Guest Post: Exiting The Eye Of The Storm

Tyler Durden's picture

Submitted by Doug Casey of Casey Research

Exiting the Eye of the Storm

L: So, Doug: London has suffered more damage from recent rioting than from anything else since the Blitzkrieg; the stock market had its most volatile week in years; gold shot well north of $1,800; and the U.S. government almost crashed into its debt ceiling. Smells like blood in the streets. What does a street fighting man like you make of all this?

Doug: Well, it was about 40 years ago in 1971 [laughs] when I read Harry Browne’s first book, How to Profit from the Coming Devaluation. In that book, Harry said that if gold went as high as $200, it would be a sign runaway inflation was coming, and readers might need their survivalist retreats, etc. He was actually right about everything he said in the book, and for the right reasons, but things didn’t get as bad as quickly as Harry thought they would.

That just goes to show that if you predict any particular number or outcome, you should not say when it will happen, or if you predict a time for important events, you should not say specifically what will happen.

Anyway, I’m very uncomfortable predicting serious gloom and doom for two reasons: One, most individuals intuitively look out for themselves by producing more than they consume and saving the difference – so the amount of net wealth in the world grows. Two, technology continues to improve – Moore’s Law and all that.

L: I’ve heard you say that before, but you’re the guru, so you don’t get off so lightly. What do you feel comfortable telling us?

Doug: My sense is that we are definitely exiting the eye of the storm at this point, and we’re heading back into the raging winds of financial, political, and social turmoil. The riots you see now are just an indicator of what’s ahead – an appetizer… hardly the main course.

L: That’s a pretty bold statement, Doug. We’ve been talking about the so-called recovery really being nothing more than the eye of the financial storm that hit in 2008. But the U.S. and other governments around the world have been able to animate the corpse of the 20th-century economy and keep an appearance of life in its zombie motions longer than we thought possible. To say we’re exiting the eye of the storm implies that zombie is going to stop moving and the smell of decay will soon overpower everything else. Are you ready to make that call?

Doug: You’re asking me to do what I just said was unwise: to say both what and when. But yes, it does look grim to me. With the markets fluctuating so wildly, the Dow going up and down hundreds of points per day, that’s very likely to spook the government, investors, business managers, and consumers even more than they already are. Normally I don’t pay much attention to consumer confidence; it’s an emotional state, and emotions can change in a New-York second. But at this point the economy rests on nothing more substantial than confidence. It’s a confidence game. And confidence can blow away like a pile of feathers in a hurricane.

L: So what we’re looking at is not just a bump in the road. It’s going to change priorities and marching orders for market participants – and for those who interfere in the markets in various ways.

Doug: Yes. It’s the kind of thing that accelerates a negative spiral, in good part because everybody wants the government to “do something,” in the idiotic belief that it can improve things by doing more. Actually it can only help by doing less.

L: So… the economy slows more. Why can’t the government reanimate the corpse one more time, turning up the juice on the stimulus heart-shock paddles?

Doug: They’ve already created trillions more currency units. Most of these are currently sitting in banks rather than circulating. That’s partly because people are afraid to borrow and banks are afraid to lend, but also because the Fed is paying banks interest to keep what are considered to be excess reserves locked up. So these trillions of dollars that were created to bail the banks out are sitting there, but they’re not going to sit there forever. Once those dollars start circulating in the economy, prices will rise rapidly.

The other way for prices to really explode would be for the foreigners holding some six or seven trillion hot-potato dollars to start dumping them. With the U.S. government clearly unable to deal with its debt and the consequent credit rating downgrade – which was both inadequate and long overdue – those foreigners are getting pretty nervous holding dollars. Almost any sort of financial calamity could spook some central bank into exiting its dollar position wholesale. And once one of them starts, the race will be on, because no one is going to want to be left holding the bag.

These are two time bombs that are ticking away right now – the trillions of dollars outside the U.S. that could come pouring back in, and the trillions of dollars inside the U.S. that were created to paper over the leading edge of the storm. Either of those things could bring on the end of the dollar as we knew it, and both may well happen at once.

L: Okay … But the state has been very good at convincing people to pay no attention to the man behind the curtain. If the markets settle down, why can’t people go back to imagining that everything’s fine?

Doug: I’m not sure that many people really ever believed there was a recovery under way. Wall Street acted like there was – but only somewhat, since banks never started lending again. But unemployment has remained high; it’d actually be about twice the official 9% level, if it was calculated the same way it was 30 years ago. And outside of the price collapse of certain asset classes – like real estate – the cost of living has increased greatly for most people; the calculation of the government’s CPI is as corrupt as its unemployment numbers. I think it’s a mistake to talk about a double dip in the economy; we entered the Greater depression in 2007 and are still in it. A “jobless recovery” is not a recovery. The only thing that’s recovered is the stock market, to some degree. Aside from government hocus-pocus, the mirage of corporate earnings, and foolish investors wanting to believe it was safe to get back in the water, things have not gotten better. And they are about to get much worse.

L: That may be so, but the government, the press, and corporate America have all been talking about a recovery. With the Fed promising easy money, if the markets calm down, couldn’t the illusion of recovery be reestablished?

Doug: I don’t think so. The economy isn’t going to stay in the eye of the storm for much longer. The stab of panic we saw last week gave lie to the emperor’s new recovery clothes. It’s not just the losses on the stock market, but gold hitting significant new all-time highs in nominal terms, and Bernanke saying that the Fed would hold interest rates close to zero for another two years. That’s huge – and a huge mistake. It tells me that Bernanke has truly panicked. The impact this will have on the dollar cannot be overstated; it’s a guaranteed disaster. It assures that people will do all sorts of things they would not do without that artificially easy money.

L: Okay, but if they go into debt to buy houses and cars, they’ll create jobs and there will be more appearance of recovery, won’t there?

Doug: That’d just be digging the hole deeper at this point. What needs to be done is to let the market raise interest rates, to encourage savings – the accumulation of the capital needed to start moving forward on a solid basis. Instead of encouraging people to work, spend less than they make, and save the difference, these low interest rates encourage profligacy. They encourage people to liquidate savings and live above their means. As usual, the government isn’t just doing the wrong thing, it’s doing the exact opposite of the right thing.

L: Because...

Doug: Because of the false belief that printing money stimulates the economy. The artificially depressed interest rates of today will result in very high inflation and very high interest rates in the near future. A healthy economy gets naturally low interest rates as a result of a lot of savings, a lot of capital creation. A healthy economy has stable interest rates that relate to the amount of new wealth being created, typically just above the natural rate of inflation that results from real money – gold – being mined out of the ground. Artificially low interest rates stimulate malinvestment.

The Fed is also keeping rates low because of the government’s massive debt problem. The U.S. is already running trillion-dollar deficits – if interest rates go up, say, to 12% like back in the ‘70s, that would add another trillion to the deficit right there. Financing a $16 trillion debt at 12%, rather than 2%, equals another $1.6 trillion of spending – just for interest.

This really means they have no choice. The situation is completely out of control – the U.S. financial house of cards is irredeemable at this point, even with interest rates at close to zero. The whole financial structure is close to collapse, and that’s why I think we’re exiting the eye of the storm.

L: The Titanic has been struck, but Captain Obama just doesn’t yet realize how badly?

Doug: Exactly. And – adding insult to injury – not only are they doing the opposite of the right thing, they are actively punishing people who did the right things, who worked hard and saved. Pensioners living on fixed incomes are being forced to reach for higher and higher yields, which means they are being forced to put their nest eggs into riskier and riskier investments. This guarantees that the pensioners and the savers will be wiped out.

L: Unless they put their savings into gold.

Doug: Sure, but nobody but crazy goldbugs even thinks about that. And it gets worse: The current course guarantees the total destruction of the U.S. dollar. Again, I cannot emphasize enough how serious this is. People all around the world save in dollars. If the dollar is destroyed, it won’t just be Americans who’re hurt, it will be all the hard-working people around the world who’ve struggled to scrimp and save and put money away for future needs. All these people who were wise and frugal, they are going to be wiped out. They are going to be left with absolutely nothing. This is criminal – it’s the stuff revolutions are made of. And that’s exactly what I expect we’ll see plenty of, all around the globe.

L: Seems so clear – what could they possibly be thinking?

Doug: Perhaps Bernanke’s making the same mistake people with maxed-out credit cards make, when they think hyperinflation will wipe out their debts. They forget how nasty, brutish, and short life can be in a society in a hyperinflationary collapse. And think about it: What happens if you wipe out these debts? Who are the debtors? They are the most profligate people in society. So these artificially low interest rates reward the most irresponsible and punish the most responsible people in society.

L: Absolutely perverse.

Doug: [Chuckles] Took the words right out of my mouth.

L: Easy enough to do in this case.

Doug: Well, there’s your answer. What’s going on now really is creating the foundation for revolution, and not just in the U.S. The riots in London and Chile, and other outbreaks of chaos around the world aren’t anomalies – they’re a warmup. An overture before the symphony starts. Things will be especially bad in British and European cities, where there are millions of people who’ve never worked. Ever. They’ve just lived off the state.

L: Maybe we’ll hear the music on November fifth.

Doug: “Remember, remember, the fifth of November…” That would be interesting indeed. Readers should rewatch V for Vendetta to put them in a proper frame of mind on how serious things are. I mean… it is going to be a time when Street Fighting Man will be a most appropriate theme song. Turn up your speakers.

L: I agree with you, Doug, but I have to say it makes me a bit nervous to come out and say we’re exiting the eye of the storm. The powers that be have proven far more adept at keeping the balls they are juggling in the air than I ever thought they could be. Every time I think it can’t get worse without things coming apart, it does get worse, and somehow things don’t come apart, they keep going.

Doug: Of course. As I started out saying, Harry Browne’s prediction 40 years ago was essentially the same that I’m making today. Harry was a bit early – and I was too, in 1980. But this time really is different, with so many unprecedented actions and reactions between the market and the state. I truly see no way out for the state this time, and it’s going to be much, much worse than it would have been had it collapsed back then. I can’t say for sure exactly when things will fall apart, but I’m more convinced than ever that they will, and that we are about to plunge deeper into the Greater Depression.

L: What if you’re wrong?

Doug: I honestly hope I am, because if I’m right, the global economic devastation is going to have a very real and significant death toll. The price in human suffering these fools in government are setting us up for is truly monstrous. As a human being, of course I’d rather see good times.

L: But as a speculator…

Doug: Yes, as a speculator, I know the crisis will create phenomenal opportunities. If we lived in a stable society, with a stable monetary order and a non-predatory government, it’d be impossible to be a reliably successful speculator, because there’d be few or no politically induced distortions in the economy to take advantage of. So, always looking on the bright side, we can look forward to many new bubbles to result from the state’s massive interventions today and in the future.

L: Such as?

Doug: There will be a huge bubble in gold ignited, and maybe soon. That seems pretty much baked in the cake at this point.

L: That’s interesting. A lot of people say gold is already in a bubble – that the recent surge up to $1,800 per ounce is a sure sign of that. But you’re saying it hasn’t even started yet?

Doug: Well, I hate encouraging people to buy gold at $1800 an ounce, because that level is already more than 700% above the bottom in 2001, and I’m a bottom fisher. I like bargains, and I can’t call gold a bargain today. But it’s plain as day that gold is going to go higher. There’s simply no other place for people to try to safeguard their wealth as the dollar, euro, and other currencies plummet toward their intrinsic values. What else could people buy as they get more and more afraid of paper currencies losing acceptance? What are corporations going to do with the billions of dollars in their treasuries when their management gets frightened? Where else can they go when they need to get rid of dollars, euro, yen, and yuan? Central banks, too – what will they do when they need to dump dollars in favor of something that will hold value?

This is why I see a bubble in gold still ahead. It has nothing to do with the supply and demand for gold in the jewelry trade, or whatever – it’s going to be a result of there being no viable alternatives when the paper-money con game is over. Gold is the ultimate cash, and that’s where people will go when there’s a global, total, panic to cash.

L: Agreed. Other investment implications?

Doug: Gold mining stocks. Most good ones aren’t bargains, even though they’ve been lagging gold in recent trading, maybe because of the fear in the marketplace. But they’re going higher.

L: Of the two major forces that drive markets, greed and fear, which do you think will predominate going forward? Because there are different buying patterns, depending on whether it’s greed or fear in the driver’s seat…

Doug: You’re quite right. I think it will be a market driven primarily by fear for some time, and that will favor profitable producers, emerging, high-margin production stories, and maybe the best of the best explorers advancing projects with obvious merit towards production. Nobody buys the risky junior exploration plays when fear is driving the market.

L: Except a bottom fisher.

Doug: Except a bottom fisher, yes. There will be some fantastic opportunities in earlier-stage exploration companies that will get smashed because of fear. But speculators looking for those have to be patient. Many junior explorers will dry up and blow away during the fear-induced drought. Eventually, the best will come roaring back when the bubble inflates and the real mania phase of this bull market kicks in. Then, everything with “gold” in its name will trade at ridiculous premiums, even the crappiest juniors whose only gold is in their name.

L: How long before greed kicks back in?

Doug: There you go asking for a time as well as a prediction again. I don’t know, but it could be a while: A lot of greed has been washed out of the system with the big panic of 2008, the real estate collapse, and the stock market really going nowhere for the last ten years. Plus, when the bond market collapses, as I think it will, that will be the final blow. That’s really The Big One on the horizon these days – the bond market is three times the size of the stock market, so a major reversal there will cause enormous damage.

L: So, stay away from the junior explorers?

Doug: Just the crappy ones – and as you well know, 95% of explorers have nothing and never will have anything. But there are some which actually have gold or silver in the ground – or clear drill indications that they are close to being able to report having such assets – the kind you specialize in finding for the International Speculator. Those stocks are going to benefit from the flood of money hitting the precious metals sector. Remember, the whole gold market is trivial in size. It’s only a tiny fraction of the oil patch, and not even a rounding error compared to the global market. When the average investor wakes up to the need to own gold for safety and the potential profit from owning gold stocks for leverage to gold, it’s going to be like trying to fit the contents of the Hoover Dam through a garden hose. Prices will go ballistic, and there will be plenty of money hitting even the smaller juniors that have good stories.

L: Good reminder about safety.

Doug: And that’s another factor that will be driving the price of gold: It won’t just be speculation, it will be prudence – the flip side of fear. Prudence will drive people into buying more physical gold. Greed will drive people into gold stocks. I own a lot of physical gold already, but I’m still buying, even at these levels. And I own a lot of gold stocks, but I’m still accumulating those too, when we dig up good opportunities.

I look forward to seeing the pictures I know you’ll take on your next rock-kicking expedition, trying to dig up one of those good opportunities. ‘Til next time.

L: All right then – ‘til next time.

[The dollar crisis Doug alludes to isn’t some far-fetched, distant possibility: It’s very real, and it’s in progress now. Join Casey Research in a free online event – September 14 at 2 p.m. Eastern time – to learn more about the American debt crisis and how to protect yourself from the coming storm.]

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reader2010's picture

In a world of illusions, you want to hold the real thing. 

AldousHuxley's picture

When there is no real thing anymore as a choice, you just have a choice between illusions.

Just take human relationships for example: internet just replaced TV as sheeple's illusion dispenser: "Friends" TV Show --> Facebook "friends"

 

 

CosmicBuddha's picture

Yes, but the internet also gave us ZH; at least now we can craft our own illusion!

AldousHuxley's picture

ZH is giving us nothing new just a different format.

 

In the olden days, without ZH, people will gather in the city squares and talk in real person, then protest in the streets and hang a few necks.

 

To the elites, ZH lets the steam out without damaging their property. All talk, no action.

theMAXILOPEZpsycho's picture

yes this explains tylers showing at the bilderberg group...

in the old days doom and gloomer freaks had no where to find instant day to day information and share it with like minded individuals

so lighten up!

and I'd rather save my own ass than have a revolution

AldousHuxley's picture

The fact that you need information to discover the truth means your ass is all virtual and worthless and not part of the special elite.

 

 

 

 

theMAXILOPEZpsycho's picture

laughable!

ah yes O you who have no need for information and recieve everything directly via your all seeing eye!

AldousHuxley's picture

bloomberg can get you the details, but anecdots can tell you generally how bad it is out there sometimes faster and more truthfully than a trend analysis by a government/financial entity.

 

  • Inflation: your gocery shopping costs and decreasing size/weight of contents; gas station
  • Housing: sell signs everywhere in front of houses
  • Federal Government: last presidential candidates were  either black, women,  or now-or-never old
  • State Government: state parks closed, DMV open fewer days
  • Local Government: cancelled fireworks on Fourth of July
  • Small Business: Office Depot has one guy working in the whole warehouse every visit
  • Unemployment: Hotter women are serving food and beer
  • Construction: no more illegal Mexicans at home depot parking lot.
  • Auto: car part store parking lots are full (people aren't buying new cars)
  • Education: more and more calls from your alma mater asking for money
  • Entertainment: NFL players are on strike. There is nothing good on TV anymore. Recycled movie ideas.
  • Retail: tons of luxury vehicles at walmart/budget retailers
  • Youth: kids at home after college or got jobs overseas or working at same place their parents work

 

 

 

smore's picture

Please leave your droppings at http://www.socialistworker.co.uk, they will be appreciated there!

Rockfish's picture

How can you spot a moron ass? By what they say, "

  • Federal Government: last presidential candidates were  either black, women,  or now-or-never old "
  • Tard.

    AldousHuxley's picture

    You didn't know? You tought American elites would just give it up so easily?.....they let a black guy take the fall (you know one of those once in a 100 year depressions), then blame him for all the society's ills and when economy recovers, become president and take credit.

     

    Forgot to add:

     

    Banking: Jews (Rubinites) give up control of banks and give it to some Indian (actually bribed him by overpaying his loss running hedge fund to the tune of $300M)

    NumNutt's picture

    You are 100% correct, the items you mention are the same things I take notice of when I am out and about. Today I noticed a retired couple driving a brandnew caddie shopping at the local dollar general store. I have been talking to  people that own houses, I am surprised to find out the majority are in the process of walking away from them. Not to mention at my place of employment we are slowly loosing people and they are not back filling the postions, we are running very short handed with no end in site. The only people I know that are not seeing the sad state of affairs are either employed by the government or are union workers. Everyone in the private sector are bent over holding onto their ankles at the present time.

    Joseph Mother's picture

    Aldous knocked it  out of the park. 

    Take a step back from 'reality' and look around you.  That's pretty much what you're going to see, at least in the US today.

    AldousHuxley's picture

    Here is a Euro zone version:

    • Inflation: Cold bottle of cola is 4 Euros ($6); gas is near $10/gallon;
    • Housing: don't know about personal homes, but hotels were all overrated. 5 star US hotel chain for $600Euros/night  ($1000pn) when even in Manhattan it would be max $500/nigiht
    • Federal Government: They are socialists but still charge capitalist prices for education in UK now.
    • State Government: Airport taxes are $100+pp
    • Local Government: tolls > than cost of rental car; public transit strikes
    • Small Business: Shop keepers and restaurant wait staff are in their late 50s & 60s doing the job young mexicans in US do. (economy didn't expand enough for owners to delegate work and hire)
    • Unemployment: In Germany, they already do what Obama is looking to do. Government subsidized "internship" while getting paid with unemployment benefits BUT you don't count in unemployment statistics to make politicians look good. Switzerland started to restrict German migration.
    • Construction: Havent' built much. Still living in buildings built 400 years ago. German architects now work in Poland.
    • Auto: Small, loud(diesel), and manual (for that extra 2 MPG efficiency)
    • Education: In Italy, Engineering graduate school students in school were in their late 20s (28, 29) for just masters (BS MS is combined there)
    • Entertainment: BBC showing middle east uprisings and saying Prince William cancelled his honeymoon to go hide out in some remote British Falkland Islands so no crazy arab will kill him. Or recycled American shows in British accents.
    • Retail: people in Paris luxury shopping were mostly Arabs or Chinese or Russian. VAT (sales tax) is 20%.
    • Youth: There are more white kids than blacks in recent riots.  Irish are getting the heck out, British are getting the heck out to Australia or America.
    theMAXILOPEZpsycho's picture

    OK, now tell me how that doesn't qualify as information...

    OldPhart's picture

    Link to 'anecdots' mentioned, my Google seems to gargle it.

    GFKjunior's picture

    I'll be sure to revise my fund strategy from looking at technicals to obveserving the "hotter women serving food and beer" or the ever faithful trend indicator of "nothing good on tv anymore"

    smore's picture

    This "you are not special" hogwash is only a comprehensible line of argument to you, Aldous.  It's glaringly obvious that you haven't felt the need to inform yourself on much.  You are a twit.

    DaBernank's picture

    How do you know I didn't kill a banker today?

    OldPhart's picture

    You'd be bragging.  And the rest of us would be cheering.

    iDealMeat's picture

    Going to have to disagree with that... 7 years ago I bought a gold coin because my dad was into them and I thought it was pretty cool.

    Now, primarily because of ZH, I regularly follow PMs and BTFD whenever I can..  ZH and PMs have also fundamentally changed the way I look at all other investments..

    I've also cut my consumption in half and learned a some things about survival.. 

     

    no action ie. (no participation) in TFTB will devalue their properties..

    New_Meat's picture

    Hux, in my best Parisian accent, I say: "Au Contraire, Monsieur."

    "ZH is giving us nothing new just a different format."

    The difference is that there are folk (n'est ce pas?) who are from all backgrounds, all regions, all persuasions (but all engaged here) who would never have been able to get to the "city square".

    Vigilante justice?  Not here.  Not by the Tea Partiers.

    Why do you advocate violence?

    But, Monsieur, perhaps this is your album of desire:

    http://www.amazon.com/Agent-Provacateur-Foreigner/dp/B000002J5Z/ref=sr_1...

    might help u through the night.

    - Ned

    {If I were quoting ma grandmere, I would have said: "Au contraire, Meathead."}

    AldousHuxley's picture

    Why do you advocate violence?

     

    Simple. Wall st. owns US government. Government exists to maintain the status quo.  

     

    If you look at history, status quo continues until forced otherwise. Do you see north koreans protesting Kim Jong Il's dictatorship? Things can get very bad my friend.

     

    Your only other solution is to leave the system, but unlike political tyrants, banksters are already global so no, you can't leave the gang.

     


    New_Meat's picture

    Au contraire-Meathead - Ned

    reader2010's picture

    Marc Faber famously puts it this way: to hold paper is to trust central bankers; owning (physical) gold is to be your own central bank.

    unununium's picture

    Get some bitcoin and you can also be your own Wells Fargo, and Western Union.

    AldousHuxley's picture

    Better put it somewhere safe. Bank safety deposits are no good..." During the 1930s over 3,000 banks failed and the contents of their safe deposit boxes were remanded to the custody of the Treasury. If no one claimed the box it remained in the possession of the Treasury."

     

    Interestingly, "As of October, 1981, there were 1605 cardboard cartons in the basement of the Treasury each containing the contents of an unclaimed safe deposit box[ of gold]"

    PRO.223's picture

    In a world of illusions, you want to hold the real thing.

     

    reader2010

    That's really funny - considering your avatar.

    reader2010's picture

    My avatar is a condensed version of John Currin's painting titled 


    The Wizard 1994

    http://farm7.static.flickr.com/6070/6053603790_df1925f02f_z.jpg

    CosmicBuddha's picture

    I am long on wheelbarrows and gold!

    toady's picture

    Coke, its the real thing!

    bankrupt JPM buy silver's picture

    CHECK OUT THE NEW ETF by the morgue.

     

    Ticker: ERQK

     

    All you have to do when there is an earthquake in Manhattan is hit it long, and its correlated to all the bank stocks that will rally, and you can hedge the downside in PM's as it buy PUTS on auto for you.  In fact, if you put your dick in the C drive of your computer, and continuously click enter on your keyboard it gives free happy endings all day long.

     

     

    Praetorian Guard's picture

    There will be NO exit. Think about this for a second - As a society we have hit our apex, what more is there to derive? Cheap electronics or gadgets that make life easier? Society, in general, based on the advancements of man have created billions of parasites - this especially true in Western countries. The only way to have REAL growth is to A) cull the population WAY down, or B) society collapses and a rebuilding of both infrastructure and technology takes place. Look at past examples of massive death attributed to man made or natural causes. These events left room for growth. Even when Rome fell, and lost its luster, it took centuries for man to revisit the technology of old - thus growth was inevitable. Today, unless we can colonize some planet and mass ship people out into space, nothing really is left when you juxtapose population with resources. The shit is coming, bet your last dollar on it, and TPTB realize that to have a "bright" future many within the population fold will have to disappear. Scary times. Got Guns, Grub and Gold???

    https://www.gunsgrubandgold.com/forum

    Kat's picture

    Every generation thinks its hit its apex.  what more can we want than what we have now.  Yet, we keep reaching for and acheiving more.  This was the blindness of Karl Marx.  So, I can't agree with you on that.

    Resources too are not a problem.  The only natural resource is the human being.  Oil is useful only because human beings have made it useful.  If human beings discover some new fuel or ways to not use fuel at all, oil will just be sludge ensconced in underground rocks.

    As long as government does not force the most productive to subsidize people who are too lazy to lift a finger, as long as it is necessary to still work to live, we will innovate and life will improve.  Necessity is the mother of invention.  But, that requires a collapse of the welfare state - or a move to Asia.

    Travel to Singapore and see the enthusiasm and activity, the people starting businesses, creating things.  It's exhilirating. 

    Europe and now America have re-enserfed themselves.  We have all become serfs of the state.  Cut down the state and the welfare queens and watch prosperity return.

    Praetorian Guard's picture

    Resources are a problem. The population could be considered unlimited (though in reality it is not), yet resources are not. Look at the turn of the century oil/population charts and see how they compliment each other. I agree about the welfare portion. However, if every Asian and Chinese were to live as a westerner would require several "Earths". There simply is NOT enough resources to go around. As a species we have hit the limit. We have been here before, but time takes its toll, and our "time" is no different.

    rwe2late's picture

    Your self-congratulatory philosophy is worse even than coarse Puritanism.

    You wrote "The only natural resource is the human being." That is patent nonsense.

    Your worship of work and advocacy of it as an ultimate moral yardstick is also nonsense. Leisure should not be held in such contempt. The goal of work should not be more work.

    Your whole notion about government is upside-down. Government does not hand out its largesse based on who is the laziest. It is given other criteria by its TBTF and MIC 'recipients'.

    Most government waste is also military related. 60% of federal civil servants work for the military, Homeland Defense, or the CIA).

    Do consider, much non-military government so-called 'extra' overhead has to do with maintaining records and reporting for public accountability ... which is a VITAL thing for democracy to work. The useful public sector also strives to provide service to everyone, without exclusion. Private businesses can and do typically conduct their business in secrecy, and aim to exclude services (education, food, water, medical care, etc.) whenever it is 'unprofitable' to provide.

    Actually, of course, what is implicitly meant by private sector ‘productivity or wealth creation’ is profit-making.

    Consider the idea of ‘profit’.

    Profit is a man-made concept. It is a limited concept. Profit does not and cannot measure the worth of every and all things, nor can it be the ultimate guide to human conduct. The concept nonetheless underpins the whole notion that the pursuit of micro self interests will result in the best of all possible worlds. And it is that mistaken notion which is often used to justify the worst of all outcomes, and pronounce that the solution to our miseries is to increase business profits.

    Never mind the profits made by ruining forests, rivers, and oceans. Never mind the profits from destroying the fisheries and polluting the air. Never mind financial parasitism. Never mind sweatshops, child labor, and poisoned foods. Micro profit, it seems, does not measure the environmental losses to society, nor the debilitation and destruction of human beings. But yet, it is to be the ultimate arbiter of human conduct. Or so we are told.

    A system based on maximizing work, maximizing production, maximizing consumption becomes outdated in a finite world. It values neither leisure nor the quality of life, human or other. The corporation is the apex profit-driven organization of a misnamed and impossible “free market”. It is elitist, with a narrow single-minded goal, and disdainful of all that stands in its way.

    Government, like corporations, has evolved around the pursuit of profit. Government has become to be like corporations, autocratic, secretive, and obsessively entangled in the furthering of corporate profit-making, to the detriment of all else.

    OldPhart's picture

    Which Post Office do you work at, specifically?

    Seer's picture

    Way to engage in the debate- NOT!

    Seer's picture

    Fucking FAIL!

    Finite planet means finite resources!  Further, it's about rates of consumption.  Yes, stuff is still here (the future is in mining garbage dumps),  but it'll require a LOT more energy to rearrange the atoms back into forms that we need to operate our societal constructs.  The sun outputs only so much energy on a per-day basis, there are limits! (the argument that we can harness more than nature has managed to do over the course of evolution's billions of years history is pure crap- what, that would place us on a plateau with "god?")

    Your position is indistinguishable from that of those following the head-in-the-clouds hopium delusion.

    AldousHuxley's picture

    Have you read my book Brave New World?

    • Churches turned into mass orgies (birth control + bars & clubs + casual multiple partners)
    • Government passing out drugs to keep poor happy (California is close with marijuana legalization, alcohol is already legal)
    • Workers conditioned to accept their role in society (celebration of ghetto culture)
    • Destruction of families (extended family --> core family --> every man for himself)
    • Government raising human resources (test tube babies raised not by mothers but by social workers)

     

    It only ends when one of the Alphas uncovers the truth about his aritificial life and ends solitude with a suicide.

     

    " people believe what they have been conditioned to believe"

     

    And this masterpiece was written back in 1931.

    Kat's picture

    Do you realize that Brave New World is a work of fiction?

     

    I am an immigrant from the Soviet Union.   I've seen what happens when society is edged close to the edge of the cliff and it's ugly.  But, for that, you need government.

    It is government that gets in the way of human innovation, peace and prosperity because government is a massive parasite. 

    GoingLoonie's picture

    Kat-

    Now that is reality.  The truth is that is what is happening now.  The government is getting ugly.

     

    Lord Koos's picture

    Maybe you should try living in Somalia for awhile to see how much you like living with no government at all.

    AldousHuxley's picture

    Somalia = shithole = no government

    North Korea = shithole = all government

     

    It is not a quesiton of how much government you have because there always will be some body of governing power whether it be military thugs are ruling family supported by foreign banksters or corporations. It matters how corrupt and efficient government is with nation's natural and human resources. Level of government just amplifies the effect. In case of Japan, government got people out of war loser status into first world. In case of recent US, government is getting people into losing wars.

    AldousHuxley's picture

    Government can be good or bad but groups of people will power will always exist. People must hold government accountable to be of good for the people otherwise, power will corrupt and leaders will exploit their own populace.

     

    yes, USSR sucked, but becoming indentured servent to the tune of $120k in debt for shitty useless "education" from a "non-profit" hedge fund is no better like they do with youngsters in USA. At least KGB gave USSR space race ready education for free. Also illegal Mexicans working at dark chicken farms have with no healthcare have it no better than you in USSR. USA screws people in different ways. Now they are just screwing more of everyone except the top 0.1%. sounds familiar?

     

     

    Seer's picture

    That you're an immigrant from the former USSR does not mean that you grasp reality!

    The removal of govt (not that I'm opposed to it) isn't going to magically solve the overarching problems facing us.  As a matter of fact, it could actually make things WORSE, that is, if big corporations were to manage to transplant govt.  But... those who are used to my posts will know that my diagnosis of the problem simply comes down to this: BIG = FAIL.  BIG means TOO much.  And, we have a BIG consumption problem, one that the finite planet (you seem to fail to grasp this reality) cannot, no matter how many times you believe that we can click our free-from-govt heels together, support.

    Wars happen because of resource shortages.  The highly sophisticated market pushes us to consume MORE.  How do you reconcile this with your view?

    GoingLoonie's picture

    Dear Aldous-

    Anyone that has attended a good college knows the book.  It is obvious you are too young to be the writer and you should probably not claim to be the writer.  Suicide is never the answer.  Be tough, you can make a difference.