) The collapse of the fiat monetary system will be total and complete equalizing the playing field between the "haves" and the "have-nots".

Eventually yes... Immediate??? Not so sure...

2) All paper/electronic debt and assets will evaporate with the collapse of the fiat money system.

Theoretically, yes in that scenario... The echo of how they may be recorded is subject to debate...

3) Those who have perpetrated the outrageous and monstrous crimes of the past 100 years will be hunted down and prosecuted (if they are lucky).

Good luck with that... I HOPE... But 'hope" is not a reliable criteria for advancement (just ask Obama voters)...

4) The US will issue a new gold backed currency (domestically) allocating it according to future social security payments due.

I'd suppose it "should" be so... But to pin it to "social security" obligations... Ha Ha Ha! You must assume that the government really gives a FF...

5) The US will allocate much of the new gold backed money to support the funding of schools, police, health care, infrastructure and other necessities for a fully functioning society.

Ditto #4

6) Globalization will end upon the collapse of the derivative structure and all countries will end global trade concentrating on their own internal commerce.

Has a TEMPORARY breath of truth... Only to be re-instututed forthwith... "Globalization" has been going on since ships sailed & beasts of burden pulled carts...

7) All US overseas troops will return home to protect our boarders and ensure the safety of our citizens.

LOL... In chaos... It's every man/woman for themselves...

8) The US population will be fully employed working to replace all the overseas production lost in the reversal of Globalization.

Yeah... I guess... They'll be "fully employed" separating the wheat from the chaffe & the curds from the whey... LOL

9) The United States will tap into its VAST natural resources that have been hidden away for years in National Parks, Military Bases and sites deemed "Ecologically Sensitive".

The "United" States??? or The "Divided" States??? I'm guessing if things get that bad, the US will split up...

10) A vast array of new energy technologies will be revealed since there will be no more need for the "oil standard" that has supported the US Dollar for the past 50 years.

Yeah... The "new technologies" are called "windmills" (the kind that pull underground water to the surface", "cotton gins", "horse drawn chariots" & the like...

11) The implementation of the new monetary system will usher in a glorious new "Golden Age" that the world will embrace after years of being lead around like "Sheeple".

"Golden Ages" last many years for the simple reason that when TECHNOLOGY is reduced to rubble, it takes MANY YEARS for HEDONISTIC PLUTOCRACIES to regain bubble status...

---

That's my best effort :-)

Francis_Sawyer

 

 

 

 

 

 

 

Sat, 03/19/2011 - 21:23 | 1077319 lynnybee
lynnybee's picture

to FRANCIS _ SAWYER :    so kind, so nice of you.    thank you very much !   i love the people on ZEROHEDGE .   

Sat, 03/19/2011 - 23:04 | 1077531 francis_sawyer
francis_sawyer's picture

What I like most about you is that you express your thoughts/concerns from the heart...

I tried to respond in the same way...

Frankly - I haven't a clue as to how all of us will endure these things... BUT... I imagine we WILL endure them... (& at least try our best to cope and push on)...

FS

 

 

Sat, 03/19/2011 - 21:54 | 1077386 Hacked Economy
Hacked Economy's picture

@francis,

9) The United States will tap into its VAST natural resources that have been hidden away for years in National Parks, Military Bases and sites deemed "Ecologically Sensitive".

The "United" States??? or The "Divided" States??? I'm guessing if things get that bad, the US will split up...

That's been my personal belief...there's already such a massive divide between the two (left and right / have and have-not) schools of thought in the USA that something is gonna give.  Now that we're well past 300 million inhabitants (note that I didn't say "citizens", cuz many here aren't and don't want to be), the spectrum of differing opinion has polarized into a widening chasm, and more and more people are becoming tagged as sheeple or joining up as soldiers in the political skirmishes.  I find it rather possible that an eventual outcome after the [Crunch/Crash] dust settles is the birth of two separate nations.  Divided States, indeed.

BTW...I was watching the MSM news (I know, I know, but I've spent all day working outside in my yard and wanted to veg for a few minutes) watching the first salvos in the Libyan offensive.  They broke in to quickly announce that the State of Utah has officially chosen and declared a State Handgun.  The Browning M1911.  Simply awesome.

Sat, 03/19/2011 - 23:12 | 1077555 francis_sawyer
francis_sawyer's picture

Something is gonna give (and it always does)...

The problem is... the "prediction" game is often a losing one...

Nevertheless - CHOOSING SIDES doesn't have to be that hard of a thing to do when one's priorities are established...

On the "Browning M1911"... I can't say I know a lot of detail on that (& I'm not inclined to try and play pseudo-expert here), but I have heard a lot of anecdotal stories that "Brownings" (across the board), are well respected...

So your "story" there is an interesting one... (especially in light of the fact that UTAH, from what I've heard, has also declared gold & silver as legal tender for payent of taxes)...

 

 

 

 

Sun, 03/20/2011 - 11:07 | 1078655 TBT or not TBT
TBT or not TBT's picture

There are some good 1911's being made, and there are loads of unreliable crap 1911's.     All 1911's that I know of have a safety on them, which makes them stupid for concealed carry.   They're also big, heavy, and overpowered.  It is better to have more 9mm rounds(with hollowpoints, and high pressure loads) in the magazine (and one in the chamber, ALWAYS) than to rely on fewer, big ass .45 ACPs.  Nevermind reliance on the ability to flick off that thumbsafety when adrenaline has removed all of your distal dexterity.   Safeties are life threatening for concealed carry.  

Sat, 03/19/2011 - 22:08 | 1077434 ebworthen
ebworthen's picture

 

I've read that, it seems to make some sense.

However, the older I get, the harder it is to see these grand scheme theories playing out over time.

People can't keep a marriage or family together, how are you going to mix up a bunch of races and nationalities and families and stick to the plan?

I don't see it.

What I do see is human frailties and greed coalescing into patterns of behavior and action; over time, over several lifetimes. 

It makes sense the spineless greedy jellyfish of humanity would find themselves as despots, dictators, politicians or bankers. 

After all, they lust for mammon, for power, not contentment.  It would be natural over time that their greed would bring them together, and that the other forces of nature would sweep them from slate. 

It all takes time, as a majority simply want to live, spend time with kids and loved ones, and have enough to be content.  That majority can be led, pushed, cajoled, enslaved, manipulated by the lustful, until such time as the pressure is too great and a collapse occurs.

It would fit natural cycles:  bioligical, physical, and psychological. 

We could call bananas money and tree limbs guns and our society would not differ from that of Gorillas or Baboons much, would it?

 

 

Sun, 03/20/2011 - 00:31 | 1077747 RockyRacoon
RockyRacoon's picture

Your beloved, well fed, pampered household pet, Fido, will kill a rabbit for sport, fight another dog to the death for a moldy old bone -- while a full bowl of Alpo sits nearby.  I don't see much difference 'tween us and them.

Sun, 03/20/2011 - 01:27 | 1077912 Matte_Black
Matte_Black's picture

My dogs wouldn't do either of those things, but then they're shi tsu's. Still, I see what you are saying...lol

Sun, 03/20/2011 - 06:46 | 1078184 rich_wicks
rich_wicks's picture

You don't have a dog do you?

Sun, 03/20/2011 - 14:48 | 1079247 RockyRacoon
RockyRacoon's picture

I have 2 dogs now.  Just now the wife is finishing a ceramic urn for my last great dog's ashes.  I've always had 2 dogs around.   All but a few have been rescues, as are the current two.  My last dog was a rescue and the best dog I've ever had.   In her younger years I watched her chase down a rabbit, shake the little animal like a rag doll, and walk away from the dead body.   Had a Boston Terrier that could out maneuver any squirrel, catch and kill it for the fun of it.  I know dogs.

Sat, 03/19/2011 - 19:22 | 1076985 Matte_Black
Matte_Black's picture

I haven't read this Road to Roota theory, but your scenario seems to be missing what is usually the final step in that chronology:

War... big war... world war...

Sat, 03/19/2011 - 20:13 | 1077141 Hacked Economy
Hacked Economy's picture

To baldtaco:

Trade my 401(k) for full forgiveness on my mortgage?  I'm younger, so even though my mortgage is relatively small (because I live within my means and don't buy McMansions), it's still a bit more than my 401(k) balance.  Besides...I stopped contributing a while back and put the extra monthly money into PMs, which have already given an ROI the 401(k) could NEVER have dreamed to give me.

PMs.  The new retirement plan.

Yep:  I'd trade in a heartbeat to own my home outright and dump the FRN-based 401(k) that's doomed in the end.

Sat, 03/19/2011 - 17:59 | 1076733 cossack55
cossack55's picture

Funny. The only people who saw this coming wear tin-foil hats.

Sun, 03/20/2011 - 12:12 | 1078889 Diogenes
Diogenes's picture

These days your only choice is tinfoil or koolaid.

Sat, 03/19/2011 - 18:16 | 1076794 Bearster
Bearster's picture

The business cycle is anything but natural.  It is created by the central banks!

Sat, 03/19/2011 - 18:20 | 1076804 So Close
So Close's picture

Disagree...   Buisness cycle was/will always be here...  Central banks influnence natuarly occuring cycles.  

Sat, 03/19/2011 - 18:41 | 1076879 tgatliff
tgatliff's picture

I peronsally disagree.. Business cycles are created by fractional reserve banking.  Meaning, expansion of the money supply thru expansion of the monetary base, and then a contraction in the money supply.

Full reserve banking clearly would solve the business cycle issue, but then you have a problem with how do you rationally expand the money supply when needed?  Ideally it should be population based, but the mechanism would be too easily manipulated...

Sat, 03/19/2011 - 19:47 | 1077104 JoeSexPack
JoeSexPack's picture

In a relatively fixed money supply system (Au & Ag), price & wage fluctuation would be another way to expand the money supply, right?

Meaning that the actual money supply would be fixed, but prices of labor & goods would move to reflect changes in supply & demand.

Same wine, different label?

Full Reserve Banking could have savings accounts (no interest, savers pay fee to bank, deposits available on demand) & lending accounts (bank invests customers money & pays interest as loans are repaid, deposits not available on demand). Stable, simple & fraud free.

Sun, 03/20/2011 - 12:14 | 1078894 Diogenes
Diogenes's picture

There were business cycles and bad depressions on the gold standard. That is why the present system was invented, to try and ameliorate the defects of the un-managed economy.

Sat, 03/19/2011 - 20:11 | 1077139 InfinityZero
InfinityZero's picture

I dissagree , cycles are created by credit

Sun, 03/20/2011 - 00:47 | 1077799 Timothy
Timothy's picture

No. Business cycle is created by government intervention in any facet of the free market. It doesn't matter if its interest rate, or financial regulation in capital requirements. Bubbles happen anywhere the government sticks a limit in front of moving capital.

Sun, 03/20/2011 - 01:34 | 1077931 Matte_Black
Matte_Black's picture

Okay, so I'm looking for bubbles in child porn, heroin, crack, illegal arms, steroids, and hookers.

Help me brother. I want to ride that wave. Where is it? Can't find it.

Sun, 03/20/2011 - 13:19 | 1079032 falak pema
falak pema's picture

Hahaha...'cos you believe in free markets. The only real mature market is an oligarchy structured one that tends towards monopoly. Try thinking that oligarchs believe in 'invisible hand market theory' is like wishing your wife loves wearing a chastity belt when you travel abroad. They want to rig the market like you want to shag your mistress when on voyage like every true red blooded male who is monogamous under constraint not by natural instinct. That is the only way you shift the profitability/risk trade-off to a comfort level where you can shag your mistress and still hear the tills singing 'money coming in on the button' to your heart's content. Grow up and enjoy the ride, until its tipping-point and you join the plebes on the roller coaster ride of life.

Sun, 03/20/2011 - 13:24 | 1079047 falak pema
falak pema's picture

Without FRB you wouldn't have a capitalistic system. This system needs credit to leverage future investments on a trade-off scale of market choices between profitability and risk. On full reserve banking there would be no leverage available to take risk. We would be back to the good old physical barter days. We learnt this from the Venetians...FRB....

Sat, 03/19/2011 - 23:07 | 1077545 malek
malek's picture

You have it backwards. The central banks are suppressing the natural business cycle.

Sat, 03/19/2011 - 18:15 | 1076796 Tim Knight from...
Tim Knight from Slope of Hope's picture

This is seriously one of the coolest graphics I have ever seen. Thank you.

Sat, 03/19/2011 - 19:22 | 1077027 FOC 1183
FOC 1183's picture

You're welcome. Glad you liked it.

Sat, 03/19/2011 - 20:19 | 1077147 akak
akak's picture

It is too bad, though, that the author displays the graph of the laughably manipulated, lowball CPI statistics (which absurdly and insultingly claim that overall consumer prices have risen only 26% since 2000) as if it had any legitimacy or relevance whatsoever.  That figure might have been accurate in 2004, but certainly NOT at the end of 2010.

Sat, 03/19/2011 - 21:19 | 1077305 FOC 1183
FOC 1183's picture

The author realizes the BLS is full of it and only includes the CPI because, even In the best case (I.e., as presented), it still provides the harsh reality.

Sat, 03/19/2011 - 21:25 | 1077326 akak
akak's picture

I understand your position, FOC, and was not personally attacking you in any way above.  The outrageously manipulated propaganda numbers issued by the BL(B)S are just a pet peeve of mine, as every chairman of the BL(B)S is now fully aware, having taken it upon myself to have so informed them personally.

Sat, 03/19/2011 - 18:22 | 1076812 tictawk
tictawk's picture

Its not just bad because we are consumption based economy, it is DEBT based consumption.  We are all consumers but if we consume part of our savings, its not necessarily bad.  Debt based consumption presumes a constant future income stream that will satisfy our debt.  This all changes when our current income gets crimped.

Sat, 03/19/2011 - 18:22 | 1076816 Punderoso
Punderoso's picture

 Excuse grammar/spelling, I am too pissed to spell check:

Here it is:
http://charlotte.fbi.gov/dojpressrel/pressrel11/ce031811.htm
 
In order to protect the inflation/money printing rack done by the government and federal reserve racketeers you have to create a government backed monopoly on issuing currency.
 
So no man like Bernard Nothaus (age 67) will be allowed to produce silver coins to compete with the fake fiat money of the federal reserve.
 
The Justice Dept says this in this article: "Article I, section 8, clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof"
 
Correct, you cannot make a silver coin of 1 oz silver and another of 1/2oz silver and call them both a dollar.  A system of standards of amount and quality are required. Further, it gives the Congress the power to coin, not the "sole" power to coin.  Meaning it can coin the currency as well as others.  In fact, there were many mints in early America after the Constitution and the founding of our country, further we used Spanish silver (pieces of eight) as currency throughout the early history of our country, as well as a host of private bank notes...geez so what is this man's crime? The crime is symbolism - challenging our corrupt overloards, and symbolism is everything to tyrannical rulers.
 
Then the justice dept goes on to state this : "Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money which is not issued under its own authority in order to protect and preserve the constitutional currency for the benefit of all citizens of the nation." 
 
This is pure 100% bullcrap of the stinkiest degree, nowhere in the Constitution can you find this statement or any hit of this statement.  Congress was suppose to set/fix a series of standards of how much gold or silver a dollar would be worth, and the ability to produce those coins (not print fiat paper money which is a whole other issue), and not to prevent others from producing silver or gold.
 
In simple terms this is tyranny!  Plain and simple, it is if we are under Hugo Chavez or some other nut.  Of course the government and federal reserve does not want anyone to produce real money to compete with their fake garbage, because their fake garbage will lose out when the real value of the currency is in doubt.  So you have to bring in tyranny to force the citizens to use the government's corrupt money.
 
Imagine living say 30 years ago, hearing of how a Russian citizen rejected the corrupt communist collectivist regime of the soviet union.  They would be taken off to a Gulag (work camp/death camp) and maybe never heard of again.  Most people would feel enraged by the corrupt act of the soviet union, taking people who want their freedom and disagree politically with the corrupt soviet government away and jailed or worse.
 
So now 30 years later, not in the soviet union, but here in the US, a man, an old 67 year old man, does not agree politically with the corrupt government of the US, does not believe that the Federal Reserve notes are real money nor that they are Constitutional money, and goes out and follows the Constitution issuing silver coins as real money, as the Constitution states it should be for this country.  And, he is taken away, to be cast in a gulag here in the US.  What is the crime? he wants freedom from the corrupt federal money laundering/debasing/ponzi scheme and to follow the intent of the Constitution.  Here in America, not the soviet union, here in America.
 
Again, what is the crime?  He was not using fake silver, or trying to defraud anyone, he was a person who believes strongly in the Constitution and disagrees with our corrupt federal government.  He wanted to restore real dollars based on real money, not fake pieces of paper.
 
How dare he defy the corrupt overlords!  How dare he introduce real money to compete against the fake federal reserve notes!  How dare he!
 
Welcome to Orwell's 1984.

 

Sat, 03/19/2011 - 23:08 | 1077548 chopper read
chopper read's picture

great post.  i agree. 

Sat, 03/19/2011 - 18:24 | 1076818 rsnoble
rsnoble's picture

I gots my food storage.  Since some asshead banker convinced me to not buy gold years ago now i've gone and bought things like cases upon cases of whisky.  I've been going on a buying trip almost everyday for a month now.

Sat, 03/19/2011 - 18:41 | 1076876 dark pools of soros
dark pools of soros's picture

you went to a bank to buy gold???   do you go to a church to buy whiskey ?

Sat, 03/19/2011 - 18:37 | 1076863 brxn
brxn's picture

We have already had a couple years of this, so what will make it stop? Will the bond markets really force any change from the US Government if many/most other countries are just as badly-behaved (or worse)?

I am curious, what do you guys think might prompt real action?

Sat, 03/19/2011 - 18:44 | 1076882 dark pools of soros
dark pools of soros's picture

you are seeing it - they won, the Gangofthieves7 will work together for the banker interests

 

if you coordinated everybody to stop paying their mortgage, they'll change the rules so the TBTF keeps on rolling..   look at how much yen was printed in a week?  is any of this real anymore??

Sat, 03/19/2011 - 18:47 | 1076901 10kby2k
10kby2k's picture

I thought 2008 was the 'real deal'.  Its going to take war, bloodshed or a total stock market collapse. Words mean little.

Sat, 03/19/2011 - 18:57 | 1076935 Vint Slugs
Vint Slugs's picture

It's probably a cliche to post it, but here's von Mises on how it will stop:  "There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

As to the what  of it, imo, some unforeseen precipitating event will come out of the woodwork.  Maybe it's an earthquake, an obscure bank failure or a butterfly flapping its wings halfway around the world.  But once the chain of events gets rolling it will spiral out of control till fiat gets dumpted.

Sat, 03/19/2011 - 18:43 | 1076889 sudzee
sudzee's picture

Any word yet on Utah Governor signing bill HB317. He may not sign  as he may be considered a terrorist by the FED and FBI.

Sat, 03/19/2011 - 18:48 | 1076896 dark pools of soros
dark pools of soros's picture

its Utah..  the crazy attic state..   MSM doesn't post any news from there

Sat, 03/19/2011 - 18:48 | 1076898 Waterfallsparkles
Waterfallsparkles's picture

How many of us benefited from inflation and money printing.  I would say all of us.  At least those with assets.

I know I have.  I own rental Real Estate.  I have paid off most of that Real Estate with inflationary dollars.  I bought maybe 25 years ago.  My Mortgages are very little in todays dollars. Yet, I collect rents based on today's value of rent.  This has occured for the last 25 years.  It has helped me to pay off those Mortgages with devalued dollars with inflated rents.

All the while I got to depreciate the properties and take that depreciation off my income.

The bummer is property taxes.  I know that on one property that I paid $70,000. for in 1989, the property taxes are $8,500.  Real Bummer I have to now re buy my property from the State every aprox. 8 years.

But, until the Housing bubble it was working just fine.

Sat, 03/19/2011 - 18:57 | 1076920 10kby2k
10kby2k's picture

Inflation matched by gains in earnings and asset prices is totally managable/acceptable.  The last decade has seen inflation with  no gain in wages or asset values.  A total loser for us 99% ---- huge wage gains for top 1%

Sat, 03/19/2011 - 18:57 | 1076922 Seasmoke
Seasmoke's picture

and if these houses are not your primary , you are going to be double and tripled whacked by property taxes, as you cant vote (unless in same town), kids dont go to school there, etc....they are going to come after those assets and make it very painful for us in the near future ( i know i have 3 houses in NJ and it now has switched on me in the last 12-8 months to become liabilities and now i have to pay attention to always try and stay two steps ahead of the local thieves, my atomic bomb plan is if i must take all equity out of the houses, collect rent for as long as possible and then make the bastards choke on the property)

Sat, 03/19/2011 - 19:06 | 1076960 Waterfallsparkles
Waterfallsparkles's picture

Keep your properties.  It is true that during hard times it can be difficult to find tenants and you have to pay for repairs, etc. But, over time they will reward you and be your comfort in Retirement.

If you have gotten in over your head I would suggest selling some of them but not all.

And always, always fight your tax assessments.  I did successfully get those $8,500. taxes reduced to $4,200. after 3 years.

I also get a wammy from being a landlord as they do not discount the property taxes and can raise them as much as they can.  No homestead credit.  That is why my taxes went up so high.

Sat, 03/19/2011 - 19:08 | 1076977 Seasmoke
Seasmoke's picture

i WAS NOT over my head since 1997, but since they keep throwing water on top of me since 2007 , i am finding that its up to my neck and its still rising ......hoping the property taxes going to the public pigs finally starts to drop , otherwise its game over......

Sat, 03/19/2011 - 19:16 | 1077003 Waterfallsparkles
Waterfallsparkles's picture

Yes, I agree the States went Balistic on Property Taxes when they could and took it all from Landlords to balance their budgets.  But, with the foreclosures and reduced values you can successfully appeal those assessments and get those taxes down.

In Maryland you can appeal your assessment every year.  Most people do not know that.  You have to apply for a reassessment before the 1st of the year. So, if you are in mid assessment cycle check to see if you can appeal for next year.

Just try to hang on and I am sure in a year you will be feeling better about your investments.  Remember Rents are rising and demand is high right now.  So, hang in there any way you can and you will be rewarded.

Sat, 03/19/2011 - 21:32 | 1077334 stephysat28
stephysat28's picture

good luck finding a tenant and paying your property taxes when the

dollar is worth zilch.  The Great Depression left hundreds of thousands

homeless due their  inability to pay property taxes. But you could pay

your taxes in PM's , just and idea.

Let me leave you with this factual worth while reading.

http://www.taxsleuth.com/pages/tax-trends

Sun, 03/20/2011 - 01:13 | 1077868 Timothy
Timothy's picture

You can make the same argument against tenants. Good luck finding a landlord that will let you live there without paying. If the dollar reaches the intrinsic value of its paper content, then homeowners are going default all over the place, and the available pool of tenants is going to increase dramatically.

The real interesting question is what the price of real estate is going to be. Because on one hand prices of virtually everything are going to sky rocket due to inflation, but demand for real estate is going to decrease sharply because nobody could afford the new extremely high interest rates that must inevitably occur.

Sun, 03/20/2011 - 01:51 | 1077975 Matte_Black
Matte_Black's picture

Your analysis is flawed. The price of real estate will remain high while demand remains low and the market will continue to flounder. This will continue until it can't. At that point your tenants will simply not pay. You will file for eviction and it will not be enforced because there won't be anyone to enforce it, unless you personally are ready to do it yourself.

Good luck.

Sat, 03/19/2011 - 21:14 | 1077286 stephysat28
stephysat28's picture

you should have bought gold guns and land. and oh yeah bullets

Sat, 03/19/2011 - 18:54 | 1076924 VyseLegendaire
VyseLegendaire's picture

Cool chart.  WTF is 'hair of the dog' though?

Sat, 03/19/2011 - 18:58 | 1076943 10kby2k
10kby2k's picture

Its a hangover remedy. 

Sat, 03/19/2011 - 19:01 | 1076946 Vint Slugs
Vint Slugs's picture

It's a reference to a hangover remedy - after waking up hung over, drink more alcohol to make you feel better.

Sat, 03/19/2011 - 18:59 | 1076940 Waterfallsparkles
Waterfallsparkles's picture

When I think about it maybe the current inflation situation is not that bad.

If you can invest in the Stock Market, Real Estate, Gold, Silver etc., you are betting that the value of what you invest in will go up.  The only way it can go up is with inflation.  You are basically taking todays dollars and putting them into assets in the hope for inflation.

That way you make out better than the other person that does not have any assets like Stocks, Real Estate, Gold, Silver etc.

So, inflation can be good if you can purchase assests, as you are ahead of the average person and will do well.

Sat, 03/19/2011 - 19:00 | 1076949 10kby2k
10kby2k's picture

What flavor of kool-aid do you drink?

Sat, 03/19/2011 - 19:31 | 1077041 Waterfallsparkles
Waterfallsparkles's picture

When you think about it we all drink the Kool Aid.

How many of us have bought a home and sold it for more and though we were a genius.  We then traded up for a more expensive home.

How many people buy Art, Real Estate, Diamonds, Gold, and other assets in the hope of inflation?

How many of the people on this site have bought Gold because of inflation?  You think that by buying Gold that your purchase will beat inflation but the value of your Gold only goes up by the amount of inflation. You are drinking the Kool Aid of inflation.

You may not think so but if you buy Gold you are drinking the Kool Aid.

Sat, 03/19/2011 - 21:15 | 1077294 SilverBaron
SilverBaron's picture

In the early 70's gold was 35 per ounce, now it is 1400.  Are you saying it didn't beat inflation?

Sat, 03/19/2011 - 21:11 | 1077275 stephysat28
stephysat28's picture

winning

Sat, 03/19/2011 - 19:20 | 1077023 Matte_Black
Matte_Black's picture

"If you can invest in the Stock Market, Real Estate, Gold, Silver etc..."

Unless you are a very wealthy and connected person though, you are a sheep discussing what to have for dinner with wolves.

Sat, 03/19/2011 - 19:45 | 1077087 Waterfallsparkles
Waterfallsparkles's picture

In my opinion, the difference is the people that live below their means and put the excess into assets instead of spending.  I am not talking about wealthy people, I am talking about average people. 

Those are the people that succed in creating wealth. 

You cannot spend everything you make and expect to survive inflation.  It is impossible.

That is the basic flaw in most Americans plan for financial security.

Sat, 03/19/2011 - 20:11 | 1077136 Matte_Black
Matte_Black's picture

You strike me as a very honest and well-intentioned soul. Under what one might call usual circumstances under this fiat regime - and at a different chronological point in the wealth distribution curve - I would agree with everything you said. And, I also benefitted from the R.E. bubble after getting wiped in the .com bubble, but I cashed out in 2005.

Having been spooked by the .com bust, and wary of the sudden paper wealth I suddenly had in my house, I began to read blogs like this one and slowly realized for the first time what was happening.

Since the .com bust (in my own experience, at least) the game has clearly been rigged to benefit those who are wealthy and connected. Honest people like yourself who work hard and try to invest wisely are all too easily crushed in big money squeeze plays that you have no way of knowing about and cannot defend yourself from when they happen.

These days I own my little pad free and clear, hold a small pile of physical pm, and put most of my cash income into 'other' stores of value.

I wish you the very best, and hope you don't get nailed by the banksters, my friend.

Good luck.

Sat, 03/19/2011 - 20:28 | 1077184 Waterfallsparkles
Waterfallsparkles's picture

Good for you, you are on the path for success in life.

I too got caught in the 2000 dot com bubble.  I sold one property and put the money in the market around July 2000. I bought at what I thought was a discount after the first crash.  But, I was wrong and still lost about 95% on most of what was "invested".  Really a shame to sell a property and lose all of the equity built over 10 years and lose it to Wall Street.

It did teach me a lesson.  Keep your money in Real Estate and not the Market.  Although, Wall Street has somehow killed that too lately.  I never though that Wall Street could kill Real Estate but they did.  I am lucky enough that I bought the propertys years ago.

I still have a small account with Wall Street that I trade and have tried to get even as Jim Cramer says but I almost think that is impossible.  If you have money in Wall Street is like having 100 leaches sucking your blood every day trying to kill you so they live.

Yet, the Real Estate has been tried and true for me over the years.  Until recently Wall Street had no power over Real Estate and the values.

Sun, 03/20/2011 - 09:08 | 1078349 ZeroPower
ZeroPower's picture

It did teach me a lesson.  Keep your money in Real Estate and not the Market.

 

This. Agree fully.

However, as for RE and Wall Street - its a double edged sword.

You did enjoy the value of your home 2x in 10 years, didnt you? (You = not necessarily you, but i believe you get the point, as about 20MM Americans drawing HELOCs did)

Sat, 03/19/2011 - 20:32 | 1077189 10kby2k
10kby2k's picture

Good post.  Many are content to lose a few % to inflation for a few years and hope thats all the damage thats done.  Crossing that line to prepare for a currency collapse is a big step and a big risk.  What are your 'other' stores of value?   Pure protection is having 100% physical possession of a wide range of tangible items.  But that creates logistic and security problems.  If you sell an ETF (or other paper) position you receive fiat as payment. How do you resolve this risk?

Sat, 03/19/2011 - 20:39 | 1077210 Waterfallsparkles
Waterfallsparkles's picture

Well if you own Real Estate no one is going to pick it up and walk off with it.  You are protected thru County Land records. 

With Real Estate it does not matter what the currency is or its value as the asset speaks for itself in its abilty to produce income from what ever the currency.

Sun, 03/20/2011 - 00:54 | 1077818 10kby2k
10kby2k's picture

I've got prime ocean front property 140 miles north of Toyko.....with a 10% discount just for you. 4 bars gold/ acre.

Sun, 03/20/2011 - 01:06 | 1077845 Timothy
Timothy's picture

I know you're trying to make a nice point. But that's a terrible analysis.

I invest in stocks for dividends, firstly. Secondly, I invest in real estate for cash flow. Thirdly, I invest in gold and silver for savings, not even long-term speculative gain. (Even though that surely is happening)

Additionally the increases in silver are certainly not just from inflation. There is a super massive short squeeze happening, a growing scarcity of the metal above ground, and an increasing demand for the metal to be used as money. Without hyperinflation, silver is still destined for triple digits.

Inflation is not as significant to me from an investing standpoint. Although it certainly is from a spending position.

Sat, 03/19/2011 - 19:20 | 1077017 proLiberty
proLiberty's picture

I am starting to call 'fiat money' by a more correct name, 'political money', for the meta-environment of running the printing press and clicking the trillion counter with the mouse is far more political than monetary.  Conversely, if it were not for the political pressures, the Fed would never create more air-backed currency.

 

Sat, 03/19/2011 - 19:33 | 1077056 Yen Cross
Yen Cross's picture

That curve divergence makes me SICK!

Sat, 03/19/2011 - 19:38 | 1077074 Sudden Debt
Sudden Debt's picture

We'll if you're going to get all charty about this, it's pretty clear to me we'll have at least 2 to 3 more years untill the final big crash.

Let's just enjoy it.

Sat, 03/19/2011 - 21:27 | 1077329 Yen Cross
Yen Cross's picture

No way! I'm going to step up. No polyethelene dino is going to dictate my decisions.

Sat, 03/19/2011 - 19:51 | 1077109 AhhhItBurns
AhhhItBurns's picture

I'd add the increased cost of a college education and corresponding stagnation of wages and general lack of jobs. Fuck, I remember when you could work through college. Now, you can barely work through college just to pay rent and buy food of rising cost (You think many students will have the wherewithal to investigate the true reason behind this??) if you do not have an ample trust fund set up in your name. But, hey, the government will just distort the market with their loans until the cost of college far exceeds the benefits. Look at some of these places now. Many state schools look like a combination of an amusement park and a wannabe ivy league campus. Everything that would be offered in town by small business is now offered on campus. Combine that with fucking joke degrees (I am looking at you PoliSci, Communications et al) and you have a generation set up to be railroaded into submission in order to pay back their loans. But dammit, if someone fucks up the release of the next iDevice, there will be hell to pay. People will fire up twitter and bitch up a twitter storm.

 

I'd hate to be someone graduating right about now. The prospects are straight shit. Even if you do GTFO of this country, you are still taxed and you will have your student loans + penalties if you ever decide to return. I'm going to go crack a bottle of Jack and settle down now...

Sun, 03/20/2011 - 08:14 | 1078244 Waterfallsparkles
Waterfallsparkles's picture

Ahhh,

I understand your points but I think that too many people rely on the "system" to take care of them.  By getting a College education so you can get a "job" to earn a living is buying into the whole system itself.  You are relying on the big Corporations to take care of you for the rest of your life because you spend money for College.

Sometimes you have to look outside of the box.  No one stops you from making a living because there are no jobs.  I have been self employed almost all of my life and although I did not want my Children to follow in my foot steps they also became self employed.  I and my Children have made better than average livings.  It is because of the ups and downs in income when self employed that teaches you to live below your means as a form of survival.

My Daughter decided to close her business and went to work for someone else and hated it.  She complained so much my Son hired her in his business.  That is the way family works.  My Cousins that did not go to College opened a flower business.  They bought flowers Wholesale and sold them on street corners.  It became very profitable and they started to hire others to man the corners and would drop off flowers and pick them up every day.  They also went into selling produce on corners.  They would go to the local farmers and pick up produce wholesale and sell it on the corners.  They made enough money to buy at least 2 Commercial propertys and of course their own homes.  All from selling flowers on street corners.

Just think about how many sucessful landscaping business's started out with one lawnmower.  How many people with a chain saw became successful cutting peoples trees down and then selling firewood.  What about movers.  Probably stared out with 2 guys and a truck.  How many people have made a living on Ebay.  Going to estate sales and then reselling the goods.  Just look how many people are now making a living on Youtube as a partner posting their videos.

But, if you want to be a pencil pusher with a Big Corporation for $50,000. a year, then there may not be any jobs.

Just think outside the box and you just may become very rich and not need to rely on the "system"

Sun, 03/20/2011 - 09:13 | 1078355 ZeroPower
ZeroPower's picture

Very nice waterfall.

Its my belief soon the only 'pencil pushers' as you put it that are worth it are the ones making the millions - all to pay the lower level 100hr/wk drones next to nothing.

 

Sun, 03/20/2011 - 13:27 | 1078448 Waterfallsparkles
Waterfallsparkles's picture

The pencil pushers will not be the ones making the Millions.  The ones making the Millions are the "self employed Owners", or the founders of the Big Companies.

Just look at Kentucky Fried Chichen (one Self Employed man), Mc Donald's (one Self Employed man), Home Depot, Aapl, Microsoft, Google, etc.

Just look at the empire created by Got Junk.  I am sure he started out with one truck and picked up peoples unwanted items.

Sat, 03/19/2011 - 21:43 | 1077361 Yen Cross
Yen Cross's picture

Write a book Brotha! I feel for ya.

Sat, 03/19/2011 - 22:01 | 1077421 gwar5
gwar5's picture

I'd like to quibble with the "zero" personal savings rate in the USA.....

While that's been perfectly true... it's because the people's 15% forced savings through "social security" for their old age has been spent by the government. There is no lock box, there is no savings, it is a fraud.

Since the financial meltdown of 2008 the US savings rate has risen to 5% as people hunker down.... but The Bernank has seen to it that shall also be stolen through QE and debasement of the currency.

The Chinese have a savings rate of 30% because they don't have social security system and feel the urgent need to save for their own security. Their government also now wisely tells them to save gold to protect themselves against inflation.

 

 

Sun, 03/20/2011 - 00:41 | 1077780 RockyRacoon
RockyRacoon's picture

You can rest assured that my "savings" are not counted in that tally.  It's a certainty that some "savings" are finding their way into tangibles and PMs, not the traditional ways that can be measured by the gov't propeller-heads.

Sun, 03/20/2011 - 01:30 | 1077921 Double down
Double down's picture

Foregone consumption requires a vessel.  It is that that really is at stake. 

Sun, 03/20/2011 - 03:18 | 1078085 Xkwisetly Paneful
Xkwisetly Paneful's picture

Seriously how many of you are direct descendants of Joe Granville?

 

This systemic collapse was supposed to happen in the early 70's, then the early 80's, then the early 90's, then the early 00's,

WOW is must be the early 10's or something.

Sun, 03/20/2011 - 09:14 | 1078360 Richard Head
Richard Head's picture

Did you sign up 5 weeks ago just to post your douchiness?

Sun, 03/20/2011 - 23:26 | 1080519 huckman
huckman's picture

Taxe revenues from the oil & gas industry since 1980 outgrossed oil company profits by $500 billion.
GDP would probably be 7% and unemployment halved by now had we used the stimulous towards our domestic oil & gas industies and reved up permitting.  Can't the libs just find out some way for them to get the credit for a fossil fuel energy job boom?

Mon, 03/21/2011 - 07:19 | 1081021 4ndy
4ndy's picture

I sincerely doubt the Keynes would call whats happening a Keynesianism. More like sheer incompetence. If its called Keynesianism, has few limited signs of Keynesianism, it doesn't mean it's Keynesianism

 

Taxes were unprecedentaly low all time so argument fail.

 

 

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