The Coming Economic Collapse Revisited

Phoenix Capital Research's picture

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
pama's picture

I believe any one of the sons of bitches. Just sayin that some how some way, trust has to be re-invented.
payday loans

pama's picture

As stated above, my ears were bleeding. If you read it backwards your ass will bleed.
loans for people with bad credit

hama's picture

The first thing in the morning ZH read makes me wonder? Is the confidence and faith in the Government and Media so destroyed that it can not be rebuilt? Not to say that I believe any one of the sons of bitches. Just sayin that some how some way, trust has to be re-invented.
florida home insurance

hama's picture

This level of inflation will make it difficult for people to properly value the products they buy relative to the products value in silver.. A value buying guide might be a useful tool going forward.
premium wp themes

hama's picture

compound annual inflation rate, the appropriate term to measure this year over year inflation measurement? This level of inflation will make it difficult for people to properly value the products they buy relative to the products value in silver.. A value buying guide might be a useful tool going forward.
cheapest car insurance

hama's picture

we are specialized in handing nike shoes and wishes to enter into business relations with you.Our company has been in this line of business for many years and enjoys high?international prestige.
car loans

locinvestor's picture

Once again, an "expert" is missing a key point.

Why wil this continue unchecked? Because not all but many people don't take the time to research and find out what's really going on. They can run down a long list of excuses. I have to protect my family, my home, my job. I have to think short and long-term. All valid points.

Now, what made millions protest and not back down to stop the Vietnam War? The fact that they either knew someone being drafted OR they were going to be drafted. Then, in their mind it finally hit them personally. One "Great Turning Point".

Look at everything that's happening. We're in two wars and now possibly a third. A bankrupt country's President says "we will do anything necessary to protect the United States". How is Libya a threat to our security? We have to get as much oil as possible before the Russians or Chinese do. Which means that Gaddafi is more dangerous than Mubarack was. How do you define that? Who's more effective in torturing people?

The only way to stop all this stuff is a mass continuous non-violent protest. So my investment advice? Save your money and don't buy this guy's investment guide. Instead, think creatively and make yourself heard.

cranky-old-geezer's picture

The seeds of today’s crisis were first sown in 1971 when the US formally opened up trade with China.

I stopped reading after this blatantly false statement.

Right year, wrong event.  Coming off the gold standard is the root of today's crisis.

max2205's picture

Well nice advise but admitting you missed a 100% index rally and 500% on most stocks is pretty brave but well I don't know why you reminded us that you wrote that then and state it still applies now. I'll check back after the next S&P double to 2,600. BTFD !! Ben won't ever let the market correct more than 5-10%. EVER

cranky-old-geezer's picture

Nor will there be his "economic collapse".  Inflation isn't collapse.   It's slow deterioration, slowly pushing people into poverty, not dumping them into poverty all at once.

Yes I can foresee S&P 2600 and well beyond, Dow 35,000 and well beyond, but not because the economy is impoving, rather because the Fed is running the presses high speed, inflating the money supply out to infinity. 

Screw their M2 numbers, people know there's tens of trillions more dollars floating around out there not included in M2, it's just as bogus as all the other stats put out by the government and Fed.

We'll see QE 9, QE 19, QE 29, and keep right on going till the dollar is worthless, but that steady S&P rise will make a lot of folks rich in nominal terms ...or think they're rich.


geno-econ's picture

The point is in order to further US exports industry needs help from gov, in form of ;

Temporary subsidization of new technology

Temporary duties to protect infant industries

USTR negotiations to open overseas markets

Protect national security industries from overseas competition-ex. military boots and arms Do we want to rely on China for either?.

Financing for large overseas projects

Use of stringent anti-trust, dumping cv duties and 301  provisions against violators

Adherance of labor laws, counterfieting, private property, intellectual property, human rights etc. 

If US domestic regulatory enforcement of Wall St and bank sector is any example , there is a lot more we can do overseas if we get rid of law firms and lobbyists reresenting foriegn interests and governments.


geno-econ's picture

Good suggestions for scaling down ,doing with less and making small local businesses viable. More important question is will it be more efficient in  mass production/distribution economy and will it result in more exports---most effective way to pay off huge deficits

topcallingtroll's picture

There are bound to be great investments as we americans have to adjust to the reality of being poorer.

Streetcarts manufacturing as more cities allow street food, bottomfishing at storage locker auctions, pawn shops, microfinance and factoring for immigrant shops and storefronts, building a flea market and renting booths, gun ranges, security.........there are business opportunities everywhere if people have an entepreneurial eye.

dizzyfingers's picture

Okay, but please include the greens of the 70s who wanted "clean air" and "clean water" above all other things. When gov realized it could tax and/or regulate whole industries to death, that was the end of heavy industries in the US that supported many families for over a hundred years.

According to the greens, we still don't have clean air (have they checked the air quality anywhere else, I wonder, such as in China near Shanhai and Beijing?) or water (though the drinking water in the US beats most places) but once again profit can be made and power achieved by scaring people to death.

Eventually US citizens will have to get licenses to have children because people are so easily convinced that everything is far worse than it really is. Assert your rights to freedom, or freedom will be all gone. 

topcallingtroll's picture

The river running near pittsburgh doesnt catch on fire anymore. I would say we have made good progress on pollution but still have a long ways to go.

Sabremesh's picture

I first published this essay in the Summer of 2009. At that time the whole world believed Obama’s Stimulus Program was working...

What? I certainly didn't. Who is this smug twat?

geno-econ's picture

Great review by GS and TCS in pointing out genesis of long term fallacy in

socalled "global economic model" . Interesting how when an idiology , religion or economic model is established for the masses it is almost impossible to change as long as it benefits those in control. Question is  where all this will end and if any individual survival preperation can avoid nasty end result .  I was particularly impressed with discussion of Japanese model which was essentially a "national planning "endevour by MITI--Ministry of International Trade and Industry" to grow the Japanese economy after the war. Obviosly they were extremely successful.  Perhaps America now needs a MITI type national planning component, or have we lost our national identity and are frozen in a religious fervor  of an idiology called "global economy"

deepsouthdoug's picture

The Supreme Court doesn't pass laws - it rules.  Nixon didn't visit China until 1972 so trade agreements were passed after that.  Your claim of 1971 is wrong.  Try and get your facts right before you post them the next time.

Kayman's picture

A "corporation" from its  conceptual beginnings (the English and the Dutch, I believe) was always a legal "fiction".

Deemed to have all the attributes of a person, except that it could not breath. However, it was granted neverending life, if so chosen.

Now our Supremes have indeed "passed" a law, by granting the corporate Zombies the same legal rights as you and me.

So... I respectfully beg to differ.'s picture

The American economy will continue remaining a giant ponzi scheme until the failed banks are forced to liquidate. Otherwise, these failed banks will continue their practices of capital dislocation and bubble forming, at any cost (to us, the taxpayers).

There is way to organize, and hold the banksters accountable. The grass roots efforts already taking hold. At we organize a class action against the banks, the ratings agencies and other financial institutions involved in staging the colossal securitization fraud and subsequently crashing the economy and resulting in over $5 Trillion in asset losses in the US alone.Wall Street monopolistic, essentially rogue financial entities have destroyed the fabric of our society and broke our laws, making a mockery of fiscal prudence, ethics and justice. Even our very government is controlled and manipulated (by being an interdependent collosal trap) by this highly illegal banctel, where bank executive officers "retire" or transition into various government regulatory and controllership positions, futher aiding and abetting the ongoing fraud. And when the overleverages casino style betting and back-hedging finally tipples over and out of control, the losses are effectively socialized, while the injured parties are thrown out on the street.
By having repealed the essential laws and regulations beforehand banks had stepped up the level of their offense to premeditated obstruction of justice and outright conspiracy to wire fraud. Citibank - Travelers “merger” and “Glass-Steagall shattering” alone had cost us the taxpayers $2-3 Trillions in real asset losses. Hedging, backroom betting, trading fraudulently rated derivatives, all to be eventually back-stopped by the Nation’s books, while remaining off their own is an affront to feducuary trust, a mockery of fiscal prudence and ethics. 
WE THE PEOPLE will hold the banksters legally liable. 

GoingLoonie's picture

"Put another way, the last time the US economy fell this hard this fast, we were intentionally shutting down the monster than was the US war machine in WWII."

The war machine is just another jobs program, much of which has been privatized and stands ready to make sure that the middle class does not questions it's new status as the serf class.  True recovery will begin when: 1.  The banks sucking intermediation dollars is stopped; and 2. The massive war machine private and public is disassembled.  

The inside the beltway jargon du jour is, "The war in Iraq is being shifted to the Department of State as we finish our nation building."  We are actually bringing thousands of Iraqi "police" to the US and "embedding" them with our own police departments so they can learn how to operate.  Or, is that how we operate?  Depends on what outcome you want.  I would call it treason, with massive potential for terrorism.  

Kayman's picture

Going Loonie

1. I would like to amend your first point. WHEN THE BANKS BECOME BANKS.

Intermediation between savers and borrowers is what banking is.

Churning and skimming is a bastardization of banking.

Conning people into "the market" is how our contemporary banksters pick your pocket clean.

falak pema's picture

They'll be piloting the drones from outsourced far distance flying and surveilling over Coney Island as per WB7's panoramic, masterly portrayal. Terrorist threat from aliens? Or spec-ops subcontracted outside job?

savagegoose's picture

here's a tip

stick to 1 font

flapdoodle's picture

I agree that a mere 25% drop in standard of living is manageable, but the problem is averages - a few will drop 25%, but my sense is that most will drop more, while some won't drop at all or even improve their standard of living, e.g. US Gov't employees and banksters...

Economic stratification in the US is advancing rapidly - goodbye middle class...

LeBalance's picture

Let's examine the introduction:

"I first published this essay in the Summer of 2009. At that time the whole world believed Obama’s Stimulus Program was working at that the stupid greenshoot recovery was underway. Today I’d like to reprint this essay because the same structural issues that plagued the US in 2009 are still valid and because this piece proved, two years ahead of time, that the US would suffer a massive economic collapse."


So Graham (aka I) was the "only person" in the "whole world" to see that the recovery was a fraud.  That is what is stated here.  Ostensibly that is why the reader should pay attention to Shepherd Graham, because he knows his shit and no one else in the "whole world" does.

Well Graham's words certainly are confusing, because the "whole world" was not in the "we have recovery: screw real estate tanking, employment nonexistent, debt albatross, etc boat."

So even if Graham was a person who saw this, there are others and maybe (just maybe) those others are worth reading as well.  Maybe, they are worth reading even more than Graham, because they do not have such an inflationista ego?

Confused's picture

Being a bit harsh no? We both know, "the whole world" is being used with some poetic license. Similar to the way TD says it. 

Bobportlandor's picture

Do authors who post theses articles do the math questions?

Dollar Bill = .0043" thick as far as I can tell
1 Million = 4.3" ( 1000 x $1000 )
1 Billion = 4300" = 358.33 feet ( 358 feet in circumference, the Cyclorama is the largest painting in the country.

1 Trillion = 4,300,000" = 358,333.33' feet = 67.866 Miles

3T  = 204  miles ( Distance to space station )
15T = 1018 miles
25T = 1696 miles ( Mukwonago Wisconsin to Portland Oregon

45T = 3054 miles ( coast to coast )
50T = 3393 miles
75T = 5090 miles ( Prague to Charleston )

75T / 300 million = $250,000 each to be paid over 40 years = $6,250 per year @ 0% interest. Good luck all.

JW n FL's picture
by Bobportlandor
on Sat, 03/05/2011 - 01:19


Do authors who post theses articles do the math questions?


Bob!!!! Great!! Job!!!

when the broader populace wakes the fuck up, I may have a job for you.. it is now held by "The Ber-Nake"..

Just make sure the numbers add up, 1 + 1 just like you did here and all will be well.

Hang in there Bob, we are getting there.. slowly but surely.

Kayman's picture

Math is cold comfort without foundation.

75 Trillion/300 million ( I assume you meant the population of the U.S.) ?

In reality the debt must be paid by taxation of the existing GDP or growth in GDP, or both.

Either way the numbers are MATHEMATICALLY impossible to carry the debt burden. Even a modest 3% interest on $75 Trillion means taxes for interest alone of $2.25 Trillion in an economy of $14 Trillion.

Ergo, the Bernank has to keep printing until the casino burns to the ground.

The alternative is a shiny new leader, untainted and untaintable, steps up and tells the American people the truth. There is no free lunch. And, yes, working for a living is an honourable calling.

sharkbait's picture


Ergo, the Bernank has to keep printing until the casino burns to the ground.....


Precisely and exactly correct.  This simple fact seems to get lost in all the falderol.  

The mystery is is it a controlled burn or an explosion?  Still not clear to me.

malikai's picture

I did the math too and found it subaccurate. I'm glad I'm not the only nitpicker in the bunch. :)

three chord sloth's picture

The seeds of today’s crisis were first sown in 1971 when the US formally opened up trade with China.

No, they weren't. They were planted earlier than that. They were planted in the 50's and 60's, when the Western world allowed Japan to forge a new development paradigm that came to be known as the Asian Model. That model is built around a handful of sub rosa subsidies to the business sector from the workers/comsumers, including things like cheap currency, low interest rates, suppressed wages/consumption, and import barriers (sometimes by overt policy, sometimes informally).

Whole sectors of American industry were already shadows of themselves long before China entered the scene (and even before the usual boogieman Reagan took office); for instance textiles and clothing, steel, and even non-computer consumer electronics were already back on their heels by the beginning of the 1980's.

The US government began bartering away our blue collar industries back in the 1950's; trading away US workers' jobs in order to help speed post-WWII redevelopment, first in Europe and then Japan, in part to help those left devastated by the war, in part to cement friendships old and new, and in part to help those nations fight off internal communist elements by quickening job growth. The fact that manufacturing employment reached its peak back in 1953 at 33% of US workers illustrates this.

One of the major roots of the problem was the decision to allow Japan to get away with its beggar-thy-neighbor model of development built on international wage arbitrage, currency manipulation, and product dumping. This set the stage for China to follow that same path decades later. The credit explosion since the 70's was just a reaction to that first decision; the-powers-that-be had too much invested (reputation wise) in the earlier decision to re-open that issue when its ill effects became apparent, so they took the path of least resistance -- cut loose the old industrial base and shoved us into the new finance/services/retail based economy. And quite frankly, they much prefer the US-as-office-park model... it is their bailiwick after all. Just like Schumpeter said they would way back in the 40's.


Kayman's picture

3 Toe

Graham still has a point, because at least Japan and Germany were forced to invest in North American factories.

And Japan quickly learned quality, and Germany always understood quality.

In return for the short term thrill of purchasing Chinese consumer junk at Chinese Wallmart, we, as a nation are saddled with a $Trillion of LONG TERM DEBT.

The thrill is gone...

snowball777's picture

At least we still have our nuclear arsenal, naval fleet, and air superiority to show for it, right?

zaknick's picture

Magnificent summary.

You probably won't read this comment but I sure wish you'd address future developments as you see them.

One other thing. These alliances with overseas cliques, you don't address the morality of these national destinies- subverting which typically had a dark C!A drug trafficking funded side to them. Most of these alliances were not wealth generating for the majority of those countries citizens but were, in fact, detrimental to the healthy development of their economies just like the US.

There is a whole socio-economic/class warfare aspect to this crony capitalism that is part and parcel of these policies.

Looking forward to more of your comments.

three chord sloth's picture

Thanks zaknick.

You're right about the whole "detrimental to the healthy development" thing, but good luck getting the world's elites to admit it. I have a sinking feeling that they really think they are doing a bang-up job of engineering the world, and see the "masses" as ungrateful wretches.

falak pema's picture


  1. Dead on TCS. They invented the outsourcing model creating the young, new giants of SE Asia. Japan's modeling hotted up regionally after Nixon's clever, selfish, 'tricky dicky' play of gutting Bretton Woods. This guy Lee Kwan Yu of Singapore is the iconic model of that 'baby SE Asia boom'. He made his island alike HK into the new capitalistic 'el dorado'. Far thinking guy. He even advised Deng Tsiao Peng to get out of Maoist China model. Make it the block buster it is today. He's the man who sold the Japanese idea to China, after having planted the seed in Singapore. There you go Brave new world. USA now has to recoup and build its new paradigm on home ground : Economy (competitive advantage in regional cum global markets+ Ecology (resource constrained local incentive and eco friendly options)+ Social (job creation + cultural education to stay first tier in world). It's all there. Just reach for it. The developed world now needs a low growth, qualitative change which looks after people and the planet. The 'empty, new, unlimited resources continent' world leadership model is over. Welcome to an overpopulated, global, multipolar world.


RockyRacoon's picture

There was a time when "Made in Japan" meant it was crap.  And it was.   Not so much any more.   "Made in the USA" could become the same denigration.

reader2010's picture

The saddest part is that even Made-in-the-USA products have at least 50% of the parts stamped with Made in China. Marc Faber said only beer and positutes are made in the USA nowadays. 

Iam_Silverman's picture

"The saddest part is that even Made-in-the-USA products have at least 50% of the parts stamped with Made in China."

Wrong.  None of my ASE's have any mention of Chinese influence!

johnQpublic's picture

cant find a prostitute ETF....why?

Cpl Hicks's picture

Try the pink sheets or maybe under-the-counter...?

BigDuke6's picture

The usa has a problem when apple exports 1.9 billion $ worth of iphones from china to the usa every year.

all the innovation in the world won't save you when multinationals are shafting the bottom line like that.

pitz's picture

Yup.  Time to take all the bankers and real estate barons, and shoot them.  Put the engineering talent that has been mostly unemployed/underemployed for the past decade into the places formerly occupied by the bankers/real estate people.  Voila, massive economic growth.

lynnybee's picture

Approximately 2 years ago I heard DAVID TICE on BLOOMBERG.    He said , "in the future the words 'mutual funds' will be a dirty word. "     


Kayman's picture

Hi Lynnybee

Mutual funds and return on investment are Mutually Exclusive. The game is skimming the mark.

Iam_Silverman's picture

"in the future the words 'mutual funds' will be a dirty word. "

Or, mutually exclusive!

bigelkhorn's picture

I listen to the FFT guys over at they called the US collapse years ago...the  stockmarket crash back in 08 and this middle east crisis. Well worth having a look at. They also have a controversial ebook coming out next week called U.S. SECRET HIDDEN TREASURE MAP! looks intresting