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Will Austerity Be The Catalyst For War?

Tyler Durden's picture


As always SocGen's Dylan Grice comes out with some tremendous insights in his latest weekly piece "Double dips, siren calls and inflationary bias of policy." While the gist of the piece is presenting a comprehensive overview of the traditional and cognitive biases toward inflationary policies and away from hard, unpopular, deflationary/austere measures, Dylan provides a chilling anecdote involving the 1980s conflict between the UK and Argentina, in which it was precisely war that pulled an extremely unpopular government, that of Maggie Thatcher, out of the gutter of public opinion, and soaring in popularity. Thatcher, who came to power oddly enough on a "mandate to smash inflation, smash the unions and downsize government", saw her popularity immediately slide to 25% (see chart) as people realized the very real pain associated with austerity and a regime fighting run away government. A tangent in Grice's argument is that on very rare occasions, the people of a country do end up making the decision to take on hardship, instead of kicking the can down the road (are you listening Summers?). Yet they promptly grow to regret their decision. So what was it that saved the government, and allowed the Conservatives a second term in which to complete the painful austerity project? The declaration of war by Argentina's General Galtieri over the Falkland Islands. The result was soaring popularity for the Iron Lady, and the rest is history. Looking forward, now that all of Europe is gripped in austerity, and make no mistake - this very same austerity is coming to the US on very short notice (sorry Krugman), and popularity ratings for all political parties are crashing, has the political G-8/20 elite been focused a little too much on the Falkland war? Is war precisely the diversion that Europe and soon America hope to use in order to deflect anger from policies such as Schwarzenegger's imposition of minimum wage salaries yesterday (yes, this is pure austerity)? And is there a Gallup or some other polling "unpopularity" threshold that the G-20 is waiting for before letting all those aircraft carriers parked next to the Persian Guld loose? Read the below excerpt from Dylan and make up your own minds.

From SocGen's Dylan Grice

How about the UK in the 1980s though? Wasn't Thatcher elected in 1979 on the back of a promise to bring down inflation, smash the trade unions and downsize government? In other words, wasn't Thatcher elected with a mandate for deflation, which demonstrates that sometimes electorates do elect governments to take tough decisions?

Strictly speaking, the UK in the early 1980s doesn't belong in the same category as Canada, Sweden and Finland in the early 1990s. It had lurched between crises in the 1970s the way an all-day drunk lurches between lampposts: inflation peaked at 25% in 1975; the IMF were called in 1976; the bleak "winter of discontent" of 1978/79 saw widespread power cuts and widespread strike actions by, for example, rail engine drivers, lorry drivers and ambulance drivers.

More infamously, rubbish piled up in Leicester Square after Westminster Council allocated rubbish to be dumped there when refuse collectors went on strike, and coffins piled up in Liverpool after gravediggers went on strike. When asked what the council would do should the gravedigger strike continue Liverpool's Medical Officer said the decomposing bodies would probably have to be thrown in the sea! The gravediggers soon got what they asked for and the strike only lasted two weeks.

So when in 1979 the UK electorate voted in Thatcher on a ticket of painful deflation, the crises caused by a weak and out-of-control-government weren't simply abstract, as they are to most of us today. They were real, and it was in the midst of this chaos that Thatcher came to power.

However, despite winning a clear mandate to smash inflation, smash the unions and downsize government, her immediate reward for carrying out her election pledges was to be marked as the most unpopular prime minister in British political history and by early 1982 her approval rating had slumped to 25%. Despite having voted for Thatcher’s painful medicine and having even understood the need for it, UK voters in the “hot” state people inevitably feel when unemployment spikes had less tolerance for the bitter medicine than they thought they would have in the distantly “cold” state of May 1979.

Squealing with pain and begging for it to stop (364 economists - including former and future Nobel Prize winners - signed an open letter decrying Thatcher's plan to raise taxes in the depths of the 1981 recession to cut borrowing as having no basis in economic theory). Thatcher's chances of a second term to complete her project looked doomed...?

But Britain wasn't the only divided nation in need of social healing at that time. On the other side of the world the widely-hated Argentinian military dictatorship of General Leopoldo Galtieri was experiencing severe economic crisis and widespread social unrest of his own. And to deflect from his domestic problems he did what pressed tyrants have done since the beginning of time - he picked a fight with a foreigner he felt sure he could beat.

Located in the South Atlantic only 300 miles from Argentine shores but 8,000 miles from Britain, the tiny Falkland Islands has been a territory of the UK since it was appropriated from the Argentines in 1833 for its strategic value in navigating Cape Horn. Since this had rankled with generations of Argentinians (as it still does today), Galtieri calculated that an invasion would deflect from his disastrous domestic policies. He also calculated that the UK would balk at the military response required to defend the Islands. The Brits would be vastly outnumbered with implausibly long supply lines and, anyway, the islands were mainly inhabited be sheep.

And America was his new best friend too. Hadn't Reagan just warmly received him as a bulwark against communism in Latin America? Hadn't the administration's National Security Advisor just called him the "majestic general"? Convinced that even if Thatcher wanted to retaliate, she'd be talked out of it by the Reagan administration, he launched a surprise invasion on 2 April 1982. And that morning, Galtieri must have felt pretty pleased with himself. And that morning, Galtieri must have felt pretty pleased with himself. Upon hearing the news, enthralled crowds of patriotic Argentines momentarily forgot the death squads, the 9,000 to 30,000 disappeared "subversives", the daily grind of high unemployment and 130% inflation, and instead gathered outside Galtieri's balcony in a carnival-like atmosphere to celebrate and show their approval of the invasion. His plan was working like a dream.

But the tribal instinct is a part of the human condition, not only the Argentinean one, and the British public were equally thoroughly gripped by the same fervent collective delusion that we call 'national pride.' Galtieri had miscalculated. Thatcher did respond militarily. The British army - though outnumbered - were better trained and equipped than their foe, whom  they dispatched within two months. In the national delirium of that rare episode in the terminal decline of what had once the world's largest empire - a national victory - Thatcher's approval rating, like that of her previously despised party, soared (see chart below). An election was called, duly won by the Conservatives, and the painful austerity project was completed in a second term. The rest, as they say, is history.

Thatcher has gone down as the iron lady who turned Britain around and transformed its fortunes. But how different would the story have been had it not been for the "majestic general?" The Thatcher experience shows how fragile support for painful economic policies can be even when the democratic mandate for those polices has been won.

Like the Canadian and Scandinavian austerity experience in the 1990s, the painful programs adopted succeeded as much by luck as by political bravery. And this is what worries me. It's not that I'm ideologically wedded to one side or the other, it's that the precedents just aren't encouraging. The Weberists are right to worry exactly because the Krugmanites are right  that the required austerity will be so deeply painful and politically risky. Policymakers won't make it happen, so the bond market will make it happen instead.


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Fri, 07/02/2010 - 12:46 | 449410 Caviar Emptor
Caviar Emptor's picture

We're officially at "bear-market" conditions, 20% off the peak in the Russell 2000

Fri, 07/02/2010 - 14:15 | 449591 Ragnarok
Ragnarok's picture

Give me $50 on Venezuela.


Oil - Check

Minerals - Check

Axis of Evil - Check

In the US sphere of influence - Check

Call Obama a "house negro" - Check

Douche bag dictator (Venezuela or US?) - Check

Fri, 07/02/2010 - 19:26 | 450187 CPL
CPL's picture

I'll take $40 on the vuvuzela!!!!




Fri, 07/02/2010 - 21:04 | 450301 Der Kommissar
Der Kommissar's picture

$100 on China:

  1. Get rid of 1T in debt -- governments do not pay to enemy states
  2. Destroy manufacturing capacity of a major competitor
Back to 1945!!




Fri, 07/02/2010 - 14:59 | 449713 B9K9
B9K9's picture

Who gives a shit about the markets. I gotta laugh at the market playerz who frequent this site. Sure, TD covers a lot of financial market information, along with certain major geo-political & environmental events. However, the analysis & commentary directed at the underlying fraud, corruption & outright illegal actions is meant to SERVE as a means of illuminating the foundational rot underpinning our entire economic & governance systems, not as  mundane trading & investment advice.

Think for a moment about what that really means. What we see & think we understand about our world is not really the case. Since not one of us has any personal experience in the major social events that have taken place between 1776/1789-1815 and 1914/17/18-1945, we have NO concept of what happens when major institutions we take for granted, and quite frankly, consider inviolable, are nothing more than mirages!

Austerity doesn't mean we're going to knuckle under in order to pay-off phantom principle+interest to a cabal of private interests who never lent real capital in the first place! Doesn't anybody get it? We are going to DEFAULT! We are going to repudiate the debt. It may not be us (our generations), but I can damn well guarantee that the millions of little Johnnies & Janies currently attending 6th grade sure as shit ain't gonna agree to a life-time of debt servitude in order to pay off the national credit card encumbered for the benefit of some random, anonymous "others" when they turn 18 (and can vote) in 6-7 years.

So what happens when the ponzi ends? Sure you wanna find out? Well, we don't have a choice - it's coming whether we like it or not. Think about how you're gonna get out of this situation alive. Think skills, think resources, think community, think security. We're getting very close to the point where the great unwashed are going to find out there really isn't any Oz.

You don't work, you don't contribute, you don't get along, you die.

Fri, 07/02/2010 - 18:47 | 450138 Cathartes Aura
Cathartes Aura's picture

Who gives a shit about the markets. I gotta laugh at the market playerz who frequent this site. Sure, TD covers a lot of financial market information, along with certain major geo-political & environmental events. However, the analysis & commentary directed at the underlying fraud, corruption & outright illegal actions is meant to SERVE as a means of illuminating the foundational rot underpinning our entire economic & governance systems, not as  mundane trading & investment advice.


+1000 B9K9. 

for that paragraph, and the rest of your post, excellent stuffs.

Fri, 07/02/2010 - 19:32 | 450206 dark pools of soros
dark pools of soros's picture

"The worse....the better"

Fri, 07/02/2010 - 19:37 | 450214 scratch_and_sniff
scratch_and_sniff's picture

"You don't work, you don't contribute, you don't get along, you die."


Looks like most of the people here are fucked then.

Fri, 07/02/2010 - 20:20 | 450261 cossack55
cossack55's picture


If you do work, you do contribute, you do get along, you STILL die.  You, sir, are quite right.

Fri, 07/02/2010 - 23:15 | 450413 russki standart
russki standart's picture

Great Post. Now that I am ILLUMINATED, where do I sign up for my  free parcel of slaves?

Sat, 07/03/2010 - 01:01 | 450482 mcguire
mcguire's picture

sorry, but the "truth" that the markets are manipulated is not going to feul any revolutions...

if you want that, work on 9/11 truth.  most people just dont know about it.  i didnt, not until just 3 months ago.  it was the first time i had seen actual footage of wtc7 falling down, but once i did see it, i knew, KNEW, that this was an inside job.  i spent the whole week without sleep, trying to prove it wasnt the case to myself, but the evidence just grew stronger and stronger. 

please, if you have never seen anything on world trade center #7, watch this...

in short, i agree to an extent with what you are saying... but the financial picture is only one part of a much larger, and much darker picture. 

it is my opinion that just as 9/11 had the power to change the world to what it is today, once people see that it was the biggest crime in the century, it has the power to change everything.  the truth behind 9/11 *does have the power to affect revolutionary change... 


Sat, 07/03/2010 - 10:36 | 450663 SMG
SMG's picture

The problem is deniability. The people behind the curtain are very good at covering their tracks, at least most of them.  While there might be some suspicious stuff going on with 9/11, the triangle people always do a good enough job of leaving enough doubt out there to make the everyday person look at you like you're crazy when you bring it up.

The problem is if you focus on the past, there can always be some doubt sown, because really the past can be changed by changing generally accepted opinion.

If you really want to make a difference, help people discover the eyeball triangle overlords using things that exist in the present.

The pyramid and the eye of Horus on the dollar, the tiny owl above the one on the front, the apotheosis of Washington painting in the capital building, the Masons ( at least the high level ones), the federal reserve, the Georgia guidestones, the Bilderberg meetings, the IMF, the UN, the G-8 etc.  Don't go into it too quickly, but very gradually with someone, because it's alot to process and if you overload someone, they just kind of shut down and pretend they never heard the information.

Change will come when the majority of people realize there is unelected royalty working through a corporate structure, to hijack our republic.  That majority will have to be built one citizen at a time.




Sat, 07/03/2010 - 12:11 | 450711 WaterWings
WaterWings's picture

the triangle people

Heh. Nice!

I was explaining to some friends/acquaintances the Gaga-thingy and showed them the explanation. And just like the Matrix and Allegory of the Cave descriptions of slaves lashing out to defend the system I now have some stand-offish, quasi enemies instead of people I can relate to. Sad that they defend it outright. Their worldview is dying. They are "triangle zombies".

I can imagine the website tagline: "Get more frenemies without spending a dime! Send 'em our way and we'll take care of the rest!"

I have more farming books to read and guns to grease anyway.

Sat, 07/03/2010 - 05:51 | 450569 reckoning
reckoning's picture

"will austerity be the catalyst for war?"...


i guess i am a little confused by the question itself... we are in 2 wars at the moment... does the author mean more war?... worse war?... new war?...


if the US government makes a concerted effort to spend, and therefore borrow less, the US federal reserve bank will find a way to force an increase in conflict, borrowing and resultant interest payments to the fed.


<the analysis & commentary directed at the underlying fraud, corruption & outright illegal actions is meant to SERVE as a means of illuminating the foundational rot underpinning our entire economic & governance systems, not as  mundane trading & investment advice.>


use the information as you wish in your daily life, however, it is an excellent observation that the commentary leads one to question our current system of finance and governance, as well as the incestuous relationship between the two...


abolish the US federal reserve bank, pay back every "dollar" of debt owed to the bank with its own useless and pathetic fiat.... then issue a US government note... one free of conjured and fictitious interest payments required at conception for no other reason besides fraud and greed... just as john f kennedy attempted to do... and was killed for...


at that point.... there would be absolutely NO NEED OR INCENTIVE to fight any wars at all... little johnnie and janey would owe nothing at birth, and live a life free of debt servitude...


the only problem remaining at that point would be... where would obama's (or any other politician's) next campaign contributions come from???... there in lies the rub... as long as all those power hungry cheap little whores are for sale at these "cheap" prices... ben's bosses will eventually buy their way back in as the sheeple watch "dancing with the stars"..

Fri, 07/02/2010 - 12:48 | 449416 Mercury
Mercury's picture

Yeah the politicians will get their war.

A civil war.

Fri, 07/02/2010 - 13:15 | 449473 Scooby Dooby Doo
Scooby Dooby Doo's picture

I suggest: 'The War on Credit'™

Fri, 07/02/2010 - 14:05 | 449575 AnAnonymous
AnAnonymous's picture

Or war on debt.

Lets declare war on debt.

You know, with a verbose speech full of allusions to freedom, liberty, truth and justice as the US love to give.

Fri, 07/02/2010 - 14:25 | 449633 SMG
SMG's picture

War on the eyeball triangle!

Fri, 07/02/2010 - 14:30 | 449654 The Disappointed
The Disappointed's picture

Yeah, and we will get the same kind of results as our 'War on Drugs' and 'War on Poverty'.

Fri, 07/02/2010 - 15:55 | 449846 inflation.stude...
inflation.studentloan--0's picture

just trying to help out the slow...

you mean more drugs, more poverty and ergo more debt, right?

Fri, 07/02/2010 - 20:46 | 450282 John_Coltrane
John_Coltrane's picture

It seems the way out of our problems lies with legalizing all recreational drugs.  The law enforcement savings and taxes alone justify it on economic grounds.  And suddenly, discontent vanishes like an overdose of soma.  Of course, like the lottery, it is a stealth tax on stupidity.  But it does deal with the surplus labor problem in a modern high tech society (which we tried to solve via the phony FIRE economy) where most lack both the skills and IQ to contribute to productivity in a meaningful way.

Fri, 07/02/2010 - 20:55 | 450289 RichardENixon
RichardENixon's picture

Good luck getting the Law Enforcement/Incarceration Industry to go along with that plan, sound though it may be.

Fri, 07/02/2010 - 23:13 | 450409 jeff montanye
jeff montanye's picture

there is historical precedent:  alcohol prohibition ended by the last deflationary depression.

Fri, 07/02/2010 - 16:31 | 449940 StychoKiller
StychoKiller's picture

Obamatron:  "Today, I'm appointing a new 'Debt Czar...'"

Fri, 07/02/2010 - 20:46 | 450283 e_goldstein
e_goldstein's picture

if we did that, what would we fight all the other wars with?

Fri, 07/02/2010 - 16:45 | 449970 Adam Selene
Adam Selene's picture

How about "war on Solvency." That has a nice ring to it.

Fri, 07/02/2010 - 19:30 | 450198 CPL
CPL's picture

Shhh, speak not the name of the devil or someone will notice!!


Huzzah huzzah!!  <jazz hands!>

Fri, 07/02/2010 - 20:56 | 450291 RichardENixon
RichardENixon's picture

We've already fought and won that war.

Fri, 07/02/2010 - 18:42 | 450128 IQ 145
IQ 145's picture


Fri, 07/02/2010 - 12:49 | 449417 OutLookingIn
OutLookingIn's picture


 When all else fails - Go to War! (Last line - economics 101)

Fri, 07/02/2010 - 14:49 | 449707 Temporalist
Temporalist's picture

You have a typo...(Last line - Keynesian economics 101)

Fri, 07/02/2010 - 19:16 | 450173 Crummy
Crummy's picture

Collateral damage keeps the mortician working.

Fri, 07/02/2010 - 19:27 | 450189 Gold...Bitches
Gold...Bitches's picture

Carl von Clausewitz - "War is merely the continuation of policy (politics) by other means."

Fri, 07/02/2010 - 21:46 | 450344 tom a taxpayer
tom a taxpayer's picture

War. What is it good for? 

Edwin Starr answers...

Fri, 07/02/2010 - 12:51 | 449421 Alcoholic Nativ...
Alcoholic Native American's picture

Good news everyone,

When NATO gets done winning in Afghanistan they can go home and become austerity enforcers for their respective countries.

Fri, 07/02/2010 - 18:45 | 450135 IQ 145
IQ 145's picture

 The timing doesn't work; 55 years from now, the austerity will already by taken care of.

Fri, 07/02/2010 - 19:33 | 450207 CPL
CPL's picture

Unless part of the austerity angles is to dump the military overseas and hang them to dry.  Honestly, if it does get that bad would you want 2 million trained troops armed to the teeth running around your country wondering why the checks bounced?

Sat, 07/03/2010 - 06:41 | 450580 Pensatulla
Pensatulla's picture

Hugo Chavez does have his soldiers checking on prices in grocery stores.

Fri, 07/02/2010 - 12:53 | 449426 Mako
Mako's picture
The Catalyst For War is the same as it always is, people not getting what they want.  The current system is providing less and less what they want, the liquidation is going to happen with or without a large scale war. 
Fri, 07/02/2010 - 13:01 | 449441 BobPaulson
BobPaulson's picture

ROTFL. What are you ****ing talking about?

Sorry, usually I just junk posts like this but I have the day off and can't help it.

Fri, 07/02/2010 - 14:22 | 449624 Eternal Student
Eternal Student's picture

I do believe that you've been trolled.

Fri, 07/02/2010 - 16:35 | 449953 BobPaulson
BobPaulson's picture

The original post is gone. My post was in reaction to a comment saying Turkey and the US were planning to invade Israel.

Fri, 07/02/2010 - 19:29 | 450195 Crummy
Crummy's picture

Well, that's ridiculous, Israel has nothing of value.

Unless you consider a divisive scapegoat to be valuable, but in that case you don't invade it you just point at it.

Sat, 07/03/2010 - 06:43 | 450581 Pensatulla
Pensatulla's picture

I think wall building has some value.

Fri, 07/02/2010 - 13:12 | 449466 resipsaloquacious
resipsaloquacious's picture

Brilliant stuff.  You are a modern day Cardinal Richelieu.

Fri, 07/02/2010 - 13:23 | 449489 Clayton Bigsby
Clayton Bigsby's picture

either that or a modern day Fuckaire

Fri, 07/02/2010 - 13:20 | 449484 Clayton Bigsby
Clayton Bigsby's picture

fucking agreed - I have read (and, yes, I'm sure even posted) some REALLY dumb shit on here (and a lot of very smart shit, so don't get your panties in a knot everybody) - but this is perhaps the dumbest fucking thing I have ever heard - no, really, the dumbest fucking thing I have ever heard - no, really.... ad infinitum...

Fri, 07/02/2010 - 13:22 | 449486 Let them all fail
Let them all fail's picture

Israel sucks, we need to lessen our ties, why the fuck are we so close with them other than our large Jewish communities?

I am not being rhetorical, I really want an answer to this question, thanks.

Fri, 07/02/2010 - 13:48 | 449540 tj3
tj3's picture


Israel has received more U.S. military assistance than any other country, both in terms of grant aid and military sales on a concessional basis. However, unlike other countries who receive military aid and are required to spend the money in United States, Israel may spend 25% on its domestic military projects.

Since 1987, the U.S. has provided an average of $1.8 billion annually in the form of Foreign Military Sales (FMS), Foreign Military Financing (FMF) and funds to support research and development.[2]

A bilateral memorandum of understanding was signed in January 2001, at the end of the Clinton administration, under which defense aid was increased to $2.4 billion annually from $1.8 billion, while the $1.2 billion of economic aid would be eliminated. This was predicated on the basis of the defense aid being increased by $60 million per year until the full amount was reached in 2008, while the economic aid is decreased by $120 million per year until eliminated.[3][19]

In 2007, the United States increased its military aid to Israel by over 25%, to an average of $3 billion per year for the following ten year period (starting at $2.550 billion for 2008, growing by $150 million each year).[20] The package is scheduled to start October 2008, when regular economic aid to Israel's economy is to end.[21] Officials have insisted the aid is not tied, or meant to balance, simultaneous American plans to sell $20 billion worth of sophisticated arms to its Arab allies in the region, including Egypt and Saudi Arabia[21]. U.S. President George W. Bush assured Israeli Prime Minister Ehud Olmert that the U.S. would help keep a "qualitative advantage" to Israel over other nations in the region.[20]

[edit] Foreign military sales

Israeli Air Force McDonnell Douglas F-15I Ra'am

Note: This is not a comprehensive listing of U.S. military sales to Israel.

Year FMS DCS TOTAL 2001 $766,026,000 $4,019,000 $770,045,000 2002 $629,426,000 $1,427,000 $630,853,000 2003 $845,952,000 $16,455,000 $862,407,000 2004 $878,189,000 $418,883,000 $1,297,072,000 2005 $1,652,582,000 $1,110,223,000 $2,762,805,000 2001–2005 $4,772,175,000 $1,551,007,000 $6,323,182,000
Fri, 07/02/2010 - 13:53 | 449550 Vix_Noob
Vix_Noob's picture

Wow, you said it better than I did and sent it off a bit faster too.  We should hang out.

Fri, 07/02/2010 - 15:25 | 449787 New_Meat
New_Meat's picture

Do you have equivalent data on same categories wrt Egypt?  I seem to recall that they are a close second.  Thanks-Ned.

Fri, 07/02/2010 - 23:28 | 450421 jeff montanye
jeff montanye's picture

egypt is not a close second in any important sense.  do u.s. senators and representatives quake in their expensive shoes lest they anger the egyptian lobby (see artur davis and cynthia mckinney)?   has the u.s. army fought a war, essentially at the command of egypt's most irredentist elements and their u.s. supporters (iraq)?  has egypt bulldozed an american to death and, when a play is written about it, broadway is too scared to produce it (rachel corrie)?  one could go on.

Fri, 07/02/2010 - 13:51 | 449549 Vix_Noob
Vix_Noob's picture

Because if the US doesn't give Israel what it wants Dancing with the Stars will be replaced with re-runs of Gunsmoke.  The sleepy population might pay attention and go vote.  What a potential disaster!  Its cheaper to just keep giving them monetary support so they can spend it on Foreign Military Sales to keep DC employed.

Fri, 07/02/2010 - 13:56 | 449557 Oracle of Kypseli
Oracle of Kypseli's picture

Nothing to do with Jewish people.

Think real estate.

Location location location 

Fri, 07/02/2010 - 14:59 | 449728 DosZap
DosZap's picture


"why the fuck are we so close with them other than our large Jewish communities?"

Three reasons.........

One, and the original One- Religious Heritage/Ties

Two, Only REAL M E Allie(that we can Count on,because they count on us).

Three,Our OTHER large Jewish Communities, are BY FAR Left Wing, Anti Zionist's Democrat voters.

Want more, I can go on for a while.

Fri, 07/02/2010 - 23:35 | 450425 jeff montanye
jeff montanye's picture

one is hardly unique.  two is a lie:  they spy on us and we can never use their facilities or troops in our middle east adventures (lebanon, kuwait, iraq) because the locals hate them so much it would be counterproductive; indeed most of the turmoil is due to the existence of israel.  three is incoherent.  try again.

Fri, 07/02/2010 - 15:20 | 449775 aaronvelasquez
aaronvelasquez's picture

We are close to the Israelis because:

A. The British put them there and they are therefore our brothers-in-franchise.

B. They are more culturally acceptable to us than the Muslims in the area.

C. Their lobbyists own Washington D.C.

D. They represent the only democracy in the region.

If you picked C, then you are eligible to win an all-expense-paid one-way trip to visit the overlords' viewing port at the top of the pyramid.

Fri, 07/02/2010 - 18:54 | 450146 IQ 145
IQ 145's picture

 With regard to B. it's usually a little easier to have a relationship with someone if they don't believe your the devil's spawn, the great Satan, etc., etc.

Fri, 07/02/2010 - 19:52 | 450231 Cathartes Aura
Cathartes Aura's picture

yeah, zionists & xtian fund-a-mentals, nice example of parasite / host. . . each "side" believing the other is toast when the big dude smites the heathens.

a pox on all warmongers.

Fri, 07/02/2010 - 23:41 | 450429 jeff montanye
jeff montanye's picture

iq 145: you mean "you're".  and it's "someone if he".  (i think it's the name with the attitude).

Fri, 07/02/2010 - 22:37 | 450390 maddy10
maddy10's picture


No kingdom of Jews?

British monarchy?

Council of 300?



Rest of alex jones' conspiracies?


Sat, 07/03/2010 - 08:41 | 450624 BostonTettierOwner
BostonTettierOwner's picture

AAron...whatever please accept the fact that the state enforcing racial segregation , appartheid in fact is not a democracy. Democratic Israel is an oxymoron my zionist friend :)

Fri, 07/02/2010 - 16:38 | 449960 Buzz Fuzzel
Buzz Fuzzel's picture

Obviously you are not familiar with the contents of the Bible.  Good luch with that!

Fri, 07/02/2010 - 18:35 | 449969 Shylockracy
Shylockracy's picture

The answer is that the Israel Lobby does not work as a normal ethnic lobby. You know, there are roughly 50 million ethnic Germans in the US, but they were integrated after one generation, so their interests became "American", and thus disappeared. Not so with the Jews, the "people who shall dwell alone", they work as a multi-generational industrial-interest lobby, supporting financially pre-approved candidates for public office whose malleability has been deemed sufficiently kosher. AIPAC has it as standard procedure to send questionaires to new candidates for federal and state-level office from both parties in which their ideological purity re Israel is tested. Fail this test, and you will have the wrath and finance of YHWH against you. Additionally, the Israel Lobby has been running honey traps in DC way before the Civil War was settled. They, supported by Wall St. money and their presstitute lackeys, can make and break any D.C. mainstream politician at will. Such is the state of the nation and of the Empire.

Fri, 07/02/2010 - 18:56 | 450150 IQ 145
IQ 145's picture

 How much would they charge to "break" Obama ? Seriously, dude, you really a wackamole.

Fri, 07/02/2010 - 19:21 | 450177 Nikki
Nikki's picture

Open your eyes to the truth asswipe. Do we really need to recite the names for you to understand what disproportionally represented means ?.

Sat, 07/03/2010 - 05:13 | 450566 mchawe
mchawe's picture


IQ 145 Obama is already bought and paid for.

Boil it all down, and you find AIPAC is the root cause of all evil in America

Sat, 07/03/2010 - 06:54 | 450584 Pensatulla
Pensatulla's picture

It's ironic that Shylock wasn't a Jew. The guy who was the model for Shakepeare was named Locke and he was a Christian. In fact, Jews were banned from Britain at that time.

Fri, 07/02/2010 - 20:02 | 450248 Barmaher
Barmaher's picture

Remember those '10 lost tribes of Israel'?  They've been found.  Celtic based countries in N. Europe and particularly in Great Britain and the offshoot, United States.  There used to be a Tyler Durden for religion and his name was Dr. Gene Scott.  Before he died he 'taught' on this subject for years drawing from history, archeology, heraldry, anthropology, and, of course, the Bible. You can still catch his telecasts 24/7 but his wife-successor has greatly reduced the available selections of material.

Present day Israel should really be called Judah.  The birthright name of Israel was bestowed upon the sons of Joseph.  In the 'end times' the House of Judah will be re-joined with the House of Israel.  Will you be one of the 144,000?

Hey, you asked!

Fri, 07/02/2010 - 13:55 | 449554 russki standart
russki standart's picture

Stop smoking the dope, Bro. The Obamation will no more likely attack Israel than GS will agree to give back government money and disband.

Fri, 07/02/2010 - 12:56 | 449429 resipsaloquacious
resipsaloquacious's picture

Cuba?  Yes.  Cuba.   It's got it all:  an enemy (commies, even -- talk about nostalgia!), logistically esier and much cheaper than sending forces half way around the globe, hot, loose women, and a great climate. 

Fuck, let's just make it a state. 

Fri, 07/02/2010 - 13:08 | 449456 Uncle Remus
Uncle Remus's picture

commies, even -- talk about nostalgia!



Fri, 07/02/2010 - 13:10 | 449458 Dingleberry Jones
Dingleberry Jones's picture

Don't forget: They also have a great sangwich.

Fri, 07/02/2010 - 13:17 | 449477 resipsaloquacious
resipsaloquacious's picture


Fri, 07/02/2010 - 13:57 | 449558 russki standart
russki standart's picture

And the Cubana Chicas give great BJ´s for less than the cost of 24 bud.

Fri, 07/02/2010 - 15:02 | 449736 DosZap
DosZap's picture


They won't after "O", opens the travel restrictions.............Inflation big time.(your price just got upped big time).

Besides,by then, they will be $.25 the rate to hell we are on.

Fri, 07/02/2010 - 19:56 | 450238 Cathartes Aura
Cathartes Aura's picture

lucky for you lads that "bj"s are equal opportunity with regards the genders. . .

full employment for all.

Fri, 07/02/2010 - 14:12 | 449598 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The best sangwich, mang!

Fri, 07/02/2010 - 14:35 | 449666 economicmorphine
economicmorphine's picture

Ok Tony fucking Montana.  Just don't get high on your own supply.

Fri, 07/02/2010 - 14:41 | 449680 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Okay Krugman, you wanna play games?!  Say hello to my 'lil frien'!"  Pulls out a bag of silver and whacks him over the head.  Krugman falls, tries to get up, stumbles out the door.

"Fly pelican!"

Fri, 07/02/2010 - 19:33 | 450209 Gold...Bitches
Gold...Bitches's picture

while the sap has generally been filled with lead, silver just makes it so much more of an aristocratic weapon, no?  Nonetheless, I like the imagery of Krugman going down with a shot of silver to the temple whimpering "no more, no more"... "I'll be good".

Fri, 07/02/2010 - 20:25 | 450266 cossack55
cossack55's picture

Very bloody nice mr. H.  LMAO

Fri, 07/02/2010 - 22:43 | 450394 maddy10
maddy10's picture

Krugman is no Judas, he hates silver

He is in 'Kingdom of God' gang, 'Power of infinity'- go ben-gono


Fri, 07/02/2010 - 13:13 | 449469 BobPaulson
BobPaulson's picture

Won't fly with Europe. Venezuela looks more likely to me, using Columbia as the puppet launch pad. Also gets a check mark on the last two criteria you cite. Venezuelan trade with China gets a lot of press but I can't see the Chinese doing much to stop this.

Keep in mind Cuba has no resources except farming, though geographically it's a key location for the US to contain, control or neutralize.

Of course Iran is an obvious choice for their oil and pariah status, but for now the risk of over stretching and simply not prevailing easily has stopped this from happening, IMO. Right now my guess is they are vigorously recruiting farsi speaking agents in southern Iraq to build a network to support student unrest. They'll need a few rogue Iranian generals onside for a revolution, which won't happen until some heavy handed killing of students by pro government forces.

Fri, 07/02/2010 - 14:02 | 449568 Muir
Muir's picture

"Keep in mind Cuba has no resources except farming..."

Au contraire, Cuba has oil (to be developed with Venezuela,) mining (tin) etc

CIA factbook Industries

sugar, petroleum, tobacco, construction, nickel, steel, cement, agricultural machinery, pharmaceuticals
Fri, 07/02/2010 - 15:10 | 449750 DosZap
DosZap's picture


Never happen G.I..............

We only invade countries, that do nothing but cost us Blood,families,wealth, and that are so shitty, after we're thru, WE pay to rebuild them..............

We still have countries that OWE us millions(multiple billions, adjusted for inflation), that were never repaid after WWII.

And in return, THEY give us NOT A DAMNED THING.

Seen any repayment coming this way from IRAQ?.As in crude at a great rate?.

Hell no, and you won't.............we NEVER extract a pound of flesh, and cash, or steal natural resources.............only contractors get a taste.

The U.K. was great at that, during Colonialism............

To the majority of the rest of the world, we are SCUM sucking Imperialst dogs, only fit for Cannon Fodder.( After we try nation building).


Fri, 07/02/2010 - 19:23 | 450181 IQ 145
IQ 145's picture

 It won't fly with Europe ! How many aircraft carriers does France have ?  They'll get used to it, that they're good at.

Fri, 07/02/2010 - 19:45 | 450224 dark pools of soros
dark pools of soros's picture

latin women always look like its just a coin flip if they are real or packing a penis

Fri, 07/02/2010 - 22:47 | 450398 maddy10
maddy10's picture

yeah and it says 'we don't yet know what we are gonna do when we have no more countries to engage with, so far we are playing with some mice'

Fri, 07/02/2010 - 23:33 | 450424 delacroix
delacroix's picture

 saudi arabia,lots of oil, little military, we already have bases there, and look, isn't that al qaeda

Fri, 07/02/2010 - 13:24 | 449491 Treeplanter
Treeplanter's picture

Not worth it.  We already have Puerto Rico.  

Fri, 07/02/2010 - 13:33 | 449509 resipsaloquacious
resipsaloquacious's picture

Cuba > PR.

Fri, 07/02/2010 - 19:26 | 450185 IQ 145
IQ 145's picture

 Don't remind me. No, seriously; we could trade. Make Cuba a state and give Castro to PR. He wouldn't last five minutes in PR, and it wouldn't be on our hands. perfect.

Fri, 07/02/2010 - 15:42 | 449827 The Alarmist
The Alarmist's picture

When Obama mentioned the 57 states during the campaign, do you think he already had Cuba in mind as one of the new 7 states?


Fri, 07/02/2010 - 16:47 | 449973 tewkatz
tewkatz's picture

That would increase the tax-base....and cheaper to conquer than another bank bailout!

Fri, 07/02/2010 - 18:59 | 450155 IQ 145
IQ 145's picture

 Great idea ! I like it and the Cubans will love it. After they sell all their 1957 chevys, lkthey'll all be wealthy.

Fri, 07/02/2010 - 12:57 | 449430 dehdhed
dehdhed's picture

not to make a big deal about it, but it's almost never mentioned about california's law allowing for state workers to be paid minimum wages until a budget is passed ... once there's a new budget, all workers get their back-pay that's owed them

it's not forever like everyone sensationalizes, and it's not good .. and maybe it would be better to just shut down the government, i dunno.


but the back-pay issue is rarely discussed about this decision

Fri, 07/02/2010 - 13:12 | 449467 thesapein
thesapein's picture

that's because the back pay is a liability, not a good thing to focus on, and laughable if things weren't so sad.

Fri, 07/02/2010 - 14:36 | 449671 economicmorphine
economicmorphine's picture

Doesn't matter.  The state comptroller prefers to pay with dollars borrowed from the other 49 soon to be nation states.

Fri, 07/02/2010 - 15:12 | 449755 DosZap
DosZap's picture


To be honest, I was floored anyone in Kali MADE Minimum wages.......( as loose as they are w/OPM).

Fri, 07/02/2010 - 19:01 | 450158 IQ 145
IQ 145's picture

 Yeez, that's really depressing; I thought the civil snervants were finally going to get what they deserved; no pay for no productivity. Bummer.

Fri, 07/02/2010 - 12:57 | 449431 cainhoy
cainhoy's picture

and people think that the mayan calendar ending in 2012 is a load of bunk? wait...just wait.

Fri, 07/02/2010 - 13:30 | 449503 Treeplanter
Treeplanter's picture

The Mayans say it's a load of bunk.  But what would they know?  Reminds me of the Sand Creek battle site.  For a century historians fussed over where in SE Colorado did Colonel Chivington attack a Cheyenne peace camp.  For a century the Cheyennes said it was right over there, guys.  Finally a historian went where the Cheyennes pointed and he discovered the battle site.  

Fri, 07/02/2010 - 13:40 | 449519 schoolsout
schoolsout's picture

you in SC, Cainhoy?

Fri, 07/02/2010 - 17:27 | 450046 DocLogo
DocLogo's picture

If the Mayans were so smart, why are they all dead?

Fri, 07/02/2010 - 18:01 | 450086 Currently Smoki...
Currently Smoking Cannabis's picture

They're not.  There are Maya in Southern Belize, among other places.

Their cities were abandoned, but the people lived on.

Maybe that'll be their real lesson for us.

Fri, 07/02/2010 - 18:25 | 450108 swmnguy
swmnguy's picture

Quite a few Maya right near me in South Minneapolis, actually.  At least, a lot of people with the physical features so prominent in Maya art.  I don't think they're originally from here, though.  In January they look downright uncomfortable.

Fri, 07/02/2010 - 21:07 | 450097 Currently Smoki...
Currently Smoking Cannabis's picture

Double post.  Sorry.

Fri, 07/02/2010 - 19:07 | 450165 IQ 145
IQ 145's picture

 Definitely not dead. One of my best friends in my life was Mayan; he was a citizen and resident of Mexico, but you can't blame him for that. He's passsed on now; but both he and his family were very smart and very upright solid people. The latest theory is that they had a drought for 150 years or something; pretty hard to overcome.

Fri, 07/02/2010 - 12:57 | 449434 DoctoRx
DoctoRx's picture

At an alleged GDP of $40K+ per capita, "austerity" needn't be austere.  Imbalances can be fixed but the country needs straight talk from its leaders.  Many hoped/expected that Obama would provide that, but he looks more and more like a Chicago pol to more and more people. 

Re the war meme, does Mr. Grice forget that Obama has ALREADY chosen his war?  It was supposed to be a successful surge in Afghanistan.  The faux city of Marja was his first disaster.  Sorry, he's no Maggie -- doesn't have her cojones.

Fri, 07/02/2010 - 15:25 | 449788 DosZap
DosZap's picture


"Obama has ALREADY chosen his war"

He sure did, and it's ON US, a few here haven't figured that out......for damn sure they will in 2011.

Fri, 07/02/2010 - 19:13 | 450170 IQ 145
IQ 145's picture

 gonna back on them middle class white folk, that made him feel 'ferior. I absolutely couldn't believe what was available for that Pres. election; a pair of brain dead loonies, or or a professional "special preference" politician. Mind boggling. we've come a long ways indeed from Eisenhower and JFK; God rest him.

Fri, 07/02/2010 - 12:57 | 449435 Joe Shmoe
Joe Shmoe's picture

Yes.  What other excuse do they have for massive spending?  Oh yeah, they could have use the gulf clean up, but have to pin that on BP.

Fri, 07/02/2010 - 13:03 | 449444 bonddude
bonddude's picture

Bingo. We have a winner.


Once that BP spill happened it satisfied many

rationales for war...on Iran

Oil Px up

Britain happy

Oil/power brokers happy

Israel happy

Greens in Iran Happy

etc, etc, etc...

Fri, 07/02/2010 - 13:18 | 449478 thesapein
thesapein's picture

Cap and trade, too. The global warming myth just got a face lift.

Fri, 07/02/2010 - 14:01 | 449566 russki standart
russki standart's picture

Re Thesapein,´s more like spraying perfume on a pig. The good news is that the high priest, Gore, needed to have his second chakra comes the scandal.

Fri, 07/02/2010 - 15:32 | 449806 DosZap
DosZap's picture


Why do you think he didn't show his ass for weeks at the Scene?..........and why did HE turn down Int'l help, until day 70?.(don't think it was the Jones Act.)

The Agenda..."Never fail to take advantage of a Crisis".

This one, is going to backfire in his face though..........he has won more than lost, but his PERSONAL ratings are in the suck tubes......

Nothing HE could do at this point will save him.Or, the high rolling spenders on the Hill.

In Nov, it will look like Little Big Horn, and on BOTH parties.

Fri, 07/02/2010 - 19:18 | 450174 IQ 145
IQ 145's picture

 fifty years from now, if people are still studying Chemistry and Physics, if you tell the students we had a madwoman in something called the EPA that declared atmospheric CO2 was a threat to human welfare; they'll say, nah, that didn't happen. How could an actual Federal Official be that ignorant.?

Fri, 07/02/2010 - 19:32 | 450202 Dr. Sandi
Dr. Sandi's picture

Atmospheric CO2, eh?

Makes me breathe hard just thinking of it.


Sat, 07/03/2010 - 12:17 | 450723 WaterWings
WaterWings's picture

It's about that time again when only external violence will have any effect. And it's always too late for them.

Fri, 07/02/2010 - 13:04 | 449445 Equity Research Rex
Equity Research Rex's picture

Wait till the people (sheep) realize that TBTF is not as real as TBTJ with the J being Jail.  The riots are coming.

Fri, 07/02/2010 - 13:28 | 449499 Clayton Bigsby
Clayton Bigsby's picture

whaaat?  no fucking way

Fri, 07/02/2010 - 13:42 | 449527 walküre
walküre's picture

It would solve alot of problems. /sarc

Seriously, is there anyone who does not understand that the US is a fascist state?

Fri, 07/02/2010 - 14:17 | 449574 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is anyone surprised that Barry is a war monger?  He did call for unilateral drone bombing of Northern Pakistan before he was elected.  Maybe just a useful sadistic/masochistic idiot?  Maybe just a robot, manipulated by the same HFT computers Walled St uses to manipulate the exchanges?

Fri, 07/02/2010 - 14:51 | 449709 bonddude
bonddude's picture

I laugh at the believers.

There is no such thing as politics (in reality).

Fri, 07/02/2010 - 19:30 | 450200 DoChenRollingBearing
DoChenRollingBearing's picture

Mr Lennon strikes again!  LOL re robot manipulated by HFT computers.

+ $ whatever gold is today.

Fri, 07/02/2010 - 16:27 | 449931 DosZap
DosZap's picture


Yeah, now we have that agreed on, who is going to disarm JUST  10-15% of 80 million American weapons owners?,if they do not go along.

Fri, 07/02/2010 - 22:27 | 450381 dogbreath
dogbreath's picture

I'm not sure all americans will see things the same way.  How will inner city black people or say hispanics and mexicans in arizona or say fundamentalist christians view the problem(s).  Then you have the drug gangs. It will be a dog pit and nobody will know who to trust.

 Obama calling for a civilian force as big as the army means three things. 

Posse commitatus is irrelevant                      

It will be a place to go for all those boys and girls coming home from the stans.  

The other aspect to this is that it smacks of the bolshevik model.  You are with us or...........ratting your neighbor .  Knock knock knock...............



Fri, 07/02/2010 - 14:17 | 449607 Cathartes Aura
Cathartes Aura's picture

thanks for that link. . . follow on article:

Not only is the State Department looking for a combat force, they insist they need to “duplicate the capabilities of the US military,” seeking to acquire 24 Black Hawk helicopters, and a number of other combat vehicles.

The State Department says the creation of the new force is necessary for a “smooth transition,” but it leaves open the question: transition from what to what?

what indeed.

Fri, 07/02/2010 - 14:20 | 449618 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

From the disbandenmanet of Habius Corpus that constitues marshal law that Bush had the power to inforce thanks to the all seeing eye known as Homeland Security to the enforcement of a police state.  It is an easy next step.  The question I have is....

Why????  I trust my fellow people.  All we need to do is get rid of the Fed, and turn it into a museum  :D

Fri, 07/02/2010 - 20:22 | 450262 Cathartes Aura
Cathartes Aura's picture

+ a de-junk, sir

you must have made someone's butt pucker in fear at the mere mention of "Continuity of Government". . .

Several months before the September 11, 2001 terrorist attacks, Secretary of Defense Donald Rumsfeld approved an updated version of the U.S. Army's secret operational Continuity of Government (COG) plans.

Exercising sweeping emergency powers buried within Presidential Decision Directives (PDDs), unelected officials could suspend the Constitution, declare martial law and create an Executive Branch dictatorship that rests solely on the power of the U.S. military.

Most troubling, Executive Branch officials under secret rules of a COG regime could suppress and usurp the lawful powers of Congress and the Judicial Branch (by force of arms if deemed necessary) as a means of ensuring "cooperation" under a "unitary executive."

As we have seen, the "unitary executive" theory has been a salient feature of Bushist rule since the December 2000 judicial coup d'état, when the Supreme Court's Bush v. Gore decision handed a contested election to George W. Bush by stopping the vote count in Florida.

Since assuming office, the administration has ruthlessly wielded executive power in order to achieve their antidemocratic agenda: from the looting of the economy through "deregulation," massive deficit spending and tax cuts for their corporate "clients," to waging a preemptive war of conquest in Iraq, the "unitary executive" has systematically shredded America's constitutional system of checks and balances.

The Bush administration put COG plans into operation for the first time in U.S. history in the hours directly following the September 11, 2001 terrorist attacks. They have never been rescinded.

and, in case you never heard:

Obama Keeps Bush's "Continuity of Government" Plans in Place Power Shifts in Plan for Capital Calamity

A shift in authority has given military officials at the White House a bigger operational role in creating a backup government if the nation’s capital were “decapitated” by a terrorist attack or other calamity, according to current and former officials involved in the decision.

The move, which was made in the closing weeks of the administration of President George W. Bush, came after months of heated internal debate about the balance of power and the role of the military in a time of crisis, participants said. Officials said the Obama administration had left the plan essentially intact.


ponder that as the summer unfolds. . .

Sat, 07/03/2010 - 10:06 | 450658 Citizen of an I...
Citizen of an IKEA World's picture

....the December 2000 judicial coup d'état, when the Supreme Court's Bush v. Gore decision handed a contested election to George W. Bush by stopping the vote count in Florida.



Fri, 07/02/2010 - 14:36 | 449672 RichardP
RichardP's picture

Meet the new draft.


Fri, 07/02/2010 - 18:27 | 450111 swmnguy
swmnguy's picture

Not necessarily the same as the old draft.

Fri, 07/02/2010 - 20:25 | 450265 Cathartes Aura
Cathartes Aura's picture

"employment stimulus package"

Fri, 07/02/2010 - 14:38 | 449675 economicmorphine
economicmorphine's picture

Can't speak for the other 49, but he's already got one in Texas.  The problem, for him at least, is that they're not on the same team.

Fri, 07/02/2010 - 19:38 | 450217 grunion
grunion's picture

Indeed...Notice how he never goes to Texas

Fri, 07/02/2010 - 14:57 | 449726 Translational Lift
Translational Lift's picture

He's been planning this since he was (sic) elected.  German SA mean anything??  If not?....Look it up and you will know just what this ahole has in mind.

Fri, 07/02/2010 - 15:21 | 449777's picture

A "Ready Reserve" force has already been authorized by the new healthcare legislation. It's the fulfillment of  the civilian security force called for in Rahm Emmanuel's book The Plan.

Fri, 07/02/2010 - 17:45 | 450069 Suisse
Suisse's picture

This sounds fun, I could really use a job. This sounds like I'd get to play dress up, ride around in cool vehicles, and carry guns. Where do I sign up?

Fri, 07/02/2010 - 20:28 | 450268 Cathartes Aura
Cathartes Aura's picture

mind where you sit in those "cool vehicles" - the hot seat tends to be on the box of depleted uranium shells. . .

those play havoc with yer. . . parts, y'ken?

Fri, 07/02/2010 - 19:52 | 450232 bonddude
bonddude's picture

Apparently you hadn't been paying attention.

It was a Rahm idea.

Fri, 07/02/2010 - 13:07 | 449452 Village Idiot
Village Idiot's picture

Well, if it's war someone wants - what better prelude to it than the 4th of July.  Happy 4th, ZH clan - taking the weekend off from my favorite site.  I'll be back with more bad jokes, poor delivery and limited contribution, next week.  Peace.

Fri, 07/02/2010 - 19:32 | 450204 DoChenRollingBearing
DoChenRollingBearing's picture

Back at you Village!

Fri, 07/02/2010 - 13:10 | 449459 sschu
sschu's picture

It is difficult to imagine how this will all end well.

I am in an extended discussion with friends about the “better” or least bad of the 2 scenarios often discussed, inflation or deflation. When looking at much of recent history, it would seem that deflation has the best chance of resetting the population to act responsibly and hence insure that the country can move forward after the worst is over. This of course makes a number of assumptions that the people will act like adults, realize that what has occurred (debt induced economic bubble) is the cause, and will work to fix the problems, including those systemic problems like the Fed. None of these are a given.

IMHO, high inflation/hyper inflation is more destructive to the social fabric, hence the chance of a social collapse is more likely given this circumstance. Consider post WWI Germany, where the fabric of the country was destroyed, all faith was lost in the government/system and people were simply focused on how to convert this cash in hand to tangible property as quickly as possible. The result was of course the Nazis and all that entailed.

It may well be deflation then hyper inflation, who knows. In the end I would think deflation is the least painful in the long term, but probably more painful in the short term.

FWIIW, sschu

Fri, 07/02/2010 - 13:24 | 449492 DaveyJones
DaveyJones's picture

the flation conundrum. Does it really matter? The trillions in useless debt transferred to the masses will only move things in one direction in the end but then the government, short on tricks, will ultimately respond with a printing frenzy. Hyperinflation and collapse. War for sure, but that will only weaken us further.

Comforting thoughts as we celebrate our birth


Fri, 07/02/2010 - 13:49 | 449544 sschu
sschu's picture

Does it really matter?

Possibly, but probably not. 

We can learn from this as a country and not fall into the same fiat currency debt induced catastrophe by making good decisions moving forward.  I believe deflation has the best possibility of "teaching" us this lesson.

My expectations are low however.


Fri, 07/02/2010 - 16:54 | 449984 StychoKiller
StychoKiller's picture

What if they decide to throw a war and NO ONE shows up?

Fri, 07/02/2010 - 20:54 | 450286 e_goldstein
e_goldstein's picture

then that is what the predators are for.

Do NOT follow this link or you will be banned from the site!