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Chris Martenson Interviews Jim Rickards: Paper, Gold Or Chaos?

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Jim Rickards: Paper, Gold Or Chaos?

History is replete with the carcasses of failed currencies destroyed through misguided intentional debasement by governments looking for an easy escape from piling up too much debt. James Rickards, author of the recent bestseller Currency Wars: The Making of the Next Global Crisis, sees history repeating itself today - and warns we are in the escalating stage of a global currency war of the grandest scale.

Whether it ends in hyperinflation, in the return to some form of gold standard, or in chaos - history is telling us we can have confidence it will end painfully.

On The Cause of Currency Wars

A currency war in the simplest form is basically when there is too much debt and not enough growth. The overhang of debt impedes growth because it clogs up bank balance sheets and clogs up the savings to investment mechanism and has a lot of negative effects. So there is not enough growth to go around. So countries, in effect, try to steal growth from their trading partners by cheapening the currencies.

And indeed, the Fed and the Treasury are trying to do that right now. They are trying to cheapen the dollar, probably for the reason I mentioned. The problem is it does not stop at that. It invites retaliation...
A couple things happen. Number one – we cheapen our currency but other countries try to cheapen their currency also, so you get into these tit-for-tat devaluations where nobody wins. All you do is unleash inflation, restrict world trade without anyone getting an advantage. I like to say that in the currency wars, all advantage is temporary. You give it up pretty quickly.

The other thing is that for countries that cannot necessarily devalue, they can use capital controls, they can use import excise taxes. Currency wars can turn into trade wars. Ultimately, they can even turn into shooting wars. So you get all these bad effects.

So if the US could cheapen the dollar in isolation, if nothing else happened, maybe there would be some quick advantage. But that is not what happens. But it is a temptation that politicians and policymakers can not resist, but it ends very badly

On Current US Monetary Policy

There is no question. It is quite clear that the Treasury and the Fed are trying to inflate their way out of the problem and debase the dollar.

The problem I see is they might not get there, and here is why. The Fed thinks they are playing with a thermostat. You know, you can, if the room is too cold you dial it up. If the room is too hot, you dial it down by adjusting the money supply and working a little bit with expectations on the behavioral side that can gradually tweak economic behavior and lending and spending velocity and money supply that achieve a desired result. The problem is they are actually playing with a nuclear reactor. They are playing with a complex system that is in or near the critical state. Now, you can dial a nuclear reactor up and down but if you get it right, the consequences are worse than having to put on a sweater. The consequences are catastrophic. You can melt down a reactor and ultimately, the entire financial world.

So the danger I see is the Fed thinks they are playing with a thermostat. They are playing with a nuclear reactor and they risk collapsing the entire system.

On the Importance of Understanding What's Happening

So that is what the Fed is trying to do. They are trying to get that lending/spending machine going again, get the velocity of money up and kind of inflate their way out of this problem.

A couple problems with that. Number one, two percent inflation is not so benign. Two percent inflation cuts the value of the dollar by seventy five percent in the course of a typical lifetime. So it cuts it in half in thirty-five years and then in the following thirty-five years, cuts it in half again. So now, you are down seventy five percent from where you started. So from the time you are born to the time you die, your dollar is going to lose seventy-five percent of its value. That is at two percent inflation. At four percent inflation, it will cut the value of a dollar in half by the time your children go to college. So these are cancerous rates of inflation. Two percent sounds warm and fuzzy. It is not.

The other thing economists say is, you know, who worries about inflation because your wages are going up and it all comes out in the wash. Well, I mean, this is the kind of thing that only an economist could say. But the fact is some of it does come out in the wash on average. But we do not live on average. We live our individual experiences.

And the fact is in inflation, there are winners and there are losers. The winners are people who can see it coming, who understand what you and I and hopefully the listeners are talking about and hedge their position by getting gold or silver or land or fine art or investing in railroads as Warren Buffett is doing, some kind of hard asset play. The losers, those are savers, people with insurance policies, annuities, pensions, retirement plans – anything denominative dollars that are not going to go up when the inflation kicks in.

This interview is so insight-packed I had trouble winnowing down the quotes to highlight. It is a 'must-listen' for those concerned about preserving the purchasing power of their wealth.

Click the play button below to listen to Chris' interview with James Rickards (runtime 29m:25s):


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Sat, 02/18/2012 - 14:12 | 2173113 GeneMarchbanks
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Actually, we're all losers as the failed experiment will show in the coming years. Nobody gave a shit about fine art in the Dark Ages because food was hard to come by.

Rickards as a predictive analyst is a joke.

Sat, 02/18/2012 - 14:20 | 2173124 Transformer
Transformer's picture

Yeah, this whole doom and gloom thing is wearing on me.  It can't really be all that bad.

Sat, 02/18/2012 - 14:22 | 2173129 The Big Ching-aso
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Rock, paper, scissors, gold?

Sat, 02/18/2012 - 14:34 | 2173155 Motley Fool
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It won't be. In fact I see very prosperous times ahead...after the crash of course.

Sat, 02/18/2012 - 14:48 | 2173187 Badabing
Badabing's picture


Sure blame us not the fuckers that took us off the gold standard.

Inflation is the crime that is responsible and we had no choose in the matter.

my dad was able to support a family of eight  with the salary a presser makes. Thats a guy that presses pants at a laundry. Inflation made my mom have to work to make ends meet.

Inflation doubled  the work force while all the jobs got outsourced. inflation is a ripoff by the guys in control. Tell me what the fuck gives them the right to inflate the the money that we use to save!

get off the peoples back the people are the victims. the population in the usa is shrinking to the point that the SS ponzi don't work. Even with a shrinking population we should have more to go around, BUT NO inflation took that away!  


Sat, 02/18/2012 - 15:01 | 2173208 LowProfile
LowProfile's picture

Yeah, but look at all the government jobs that enabled...  And all the freedom we spread!


Sat, 02/18/2012 - 15:21 | 2173256 Mariposa de Oro
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I share your frustration.  The assholes have no right to do this to us.  Unfortunately, the majority of people give them the opportunity.  I woke up a few years ago and have been trying to wake up those around me.  They REFUSE to think.  How much success have you had waking up those around you?  Face it, most Americans can't be bothered with this.  They live in LaLa land.  Soon enough they'll be living in the real world.  Maybe then things will have a chance at getting better.  Until then, its gonna suck.  Remember, you can't make someone care.  Either they do or they don't.  You can't force it.

Sat, 02/18/2012 - 15:37 | 2173298 Badabing
Badabing's picture



Look i'm no economist, I'm a working guy and i get it .

i've noticed at gatherings people are getting it.

As it gets worse it gets out that we have been taken over by some greedy bastards.

people are waking up, it is hapening!


Sat, 02/18/2012 - 16:03 | 2173405 Mariposa de Oro
Mariposa de Oro's picture

I'm an electronics technician by trade but I was able to see this shit coming a long way off.  Unfortuanely, those around me still don't get it. BUT, I'm on a remote island and we don't have the same pressures.  We don't even have personal vehicles here!  We don't buy gas, pay utilities, etc.  Yep, we're all on the teat here.  Folks here are determined NOT to see it.

Sat, 02/18/2012 - 16:36 | 2173503 Badabing
Badabing's picture


Sounds like your pretty isolated. very cool you live on an island that doesn't need cars, I like!

But does this isolation give you a false feeling that every thing gonna be alright?

look at the big picture, the world is revolting, the middle east, Greece, London. the protests are a sign that people are not going to take it any more and it's getting worse. 


Sat, 02/18/2012 - 16:55 | 2173539 A Nanny Moose
A Nanny Moose's picture

You are watching the process of creative destruction. A little revolution now and then....

So what's the problem?

Sat, 02/18/2012 - 22:15 | 2174131 Mariposa de Oro
Mariposa de Oro's picture

I don't think eveything is gonna be alright for everybody, everywhere.  Those that are awake and have prepared adequately, will for the most part be okay.  For the majority who don't even see it coming, particularly in the USA, it'll seem like  TEOFTWAWKI.  The survivors will flourish once the crap is cleaned out of the system.  As for the folk on my island, we have everything we need here to survive.  Will we work together and do it, who can say for certain.  I think we will.  It won't be smooth transition but we'll manage.  Because of our remote location we have an actual community here.  Everywhere you go, you know people.  There are less than 2000 of us here.  Because this is a military installation, trouble makers and unemployed people are sent back home to the mainland.  We're  a small city in the middle of an ocean and have all the skills needed in get by.  If food and fuel stop arriving it'll be shock to the system I'll give it that, lol.  But we have a huge water catchment system, fish in the lagoon and a shit-ton of coconuts as well as other tropical fruits in small quantity.  We have a couple hundred engineers and technicians here.  We're all quite accustomed to making do with what's available.  Will I miss air conditioning and indoor plumbing?  You bet, lol, but I've been homeless and in the Army and can tough it if I have too.  Many others here  are the same.

Sun, 02/19/2012 - 10:45 | 2174680 Badabing
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M D Gold

just try to imagine that the earth is an island.


Sat, 02/18/2012 - 22:28 | 2174132 Mariposa de Oro
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Sat, 02/18/2012 - 17:28 | 2173617 Chuck Walla
Chuck Walla's picture

Its the chumps selling their votes for a pitance that do the damage. they Twitter Obama how happy they are that the master will give them another $40 a month. Obama just took in 5+ million  last week. Shouldn't they be demanding something a little more substantial than $40?  They pay no income tax and could not care less about those who do as long as some Progressive is willing to give them a lawful claim on another man's paycheck.

Sun, 02/19/2012 - 11:03 | 2174697 EnglishMajor
EnglishMajor's picture

But the savior state is like a big brother. He looks out for us. He watches over us and gives us a little money and some food when we need it. Big brother will always take care of us and keep us safe from the evil-doers. Big brother is all we need.

Sun, 02/19/2012 - 18:51 | 2175981 malek
malek's picture

I would love to have the same feeling about people waking up. In my experience most still aren't.


Mon, 02/20/2012 - 07:29 | 2177043 Marty Rothbard
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You are correct, but things are changing.  I hope for the better.  As Joe Sixpack loses his job, because the car parts are now being made in China, and consequently, he's losing his house, his wide screen TV, and his asurdly large pickup truck, because he can no longer make the payments. He is  losing his family, because his wife is divorcing him, since he has no money, so she can get the quickly devaluing welfare benefits, that the government only gives to single custodial parents, along with the few dollars he can make at Walmart, as child support.  He is rapidly running out of things to destract him, from the way assorted governments, banks, and institutions are bending him over, and reaming him out.  It's too bad the same bad actors have convinced him that we need to keep killing lots of muslims, or else we will never be safe from terrorists.  Otherwise he could vote for Ron Paul, and give his persecutors a reaming for a change.

  I'm afraid however, that since Ron Paul is unaccepably nonwarmongering, there is no choice, other than civil unrest.

Sat, 02/18/2012 - 18:55 | 2173773 oldman
oldman's picture

@ Bad,

Agreed, but being off the gold standard and having gold unpegged and traded openly(until recently) has allowed us to see inflation and the effects the theft of the common weal by government and its partner----crony capitalism, sooooooo clearly. This de facto regulator has made all of this obvious for several decades now, but we still pay for war and fuck the working people for all we asre worth.

The whole discussion is fallacious-----throw the motherfuckers(there is no other name for them) out and stop the wars. The growth problem, in part, comes from exporting productivity and importing unemployment and discontent. Basically, we are just to stupid to survive---we don't get it.

An oldman is not so affected, but he does shudder for the future of his grandchildren and those of his friends. Life is too sweet and beautiful to make life so difficult for so many---there's plenty for each member of every species on this planet



Sun, 02/19/2012 - 10:38 | 2174670 Badabing
Badabing's picture


Old man take a look at my life it's a lot like you.


Its a tough road to right this world wide problem we have. When i say "we" i'm talking about huminkind. I've heard only 1% is in control, and they use this paper ponzi to pay off the the poor basterds that suppress upriseings little to their knowing its their own children and brothers that are getting beaten down for the god given right of happyness. When mercenaries will have to be paid in gold by the 1% this war will be over. Some say it's TSHTF but it can also be a new beginning. I served in the army during Vietnam and didn't serve with anyone who thought that what we where doing was right and we had a choice to expatriate or fight the draft was on at the time. but the young people spread the word with music and it did change things. today we have the WWW. It's sad that I can be consitered a terrorist!

Sat, 02/18/2012 - 19:08 | 2173788 Whiner
Whiner's picture

I am 68. I have five productive children. I feel lucky,and blessed. I rode the bubbles of inflation and survive today with a net worth sans debt. I am like the guy at the lavish party of drunks who only got a buzz, ate some shrimp and left sober before the gigantic bill was presented to the drunks on the floor, the cops turning on the lights. Glad I am going and not 'acomin'!

Sat, 02/18/2012 - 20:11 | 2173900 Lednbrass
Lednbrass's picture

The problem is that the drunks arent going to pay the bill either, its going to be tabulated and divided amongst everyones children unless we get a crash. Theyre all laughing and walking out.

Sun, 02/19/2012 - 09:55 | 2174632 PMakoi
PMakoi's picture

"The debt must be repaid!" -attribute quote to nearly any economist, banker, politician, lawyer, judge, TPTB, etc...

Retort query: "Why?"  Eventually, people will ask.  Eventually, people will refuse to pay for the mistakes made by lenders.  Eventually most will be unable to pay, and the few will finally refuse to pay.  The financial Ponzi will end, but not before some of us are ostracized, jailed, made paupers, and scapegoats.  Maslow's overpopulation resolutions coming to Countries near you soon.  Keep your family, your neighborhood, and your communites strong.  It will matter. 

Sun, 02/19/2012 - 10:32 | 2174665 SunnyDD
SunnyDD's picture
You got it man!!!!


++++++10000000000000 hehe.


Sat, 02/18/2012 - 14:34 | 2173156 Motley Fool
Motley Fool's picture


Sat, 02/18/2012 - 19:24 | 2173809 disabledvet
Sat, 02/18/2012 - 14:31 | 2173140 ManOfBliss
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This isn't the dark ages, faggot. Food is more readily available. Storage and refrigeration methods are vastly improved. Farming methods are far more productive. Food is much more abundant and will be more accessible during a collapse. Fine art will be a barter good, because we all know EVENTUALLY we'll come out the other side of this, and art will retain its value.

He shared 30 minutes of really helpful insights, and you're only reply is... "he's a joke". You're obviously intimidated by him.

Sat, 02/18/2012 - 14:37 | 2173167 The Alarmist
The Alarmist's picture

Only because they haven't cut the power yet, doofus.

Sat, 02/18/2012 - 17:38 | 2173632 BidnessMan
BidnessMan's picture

What is all this "the grid is going to fail" thing all about?  Absent a major weather event, there is no reason for the electrical grid to go down the day there is a financial event.  Nuclear power plants are fueled for years.  Coal plants have 60 - 90 days of coal on the coal pile at the plant.  And the coal is delivered either mine mouth or by trains.  All of the recent generation capacity additions have been natural gas peaking combustion turbines.  That have underground gas pipelines to the power plants.  And with NG prices at very low prices because of all the new supply from the Barnett Shale and other fracking / horizontal drilling recently, the Combustion Turbines are now cheap as well as fast and easy to spin up.  As long as utilities keep paying the generation operators and the linemen, typical line failures will be replaced.  Most of the electrical grid operates without a lot of human intervention anyway.  There is likely to be financial chaos, but all the "stuff" will still be there.  Just a matter of who owns it.

That said, if the "With my EBT, its Free" crowd in central cities just starts randomly burning down their neighborhood, and chopping down power lines to sell the copper for scrap, all bets are off for all kinds of services including power to center cities.  But that is not where electrical generation stations, or the cross-country transmission lines, are typically located.  The electrical distribution network outside of major cities will be okay, and there are enough Transmission interconnects to route around failed cities.  Despite periodic union grumbling, the average electrical lineman takes pride in keeping the lights on, and quickly getting the lights back on after a storm.  They are not part of the "With my EBT, Its Free" crowd, and I expect they will continue to keep the lights on outside of center cities.  Those guys rise to an occasion.

So let's stop with the "the grid will go down".  Only if a pack of really stupid people destroy the electrical distribution network will that happen.  And it will be local to their neighborhood.  If they crap in their own nest, well there is no law against being stupid. 

Sat, 02/18/2012 - 18:46 | 2173754 kentmills
kentmills's picture

It is hard to pay an electric bill without a functioning currency. No payments means no juice.

Sat, 02/18/2012 - 21:25 | 2174050 A Lunatic
A Lunatic's picture

And good luck growing enough to feed yourself, let alone your family/neighbors/community/State, without a shitload of chemicals in the form of fertilizer, insecticide, fungicide..............Of course maybe all of his food is made at the grocery store.

Sat, 02/18/2012 - 21:55 | 2174079 earleflorida
earleflorida's picture

our nat'l electrical grid is barely out of the 20th century - when's the last time you read up on america's current crises

can't even talk/hand-off electronically to stationary grids within a few hundred miles away in most areas - rolling blackouts as far as the myopic bureaucrats can't see [?], and a change in the weather pattern down south in hurricane season that "Just" might send hurricane alley up the eastern shores into virginia, ny, n.e.,... just like last summer --- jmo

pathetic! ___ 11/4/2010

Sun, 02/19/2012 - 02:43 | 2174417 Vic Vinegar
Vic Vinegar's picture

Yeah but here in Amerikka (LOL) we can still link to

earleflorida keep in mind that fading Jim R is a rather profitable play.  Nothing pathetic about that.

Sun, 02/19/2012 - 02:08 | 2174395 OldTrooper
OldTrooper's picture

Of course, the other side of that is without juice, there's no payments of any kind (no eggs, no FRNs, nothing).  How long can a utility company make it on zero income?  There will be local currencies.

Sun, 02/19/2012 - 04:48 | 2174491 Wolf-Avatar
Wolf-Avatar's picture

I was thinking one step further back from that.

Who is going to be running the equipment if they aren't going to be paid for spending all their time there.

I think it more likely that they will be at home trying to get THEIR stuff in order rather than worrying whether anybody elses is in order FOR FREE.

Sun, 02/19/2012 - 12:08 | 2174840 BidnessMan
BidnessMan's picture

Unless the customer has a functioning smart grid meter, the electro-mechanical meter does not turn itself off just because the bill is not paid.  Someone from the utility has to go out and manually turn off the meter for non-pay. If there are a lot of non-paying customers, that might take quite a while.  And the utility gets no revenue if the meter is turned off.  And hope the customer does not hot wire around the meter to keep their power on.  Just saying how it works in the real world....

Sun, 02/19/2012 - 18:53 | 2175985 malek
malek's picture

maybe you should lower your daily dose of hopium, to see the light

Sun, 02/19/2012 - 19:04 | 2175986 malek
malek's picture


Sun, 02/19/2012 - 01:12 | 2174364 Dirtt
Dirtt's picture

Nothing personal but you FAIL to look at reality.

The premise with solar is that more structures on PV would allow us to wean off fossil fuels lowering the costs of energy.  Except HECO is now jacking up rates "because the number of solar installations is draining revenue" for maintenance of the grid.  Propane is now $6.30 PER GALLON here.

YOU FAIL to recognize that everyone is a fucking LIAR.  The grid will go down.  WHY?  Because they are FUCKING LIARS.

You look at this with a rational mind.  FAIL.

The whole alternative energy scam was never meant to draw down on the grid.  Crap in your own nest?  Where do you live?  I live in paradise and the crap is everywhere.  This has nothing to do with "electrical distribution" and everything to do with the wrath of unintended consequences.

Someone at the FDA is trying to figure out a way to make energy a food group while the Fed is pretending that energy doesn't belong in the CPI.  Good riddens USA.

Sun, 02/19/2012 - 06:42 | 2174528 The Alarmist
The Alarmist's picture

It takes a whole lot of somewhat free and fair exchange for the grid to produce at its current level (even if the end product is not so freely or fairly offered), and as pieces of the supply, generation and distribution channels fail the grid starts to fall away.

At some point people in places like Washington state might get tired of paying high rates because all their power is being sucked away to supplement and subsidize rates in San Francisco, so they cut the lines. What are the Feds going to do? Nationalise the power generation assets in Washington and force the locals into involuntary servitude to run it under threat of jail? Use the Army to run it?

Don't think it will happen? Lou Dobbs is already making noise that the US should stop being the largest exporter of refined gasoline because it keeps US gasoline prices higher than they "should be." Follow that through ... US stops exporting gas to lower it's prices; rest of world stops selling oil to US because they now need to re-source refined products to a more reliable producer, so US now has even higher prices and a far bigger problem.

Sun, 02/19/2012 - 10:41 | 2174673 Absinthe Minded
Absinthe Minded's picture

Oil. If we have it we survive, without it all bets are off.

Sun, 02/19/2012 - 11:28 | 2174733 Clay Hill
Clay Hill's picture

Dear Mr Mertz,

To be fair, I will acknowledge that you have a valid point about linemen and plant operators rising to the occasion when the grid is threatened by weather events. We rise to the occasion precisely because we are well compensated to do so through contract negotiated overtime, and hazard pay. Many of us are motivated to one degree or another by things like patriotism, or pride in our community, but these are a pale shadow compared to monetary compensation.

Keep that in mind as you read on.

Your point about NG and the speed at which new equipment can be brought online is also well taken. However, these projects can only flourish in an organization that is well staffed, well run, and above all well capitalized.

Do you think that a "credit event" involving Sovereign debt will not also rapidly spill over into the Muni market? Do you think my people in payroll, or accounts payable keep stacks of cash in a box somewhere?

I assure you they do not. It is all run by electronic ledger entry the same as the rest of the economy, sir.

Next, I will deal with your misconceptions about how power transmission and repair scheduling is prioritized. Despite the fact that power generation and water treatment plants were usually placed well away from densely populated areas, we had two decades of housing developments incroaching on the buffer areas that were in place when most of these plants were built. There is also the little matter of where most Federal, State, and Local offices are located.

You guessed it... densely populated areas.

Not only is it more profitable for the Utility to return service to the most densely populated areas first, we are under orders to do so by those aforementioned Government authorities. The easier for them to quell any disturbances that may arise from hundreds of thousands of Twitter and Cable TV addicts awakening to find themselves in the middle of the 19th Century. With no food. And no money.

Now for the big question. Do you think that I will cheerfully drive through torchlit neighborhoods passing darkened or destroyed gas stations to repair lines and pumping stations while under fire from an enraged citizenry? For the weeks on end that would be required to get it all back online?

To collect rapidly devaluing or useless paper?

Good luck with that, bitchez.

Sun, 02/19/2012 - 11:48 | 2174786 BidnessMan
BidnessMan's picture

All good points.  And I don't expect you or your compatriots will drive through torchlit neighborhoods while under fire from an enraged citizenry.  Regardless of what any Government Authority has "ordered" you to do so.  I was in New Orleans after Katrina.  No utilities got repaired until after the National Guard restored some semblance of order.  I recall the Sprint cell tower repair guys had to pull back to Baton Rouge when the locals were stealing their tools out of their repair trucks while they were inside the cell tower equipment rooms.  Only returned to New Orleans when Sprint could arrange for Blackwater to send along an armed guard with each repair truck.  

So you guys will repair what you can, where you can.  Which will likely be outside of city centers where there is civil unrest.  Despite whatever "orders" you get from Government Authorities. Don't blame you - I won't be there either.

Sun, 02/19/2012 - 12:41 | 2174942 Clay Hill
Clay Hill's picture

Thank you for the reply.

It was not my intention to be snarky in a personal way, but I do get a bit tired of the "magical thinking" most Americans have about living in a society so heavily dependant on 21st C technology.

For the most part they have no idea how fragile the grid is, even under the best of circumstances. Even now, there are whole sections of my city where we do not go without without armed escort. In daylight. Some of my buddies were called up to deal with the aftermath of Katrina, and I've dealt with being accosted by the public after power loss lasting five days. Not fun.

I see some type of world-wide credit or currency "event" as inevitable, and have extrapolated the cascading effects down to how I will be affected at the local level. That's all.

But all is not lost. Eventually some form of leadership emerges. What worries me is the type of leadership. If it is going to be more of the same, then welcome to the 19th Century, bitchez.

Sat, 02/18/2012 - 14:39 | 2173177 tarsubil
tarsubil's picture

The unique thing about the dark ages is that mankind regressed at the beginning. The logistics of the Roman military disappeared for a thousand or more years. The dark ages were all about slowly and painfully rising from the muck. Another dark age is probably coming. We're hitting our peak or already have. Things will regress and it'll be another slow and painful rise from the new muck.

Sat, 02/18/2012 - 15:32 | 2173280 Mariposa de Oro
Mariposa de Oro's picture

Rise  from the muck we will.  I don't think it'll be a thousand years, either.  Many people are educated and we'll still have technology.  The 'Swipe my EBT, its free' crowd won't be contributing however.  It'll be the 'preppers' and those that remember the 'old' ways.  Even my 23 year old daughter and her peers are getting it.  I don't believe the whole world will go dark/Mad Max.  It may seem like to the 'Government will save us' crowd, though.

Sat, 02/18/2012 - 18:23 | 2173703 xela2200
xela2200's picture

Agreed. The US will do an Iceland eventually. It will take a decade or two since the US is piling on more and more people that will depend on entitlement programs.

One year here in Miami, we had about 5 hurricanes visiting us (Wilma and Katrina). The community became closer. Greed times bring the worst out of people but times of need brings out the best in people. We will see.

Sun, 02/19/2012 - 04:13 | 2174477 Prometheus418
Prometheus418's picture


It may be bad, but I and others are doing what we can, as fast as we can, to collect and store as much information as humanly possible for just such an occasion.  With computer technology, it's amazing how much even one person can collect and store in a Faraday cage.  I am fully aware that that is not a hard copy, but enough electronic copies with the equipment and power sources to run them distributed as far and as wide as possible is bound to shorten the rebound period.  While Alexandria was one location with manuscripts painstakingly copied by a small literate elite, anyone can now store whatever information they feel they may need on SD cards and tuck them away in metal tins.  Tie that to a $200 netbook in a fireproof safe and a solar panel to charge it, and you have a whole library whenever you may need it.

Sat, 02/18/2012 - 14:59 | 2173201 GeneMarchbanks
GeneMarchbanks's picture

He performed brilliantly in the LTCM case. A true patriot, you should hang on every word he utters with all his amazing insights. You should purchase his book on amazon... or you can visit several blogs for free that document the glaringly obvious fact that economics in this century is a replacement for military expansionism.

Sat, 02/18/2012 - 15:58 | 2173362 Errol
Errol's picture

The Roman empire ran out of cheap energy (slaves and tribute from easy conquests); 1000 years of depression followed.

The US empire is running out of cheap energy (easy to exploit coal and oil).  Fertilizer, irrigation, refrigeration, and distribution systems for food are all powered by fossil fuels.  Due to overpopulation, pollution, topsoil loss, and climate instabillity, the depression following the collapse of this empire will likely last for more than 1000 years.

Oh, and all over Europe buried hoards of Roman gold and silver coins have been found; the owners buried them, intending to return for them later.  Just sayin...

Sat, 02/18/2012 - 16:02 | 2173395 trav7777
trav7777's picture

hell, it just rained a mil in gold on some frenchies renovating a building the other day.

Imagine how much worse it will be for silverbugz who would need a fucking crane to move enough silver to buy a nice car with.

Sat, 02/18/2012 - 17:19 | 2173599 BidnessMan
BidnessMan's picture

For most people a Monster box of Silver Eagles is pretty easy to pick up.  Any car dealer would be very happy to trade a reasonable new car for it.

A 1964 90% silver US quarter is now priced at $6 in fiat currency.  A 24X increase over the 25 cents face value.  In a year or two that monster box will likely buy a couple of cars. 

Sat, 02/18/2012 - 20:28 | 2173940 DosZap
DosZap's picture


For most people a Monster box of Silver Eagles is pretty easy to pick up.  Any car dealer would be very happy to trade a reasonable new car for it.

At $35.00+2.50-3.00 prem per coin, @ $38 an ounce, monster box will buy at nearly $20k vehicle NOW.

If the prices rise as predicted I would say maybe 3 or 4...............vehicles will not be in demand.

Sun, 02/19/2012 - 10:43 | 2174676 Gordon Freeman
Gordon Freeman's picture


Forget being logical around here.  You're talking to the End O' The World crowd. They started showing up around ZH about a year ago.  These guys like the whole Dark Ages thing, my friend.  Unfortunately, they drank all the beer, they're hungover and chronically pissed off, and can't find the exit...

Sat, 02/18/2012 - 18:48 | 2173750 xela2200
xela2200's picture

The Roman economy was based on expansion and slavery. Other aspects that brought it down were anti-foreigners' laws (30% of the population were foreigner), xenophobic attitudes which led to the Adriatic wall, and entitlement programs (large percentage of population was actually fed by government). Do any of these sound familiar?

Rome split into two parts. One fared better than the other. If things get bad enough, it would not surprise me to see some states, like Texas, going at it alone.

Roman gold and silver was found everywhere because there is only so much that a person can carry. That means that if things really get that bad, nothing will help you out (land, tools, art, pm, etc). These people were running away for their lives to never come back. So that scenario doesn't "worry" me because I will HAVE to play it as it comes. I am getting ready for a period of financial collapse (default) followed by some sort of recovery where capital will be welcomed again. Iceland is looking much better barely 2 years after default, so it is not inconceivable. Unless, the government goes war crazy, and we have to shoot it out. Then, all bets are off.

Sat, 02/18/2012 - 20:18 | 2173921 Lednbrass
Lednbrass's picture

Anti-foreigner laws didnt bring it down, part of the reason they fell was that after the flotsam of the empire washing into Rome for years too much of Rome was no longer Roman.  They had no connection with it other then a place to live and take for what they could. Once a large chunk of Rome and its army were no longer Roman and had no real connection to it besides a place to make some money it was toast. Immigrants who go to another society and actually blend into it and accept its cultures and values are one thing, those that dont are cultural acid that eats away at the social fabric until it is gone.  Accepting the backwash of the empire doomed them.

Sat, 02/18/2012 - 22:31 | 2174159 xela2200
xela2200's picture

Spoken like a true Roman.

Let's hope things don't become so bad in the US, so you don't have to become ACID in another country.

Sat, 02/18/2012 - 16:09 | 2173426 silvermaister
silvermaister's picture

Blissman you realy are a RETARD

Sun, 02/19/2012 - 10:46 | 2174682 Gordon Freeman
Gordon Freeman's picture

And you are a dumb peckerwood--so I guess that makes you even.

You've only been here 3 weeks, little noob--why don't you cut your losses and fade back into the ooze?

Sat, 02/18/2012 - 17:30 | 2173621 Amish Hacker
Amish Hacker's picture

ManofBliss, I agree with most of what you say, but I wonder if food "will be more accessible during a collapse." In the 1930's, more than 30% of Americans still lived on farms ( No matter how poor, they were likely to have access to food.

Today, fewer than 2% of Americans are farmers, and only 17% of us live in rural areas. Imagine a picnic where 100 people are going to want lunch, but 98 of them don't bring anything to eat. Will they always be able to count on the other two people for their food? Moreover, even basic knowledge of how to farm is becoming more concentrated into fewer and fewer hands, as 40% of our current farmers are over 55 years old (

So in a collapse, I wonder how easily people will be able to feed themselves. Where I live, in the SF Bay area, we have farmers' markets, but most of the produce is trucked in from the central valley. There are no productive commercial gardens anywhere near the Safeway where I shop. All the food comes from far away, in an endless parade of 18-wheelers that roll day and night. If that caravan stops for any reason, shelves will be empty in three days.

We are all at the mercy of a long, petro-dependant lifeline for our food, and right now that lifeline isn't looking terribly robust.

Sat, 02/18/2012 - 14:34 | 2173160 Yardfarmer
Yardfarmer's picture

yeah, it's kinda hard to hang a painting in a tent. 

Sat, 02/18/2012 - 16:12 | 2173443 silvermaister
silvermaister's picture

if you will have a painting not live in a tent 

Sat, 02/18/2012 - 20:17 | 2173911 DosZap
DosZap's picture


if you will have a painting not live in a tent 

No, if you did you would be dead.

Unless its a crappy painting.

Sat, 02/18/2012 - 22:07 | 2174112 earleflorida
earleflorida's picture

vincent was a crappy painter that lived in tents occasioanlly in the mid 19th century,... and then, a oligarchy billionaire had an epiphany that van Gogh was painting his dreams --- turns out the billionaire killed vinny in his dreams

Sat, 02/18/2012 - 15:58 | 2173378 trav7777
trav7777's picture

huh?  The dark ages weren't as bad as you think they were

Sat, 02/18/2012 - 16:36 | 2173502 Zero Govt
Zero Govt's picture

...and Silver will buy more car than you think

Sun, 02/19/2012 - 09:24 | 2174614 davey
davey's picture

If you go back to the 1920's and take a look at the 20 dollar gold piece it bought a real 20 dollars worth of product. Inflation between then and now is at least 1000%. A 20 dollar gold piece is 1/20 th of an ounce. So it is safe to say that one Canadian maple leaf equals 20 by weight American 20 dollar gold pieces. Therefore if you take the current price of gold 1,722 and divide it by 20 you get a value of 86.1 dollars. This indicates an inflation rate of 400%. Ok now if you assume the correct inflation rate the price of a twenty dollar gold piece by weight should be 200.00 times twenty pieces per ounce gives you a fair price of 4000.00 per ounce. Gold certainly under priced .

Sun, 02/19/2012 - 13:25 | 2175082 SunnyDD
SunnyDD's picture

Hehe, How about I trade you some food for gold weight by weight,

That will be the best deal you can get.  

Sat, 02/18/2012 - 14:16 | 2173118 lolmao500
lolmao500's picture

What about war?

Report: U.S. drones flying over Syria to monitor crackdown

Pentagon officials say drones used to gather evidence to make case for international response; 40 Turkish intelligence officials captured in Syria, Assad regime claims Israel's Mossad trained them.

Sat, 02/18/2012 - 14:34 | 2173162 The Alarmist
The Alarmist's picture

Meanwhile more drones overhead coming to a city near you
.. You have less to fear from Syria than from those professing to protect & serve you.

"To Serve Man."
"It's a cookbook!"

Sat, 02/18/2012 - 15:39 | 2173300 Mariposa de Oro
Mariposa de Oro's picture

Worse yet is that most Americans couldn't careless or think its a good thing, my familiy included.  And they wonder why I have no plans to move back there.  Yep, I'm an expat.

Sat, 02/18/2012 - 16:05 | 2173408 trav7777
trav7777's picture

they will inevitably put more black people in jail and be called rayciss, just like the photo radar and red light cameras.

Sun, 02/19/2012 - 03:09 | 2174432 Vic Vinegar
Vic Vinegar's picture

5 junks to zero, soon to be one green to five reds tav.

You bring up great points re: race.  

But what does it matter?  Shit ain't going to change anyway.

If we can have an honest discussion maybe a little less saltiness would go a long way?  Just askin'.

Nevermind.  You have brought more to the table in terms of debate on ZH than anyone else  Fuk anyone who doesn't see that.

Sure, it doesn't matter, but you are still...

Sat, 02/18/2012 - 14:17 | 2173121 hairball48
hairball48's picture

The Benny and Timmy show will succeed too since the "99%" are pretty close to terminally ignorant.

I'm on early SSI and a shakey part time job. My only savings are gold, silver, food, ammo and other non perishables. I just hope I've saved enough to get through what will be a "transition period" the likes of which America has never known.


Sat, 02/18/2012 - 14:18 | 2173122 spiral_eyes
spiral_eyes's picture

The road ends in the end of the American Empire. 

Sat, 02/18/2012 - 14:26 | 2173136 Irish66
Irish66's picture

"Exponential Risk always surprises policy makers" 

I'll be a monkies uncle.

Sat, 02/18/2012 - 14:38 | 2173172 Mike North
Mike North's picture

everything seems to suprise central planners, it's almost like we're beter off with free markets.

Sat, 02/18/2012 - 15:21 | 2173254 Archon7
Archon7's picture

Yeah... everything surprises someone who DOESN'T KNOW WTF THEY ARE DOING!

Sat, 02/18/2012 - 14:34 | 2173159 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

QE 3 hasn't happened yet beause they haven't used the term QE 3.  I'm so smart.  Oh, and Zero Hedge has no idea what they are talking about, beause they aren't eonomists. 

-Jim "Socrates" Rickards

Sat, 02/18/2012 - 18:47 | 2173755 francis_sawyer
francis_sawyer's picture

I wonder what BEET-oven thinks about that...

Sat, 02/18/2012 - 14:40 | 2173173 tim73
tim73's picture Americanos do admit you FAILED! I mean the first round since 1776? But it is a WORLD RECORD of that kind of cycle! It looks like you look like US, EUROPEANS!

Better luck NEXT TIME!

Sat, 02/18/2012 - 15:19 | 2173245 Archon7
Archon7's picture

Yeah, we failed because we tried too hard to be like Europe.

You know what they say about people who live in glass houses?

Sat, 02/18/2012 - 20:34 | 2173950 DosZap
DosZap's picture



If your from a Latin country, you have never won the first time, so I would not salt the wounds just yet.

As for you, better luck the first time.

If it weren't for Governments, 98% of the earths peoples would get along great.Because we would mind our own business.


Sat, 02/18/2012 - 23:10 | 2174215 Chupacabra
Chupacabra's picture


Sat, 02/18/2012 - 14:39 | 2173178 eddiebe
eddiebe's picture

" You don't need a weatherman to tell which way the wind blows."  Bob Dylan

Sat, 02/18/2012 - 16:44 | 2173511 Zero Govt
Zero Govt's picture

isn't that Dylan guy just such a bore?

the most over-rated depressive since that grump, Henry VIII

Sat, 02/18/2012 - 14:50 | 2173192 dick cheneys ghost
dick cheneys ghost's picture

I like Jim and have learned plenty from his writing and his video's......However, he is a little to close to the Treasury and the War Department for my taste.....


Jim claims there will be war with Iran because of nukes when we all know that this is about the dollar and the petrodollars system (which is dying a slow death)

Sat, 02/18/2012 - 15:54 | 2173361 Yardfarmer
Yardfarmer's picture

mr. cheney's ghost, you mean that this crazy bald head is just another shill for the gubmint and the pentagon? geez louise, well i never would have thunk it.

Sat, 02/18/2012 - 15:04 | 2173211 Pumpkin
Pumpkin's picture

The fed is NOT trying to get anything going again.  Allowing banks to barrow at zero and invest in bonds to make a risk free profit is exactly the oppisite of trying to get anything going.  The fed is destroying the Euro IMO.  The Euro was threatening the oil dollar, so the fed turned the Euro's greatest attribute into its greatest weakness, they can't print.  So create an enviroment where, if you can't print, you die.

Sat, 02/18/2012 - 15:21 | 2173249 Motley Fool
Motley Fool's picture

They are indeed playing a dangerous game. The ECB could destroy the FED, if backed into a corner.

Sat, 02/18/2012 - 18:19 | 2173699 nope-1004
nope-1004's picture

The fed is destroying the Euro IMO.  The Euro was threatening the oil dollar, so the fed turned the Euro's greatest attribute into its greatest weakness, they can't print.


+1 Sir.  Spot on.


Sat, 02/18/2012 - 22:44 | 2174182 Implicit simplicit
Implicit simplicit's picture

The ECB has been doing a a lot of bond buying with created euros just as the US did .

Sat, 02/18/2012 - 15:10 | 2173221 zerotohero
zerotohero's picture

In the course of any chaos that might take place one can only hope that those we call TPTB suffer in some form or other be it legal or personal - for every action there is an equal or opposite reaction.

Sat, 02/18/2012 - 15:12 | 2173225 AndrewCostello
AndrewCostello's picture

The people committing fraud will keep that fraud going until it completely collapses, and in the process they will (R)ape the world of it's wealth.


The problem is, most of the population are committing fraud, from the bankers, to corporate welfare, to student loans, to public education, to medicare, to medicaid, to farming subsidies, to artificially devaluing currency for the export industry, and the list just goes on and on and on........


The whole world is living beyond it's means.  Pure and simple.



Sat, 02/18/2012 - 15:17 | 2173238 Eeyores Enigma
Eeyores Enigma's picture

Inflation (increase of money/credit) is happening however only 1% of the population are on the receiving end of it. The 99% are footing the bill in more ways than one.

The price of things is going up primarily because the world is discovering the REAL cost of energy. This combined with the fact that an ever increasing % of the population have less and less money and credit (deflation) creates runaway inequality which can only end in violence.

Sat, 02/18/2012 - 15:29 | 2173272 Archon7
Archon7's picture

End sooner, or end later, but end it must...  only a fool can look at $15T that grows in $1.4T increments annually and have "hope" that someone's going to "change" it.  And such a fool would likely think the same thing about the ~$63T in unfunded liabilities on top of that.  Someone said something the other day that is a perfect illustration of what inflation does to a currency...  a 1964 silver quarter will still buy a gallon of gas.

Sat, 02/18/2012 - 17:10 | 2173569 BidnessMan
BidnessMan's picture

Actually a 90% silver 1964 US Quarter at today's silver price is worth about $6 - so it will buy more gasoline than it did back in 1964.  I still remember paying 24.9 for a gallon of gas at the cheapo gas station when I was a senior in high school in 1972.  

My guess is it won't be long before a silver 90% US quarter will buy even more gas.  Will be interesting to watch the dynamics of depreciating fiat currency vs. the oil producers imperative to sell their oil at some price, because oil is all they have to sell.  Further complicated by fast growing demand from China, India, and the rest of the developing world. We live in interesting times.... 

Sat, 02/18/2012 - 15:39 | 2173293 bobbydelgreco
bobbydelgreco's picture

wrong wrong & wrong again any one that uses that stupid friedman analogy about the thermostat is wrong .... first ben is not as dumb as you think; he does not think he will get the economy started; he knows he has one tool and one tool only devalue the dollar; guess what zhers he will fail; earth to what ever planet you guys are living on the world is falling apart ; as always globaliztion is a disaster; and poor ben won't be able to devalue the world;most messed up place on the planet today? my vote syria; what is it the people in syria want the most today? dollars 

Sat, 02/18/2012 - 15:37 | 2173294 denny69
denny69's picture

As long as one understands that the welfare of the general population is their last consideration, one may be able to effectively plan. The elites and their institutions exist for only one reason - to enhance the wealth of the elites. The only time, that is the only time the general population is genuinely considered by the power structure is when they approach a response which could conceivably alter the situation in their favor, physically alter the situation by either violence, work stoppages or the refusal to participate in the processes that the elites have set up to grab and hold on to our wealth. We do possess deep power, but, sadly, most everything, all of our efforts, in our lives is directed away from this realization.

Sat, 02/18/2012 - 16:08 | 2173383 bbq on whitehou...
bbq on whitehouse lawn's picture

" Some day this war is gonna end". Apocalypse now.


Sat, 02/18/2012 - 17:42 | 2173646 Nozza
Nozza's picture

Sunday 25 March. Greece National Day. Oddly enought, the weekend after Friday 23

Sat, 02/18/2012 - 16:02 | 2173387 JohnKozac
JohnKozac's picture

Excellent book, Currency Wars by Rickards.  I bought one for all (well, most) my relatives this past holiday to help educate them on how the financial system works:


The relatives I don't like?...well, let them continue to watch MSM and go broke the next crash.

Sat, 02/18/2012 - 16:12 | 2173448 GMadScientist
GMadScientist's picture

Okay, proposed settlement of 20% to all bondholders world-wide, debt jubilee for all unsecured debt and mortgages, and move to an SDR with fixed gold ratio and all oil priced in that currency.

NWO, or do we have an accord?


Sat, 02/18/2012 - 16:30 | 2173494 jack stephan
jack stephan's picture

At the height of their fame and glory, they turned on one another, each struggling in vain for ultimate supremacy. In the passion and depth of their struggle the very art that had raised them to such Olympian heights was lost. Their techniques, vanished.

Sat, 02/18/2012 - 19:24 | 2173807 GMadScientist
Sat, 02/18/2012 - 16:47 | 2173525 Sean7k
Sean7k's picture

There is only one solution- though its' expression is difficult to understand: no government.

As long as there are governments, there will be those that use the police power of the state to create an organism they can feed off of. It matters not which system you choose. All systems have a utopia moment and yet, all these systems have fallen prey to the same problem- manipulation for the benefit of the few.

All governments allow for the creation of power centers that can be evolved. The larger the locus, the greater the power and control. Local, County. State, Federal, Global; the difference is only the degree of control. The larger the government, the greater the use of law and regulation, the greater the abuse of power. 

If we cannot create the ability to govern ourselves, within the smallest denominations of power and control, our future will always be some form of slavery. 

Can't imagine a world without government? Try imagining a world without cars, airplanes or the internet. That world used to exist, until someone decided to try something new.

Sat, 02/18/2012 - 17:16 | 2173592 Badabing
Badabing's picture


In order for a utopean society to work, you need utopian people.





Sun, 02/19/2012 - 17:57 | 2175888 IrritableBowels
IrritableBowels's picture


Sat, 02/18/2012 - 17:10 | 2173574 FuentesElla23
FuentesElla23's picture

a best friend's mother-in-law makes $73 hourly on the computer. She has been laid off for 6 months but last month her income was $14399 just working on the computer for a few hours. Go to this web site and read more ....

Sat, 02/18/2012 - 17:17 | 2173594 Badabing
Badabing's picture

No i will not!

Sat, 02/18/2012 - 18:31 | 2173719 Bansters-in-my-...
Bansters-in-my- feces's picture


YOU SAY YOUR MOTHER-IN-LAW paid $73 an hour to be laid and it got her off for 6 months.

But she could afford it because she makes $14399 for a few hours work...

Cool dude....

Sat, 02/18/2012 - 19:26 | 2173815 GMadScientist
GMadScientist's picture

We've already established what you are, my dear; now we're just haggling for price.


Sat, 02/18/2012 - 20:38 | 2173960 DosZap
DosZap's picture


Pls SPAM somewhere must be the sorry ass that SPAMS my email box 100x's a week.With this SOS lie.

Sat, 02/18/2012 - 20:28 | 2173939 SILVERGEDDON

Pussy for nothing, tits for free......... green snot running out of your pecker the next week, no charge. Rental is such a crapshoot.

Sat, 02/18/2012 - 20:39 | 2173959 XtraBullish
XtraBullish's picture

The global outlook is WAY better today than in 1939 so just chill; buy some AAPL; buy some Tinka (silver); and then buy some good quality industrials and wait for the reflation to hit. ZIMBABWE is the launchpad model. To da moon, Mobutu.

Sun, 02/19/2012 - 00:09 | 2174279 jmc8888
jmc8888's picture

The collapse has already happened.  The debt is fraudulent or either case it's worthless.   This is past tense.  The ongoing decay of our physical economy.  This is past tense (and present and future).

It's only smoke and mirrors that is temporarily keeping it together (merely the appearance) in the vain attempt of convincing everyone that chicken shit is chicken salad.

At the expense of everything not fraudulent or worthless they are trying to convince people that the value of chicken shit remains chicken salad. 

They are losing this battle every day (more like a slaughter), meanwhile the neglected physical economy is heading the same way (accelerating after decades straight of declines).

The collapse has already happened.  The (U.S.) physical economy has been contracting since 1968,  it's only the fake metrics that everyone looks at to judge such matters that appears to tell a different story. 

When the official 'collapse' comes, it will really be just a realization of the situation that is already here. 

The answer has never been about avoiding the collapse, it's always been of how we rebuild, and whether we do it before the banksters hold out, austere, and print the world into a mess that few may survive or attempt to do so after (maybe, if possible...and at a much slower pace and lower beginning point).

When a house burns down, the lines of a blueprint inside ones head does not constitute a house.  You have to physically build it.  As for our economy, great works that generate wealth in tandem with scientific progress (real science not statistical charlatans) are the way forward.     It does not matter whether the stock market goes to 0 or 1 quadrillion...the value of worthless debts and fraud remains the's worthless  We're just wasting time as the collapse has already occurred.   We can enjoy free drinks on the Titanic or gather some wood and rope.  The lifeboats are already all accounted for...except the Carpathia won't be picking them up.

All the gold in the world couldn't buy you a computer with internet access fifty years ago.  The same might be said fifty years from now.   So while it is great to own precious metals from an individuals perspective, it's the collective that provides the means to live, or that produce that computer, and maintains and provides content to the internet.  The dislocation that will occur as a result of the realized collapse will prevent many necessities, let alone wants, will be out of the reach of even the wealthiest.   Every person regardless of precious metals will live a poorer life after the collapse is realized.  The unintended consequences of precious metals is that it gives people the belief that come Armageddon they will still get what they want.  Nope.  You'll have the pick of what there is, what was already made pre-collapse, and only until either you run out of precious metals or they're stripped off one's dead body.   A few will survive.  Maybe. A nuclear blast doesn't care who you are.  If one is lucky, they will be able to buy stuff with precious metals for a couple of years, but one should ask how much in precious metals will the last toilet roll on Earth sell for?  This is why even though you'd rather be a bidder for that last roll rather than a dumbass without precious metals, in either case you will be much worse off than now, and would never see in your lifetime what we are capable of achieving if we simply demand the science based physical economic recovery that has always been the cure...right now.  So don't rely on precious metals or weapons to maintain your lifestyle, because it will decrease regardless even in the best #1 case scenario. 

Also don't forget we divided our labor so much that few can live a truly self sufficient lifestyle...and no the separation between these and the rest doesn't justify anything.  But it would come to pass as if it had.  Instead of pulling from the labor of billions, it will be only from within your own physical sphere of influence, and they will lack the same necessities (and knowledge) as you.  Yes man in the 21st century might be relearning the making clothes, finding water, discovering which leaf is best to wipe ass with, so on and so forth. 

The main point is, the collapse has already happened, yet our ability to improve the physical economy and base our economy off of it will never be higher going forward as every day that passes decreases that ability.  Gas is still flowing, food is still growing, and our ability to easily trade our labor for another's (while vastly hindered and is still easy..and you still have access to basically everyone's) can still allow us to focus on the means to reviving our physical economy.  Whether by inflation or deflation or both, the imbalances are too great to overcome a realized collapse somehow within a generation or five (how many generations might it take to get back to 7 billion if we get down to say 500 million?).  If we focus on the real physical economy of science driven wealth creating projects (which are numerous) we could be far more advanced a generation out and not have to risk billions of deaths...deaths that may be realized if things are Bernankified away.  We are risking that everyday we don't switch our focus to the physical economy.  The monetarists risk that every day they continue the scam.   We either dismantle the bomb and cut our losses from being closed for the day or we don't and the bomb destroys virtually everything.  If it's so hard to fix this easy nothing of a problem now (as the problem is not real and bound by the constraints of the universe, it's self inflicted by man for it's belief in sophistry and monetarism), one should imagine how hard it would be after, and use whatever authority one has as an individual to push for a switch in focus to the physical economy,


Sun, 02/19/2012 - 00:37 | 2174320 oldman
oldman's picture

@ JMC,
Dude, that was a long post for an oldman, but worth the effort.
Thank you!
The collapse has already occurred. The opportunity for collaboration is growing for now, but as you point out there may come a day when the ease and the means to revert to a more sane way of being will begin to diminish and opportunity will pass us by.
A question for you off the topic, JMC.
If the polar caps melt where will the cold go? Will the released CO2 absorb it as in 'dry ice'? I ask this because the temperature of the planet is extremely stable and has been for 12,000 years----the cold moves around, but T. is pretty constant
Anyway thanks again om

Sun, 02/19/2012 - 03:53 | 2174433 devo
devo's picture


Allowing banks to borrow at zero and invest in bonds to make a risk free profit

Let me ask you a question: intuitively and logically, does the system you just described make any sense?

The only way there is a "profit" in your scenario is if the "return" has more purchasing power than the money borrowed. Nominal profit is not necessarily a profit. The very act of borrowing the money and putting it into the money supply decreases the value of said money or profit via inflation. Said another way, borrowing money interest free and getting a 3% return on a bond when real inflation is 4% (more likely 8-10%) is a loss. The idea that banks are making money is misguided unless you only view money nominally. If you view it's purchasing power they're (a) losing money and (b) contributing to their loses by borrowing/inflating. I view the current fed/bank agreement as a deflationary cycle because it causes nominal prices to rise while their value actually decreases. That decrease is deflationary. Counter-intuitive, I know. The thing is, when market forces wake up people up to this fact, this there is going to be a massive collapse. Many asset prices could near zero (think Tulip Mania) along with fiat currencies. It's why gold is so important. It'll drop nominally, but it will retain purchasing power relative to paper currency and most assets.

Sun, 02/19/2012 - 07:07 | 2174543 scragbaker a ca...
scragbaker a cape cod clamdigger's picture

I can see that this article has hit a nerve.  Benign inflation my ass !  Food and gas prices are up more than 30% in a little more than one year.  The few food items I can find that have not increased in price come packaged in smaller packages - they must think we are all fucking stupid - and yet we continue to buy the stuff anyway. And, I don't know who the author of this article thinks "gets an increase in pay" these days ?  Almost everyone that I know personally is making less today than they were a few years ago - and inflation is wearing their resolve down to nothing.  People are getting tire of 'going backwards' and are starting to lose hope / faith that things will get better soon. 

Sun, 02/19/2012 - 08:33 | 2174592 egoist
egoist's picture

There is no escaping it, if you have it, they will come to take it. Put yourself in congress' / president's shoes. They have this out of control debt - it cannot be stopped (in my view) b/c there are too many coupled systems in play to turn any of them down (let alone off). These cornered animals have no recourse, they need to keep pouring "money" on this thing until there simply isn't any money. Who has money? Where are buckets of money? "what kind of crook / tax cheat would hoard gold, after all?"

Sun, 02/19/2012 - 11:05 | 2174700 Badabing
Badabing's picture

When you say "Tax cheat" do you mean the hidden tax of inflation?

Sun, 02/19/2012 - 23:16 | 2176662 split4to1
split4to1's picture

Well in regard to Gold I think it's clear to see from this chart where its going AH-XAU/USD 

Wed, 02/22/2012 - 04:36 | 2183997 sikefeier0728
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