Destination Collapse

brucefan · Apr 1, 2009

Destination Collapse

[FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]by Michael S. Rozeff[/FONT][/FONT]

[FONT=Georgia, Times New Roman, Times, serif][FONT=Georgia, Times New Roman, Times, serif]by Michael S. Rozeff[/FONT][/FONT]
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[FONT=Times New Roman, Times, serif]The U.S. government and the Federal Reserve (FED) are pursuing reckless policies. The scale of their budget and financial mismanagement is so large that they will almost surely cause social and economic discontinuities unless they are slowed, halted, or impeded by factors that counteract them. They are saddling us with huge fiscal deficits and huge debts. They are transferring huge amounts of wealth. They are inflating the money supply without any restraint. States that have done this in the past have suffered devaluations, capital flight, economic disruptions, and severe economic difficulties. The affected nations have suffered impoverishment and loss of wealth. Before these dislocations ended, governments collapsed, currencies collapsed, economies collapsed, and people took to the streets. [/FONT]
[FONT=Times New Roman, Times, serif]The U.S. economy comprises the millions upon millions of economic activities of hundreds of millions of persons. It is hard to imagine this being disrupted, because its natural condition is to function smoothly. This is what we see, experience, and take for granted. The economy is still functioning around us although at a reduced scale. It takes large and unnatural forces to blow an economy apart, and that is what the government and the FED are setting in motion.[/FONT]
[FONT=Times New Roman, Times, serif]Since government rulers and bureaucrats have chosen to make careers in government, it is logical that they believe in government. It is logical, even if incorrect, that they blame the free-market for shocks to the economy that emanate from government; and it is logical, even if incorrect, that they overvalue government and undervalue markets. They are ordinarily loathe to admit that virtually all the bounty, welfare, and wealth we have comes from free-market activity. Their actions, despite their occasional free-market rhetoric, belie such a belief. They are all too ready to blame the free market and praise government.[/FONT]
[FONT=Times New Roman, Times, serif]It is possible that they will change course. It is possible that domestic and foreign political and social forces will arise that will make them change course. Blowing up an economy takes time, and it is possible that they themselves will observe what is happening and alter their policies. Should there be a groundswell of opposition to the present policies and should it appear that opposition political forces are gaining because of it, the situation can change. These and other like possibilities cannot be ruled out. At present, little is happening to suggest that they count for much; but we can be alert to these scenarios.[/FONT]
[FONT=Times New Roman, Times, serif]It is far more likely that our rulers will make matters worse and persist in their deadly course. They would not be where they are today if they did not believe in their own power to lead and in the power of government to correct what they see as the ills of the free market. The firmness with which they have publicly committed themselves to a series of large budget deficits and to a monetary expansion of unprecedented size, and the fact that they have only just embarked upon this course, and the fact that they seem to believe strongly that they are doing the right thing, all suggest that they will stay on their chosen course. This is a course whose destination, unbeknownst to them, is collapse. They are gambling on a different outcome, and it is a reckless and ignorant gamble that throws caution to the winds. It was always irrational for Americans to assign the fate of this great nation to a mere handful of souls with inordinate power, such as they possess over nuclear weapons and an outsized military. It is no less irrational to consign our economic fates to a few such powerful men and women. It is irrational to seek possible gains while staring at much higher possible losses, and that is what they are doing. They are mortgaging and risking the country?s future, which involves a huge possible loss, in a futile attempt to arrive at a sound economy with more jobs and production, which involves a far smaller gain. They are making this stupid gamble when a sound economy can be had merely by waiting and letting those who have losses bear them.[/FONT]
[FONT=Times New Roman, Times, serif]To understand why their policies are leading to collapse, we need a basic understanding of how a market economy functions and why recessions and depressions in business and economic activity occur. Our rulers do not have this understanding. That is one reason why they are choosing the wrong policies. Their basic error is to think that the free-market economy is unable to correct itself when exposed to shocks. They think that government can, without doing any harm, help the free-market economy to stay on a stable path. The free market has no need whatever for this function of government. Government should never have taken on this function in the first place.[/FONT]
[FONT=Times New Roman, Times, serif]In a natural or unmanipulated or free-market economy, the private participants or actors make decisions on their own. When there are billions of decisions that have to be made and re-made continuously, there is really no other possible method that is efficient and effective at producing greater wealth and welfare except decentralized decision-making and choice. The coordination of what appears to be a free-for-all is achieved through a system of prices. By looking at prices, each of us decides what to do based upon what we want and what it costs to get it. It is a system that encourages advances in technology and know-how and ways to cope with risks and uncertainties.[/FONT]
[FONT=Times New Roman, Times, serif]The liberty to make our own choices results in a system that is highly flexible and readily adapts to unanticipated changes.[/FONT]
[FONT=Times New Roman, Times, serif]Our economic choices and decisions fall into distinct and basic conceptual categories. We decide how to allocate our time between working and not working, which is a labor-leisure choice. We decide how to allocate our time among various kinds of work. We decide how to allocate our income between what we consume and what we save. We decide how to allocate the time spent and amount to be consumed among a variety of consumption goods and services. We decide how to allocate savings among a variety of risky activities and investments. We decide how to allocate time and resources to entrepreneurial activities. We decide how to finance or fund various activities. [/FONT]
[FONT=Times New Roman, Times, serif]Our lives have their ups and downs and so does an economy. A free market economy can experience booms, recessions, and depressions. The future is not known with certainty. Negative and positive shocks to the economy can occur, and then there have to be adjustment periods to get back to normal. The economies of yesteryear that depended heavily on commercial farm crops experienced slowdown and difficulties when the crops failed, because crops were a large part of a relatively undiversified economy. Economic activities that were geared to farm production might also decline for a time. In Genesis 41, Joseph recommends to the Pharaoh to store grain to overcome seven years of famine lying ahead. If a new invention (like the internet) ignites a boom in activities that ultimately find no ready markets, the economy might show unusual activity for a while followed by a period of slowdown and adjustment to the reality.[/FONT]
[FONT=Times New Roman, Times, serif]A free market has to and does coordinate current and future production against future unknown demands, supplies, and shocks; and it has to and does find ways to alleviate the negative effects of shocks. People generally accomplish this by planning, forecasting, conservative practices, saving, hedging, insuring, and diversifying. There are countless ways, each tailored to particular circumstances. When a man has a backup trade, he is hedging against being laid off in his main occupation. When a family saves, it is hedging against loss of income. When family members help one another in hard times, they are insuring each other. When a business is conservative in obtaining credit and expanding, it is hedging against possible stringent business conditions. When a person diversifies investments, he is hedging against loss in one part of the portfolio. When a business controls inventories, it is managing the risk of shocks to the business.[/FONT]
[FONT=Times New Roman, Times, serif]Government and the FED are institutions that generate economic shocks, after which they claim that they have the means, and only they have the means, to ameliorate their effects. This is more than ignorance. It is a lie. And because these two institutions have unique powers that affect the entire economy, they generate large and pervasive shocks.[/FONT]
[FONT=Times New Roman, Times, serif]In the modern booms that lead to recessions in economic activity, the government and FED act in ways to cause private economic actors to maintain rates of consumption and investment and types of investment (as in housing and mortgages) that are too high and too dependent on growing debt. They induce people to depart from their unhampered or free market demands. This is the shock to the economy. To get people on a continuing basis to consume and invest at a higher rate, the central bank has continually to maintain a rate of growth of money that is higher than what people ordinarily demand. This shock raises and distorts the price level, raises and distorts productive activity, and raises and distorts asset prices. It lowers risk premiums and induces speculation. It distorts trade patterns, capital flows, balances of payments, and exchange rates. The government and the FED push economic decisions further and further away from what people would decide if the credit growth had not been manipulated by the central bank.[/FONT]
[FONT=Times New Roman, Times, serif]Eventually the shocks induce poor decisions in the economy, such as building too many large houses or office buildings or taking on too much debt that cannot be repaid. At that point, observers speak of undue speculation. They recognize that some assets are being overvalued. They can see obvious irrationalities creeping in when they see people making decisions to produce very low-return projects that people do not ordinarily want or can afford. To those making these decisions, they seem rational because they expect the government and FED shocks to continue. Others realize that they will not go on forever, and that the decisions will eventually look very wrong when the government?s support of these activities lessens or draws to a close.[/FONT]
[FONT=Times New Roman, Times, serif]When distortions in economic activity become painfully obvious to large numbers of persons in the economy and to those in government and the FED, and when the repercussions of these distortions affect the political futures of the rulers and the banks that the FED supports, then the boom?s days are numbered. A government can underwrite the laying of railroad tracks indefinitely, but when it becomes clear tracks are being laid to nowhere, then even the government understands that it is not getting a political return on its investment. It will do better for itself to subsidize some activity that buys more votes. Investors will realize that the railroads have amassed large debts and that the traffic on roads to nowhere will not generate enough cash flow to pay off these debts. The railroad boom will falter.[/FONT]
[FONT=Times New Roman, Times, serif]Our government had ways to subsidize housing with Fannie Mae and other like agencies. They came to grief. The boom ended. Yet even after the private market has nixed this activity and even after banks and others have incurred tremendous losses on extending mortgages on no equity to people who could not pay them off, the government at this moment still is underwriting even more mortgages through these same agencies so that Americans lay down even more single-family houses. It still sees political mileage in pushing mortgages. The FED is cooperating to an amazing extent. It has a program to buy up $1.25 trillion of mortgage-backed securities. The private economy sees the irrationality in subsidizing the building of more houses at this time. The politicians in government, who face a different set of political incentives, do not. Not only that, our rulers in government think that this is one of the ways to end the recession.[/FONT]
[FONT=Times New Roman, Times, serif]The recession is the attempt by the economic actors to get back to a desired and sane economy, that is, a desired set of activities that are producing what people want to consume. After things have gone too far, people want to pursue the real and undistorted activities, despite the increased money and credit and despite the government?s manipulations. As they attempt to accomplish this, many prices start to adjust back to desired levels. This sets off an economic re-adjustment. Even the central bank at the end of the boom may itself participate in adjusting its money manipulation back to normal levels and rates. This occurs when it observes that consumer prices are rising too rapidly to suit its notions and goals.[/FONT]
[FONT=Times New Roman, Times, serif]The depression in activity goes on while the re-adjustments occur. These include liquidation, elimination, and writing-off of bad debts. They include bankruptcies. They include re-organizations of firms and shifting of assets to new uses and new hands. They include unemployment while people seek new work and re-train themselves. They include hardship, turmoil, and inconvenience. The adjustments generally take a few years, depending on the recession?s severity and on the factors that interfere with them. [/FONT]
[FONT=Times New Roman, Times, serif]Two factors that typically interfere with the private economy?s adjustments are government actions and central bank actions. Both the government and the central bank may try to restore the status quo ante, even though it involved distortions and brought on the recession. They may try to generate a new set of economic activities and jobs that again involve activities that private actors would not choose of their own accord. They attempt to stimulate a recovery that has new or restored distortions in prices and in how people allocate their time, their effort, their incomes, and their capital over risky activities, and how they engage in their entrepreneurial choices. They do this in the crudest possible way using large-scale macroeconomic policies that do nothing to rectify the imbalances that people in the economy are trying to correct.[/FONT]
[FONT=Times New Roman, Times, serif] A government stimulus program is an effort to thwart the recession. This sounds good, but it is bad, when we remember that a recession is what happens when the private actors in the economy attempt to abandon uneconomic activities and restore sound ones. A government stimulus program is an effort to thwart the private economy?s adjustment back to a normal economy.[/FONT]
[FONT=Times New Roman, Times, serif]The massive government and FED stimulation that we are now being subjected to cannot and will not produce a sound and sane economy. The greater the stimulus, the more the free market is prevented from working and restoring the economy to normalcy. Even before the distortions that the government and the FED caused have been removed, they are resurrecting and supporting them, or at least trying to. They are layering new distortions atop the old. They are distorting their own balance sheets to such a degree that they risk collapse of government and currency, economy and social order. Their operation and program deserves the name Destination Collapse.[/FONT]

[FONT=Times New Roman, Times, serif]April 1, 2009[/FONT]

[FONT=Times New Roman, Times, serif]Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York[/FONT]

brucefan · Sep 28, 2009

Re: Destination Collapse

Federal Reserve Buys More Than 100% of Mortgages Issued in 2009

Monday, September 28, 2009, 11:13 am, by cmartenson

What follows is a snippet from the most recent Martenson Report (Housing and Wealth: Part II).

<HR>This is important information. What I've found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market.
Just as important as a person's desire to buy a home is their ability to gain access to mortgage funding.
The mortgage market is a gigantic beast with many moving parts, but it is pretty easy to understand from a high level.
The process works like this: A homeowner secures a mortgage from a bank or mortgage company. Then the mortgage is sold off to another company, with the cash generated by that sale now available to lend to other potential homeowners. Ultimately the mortgage may pass through several sets of hands but ultimately it lands with a terminal holder.
In that chain, the mortgage might get sold off several times, or perhaps sliced and diced by Wall Street wizards, but all that matters is that some company (with cash) is there at the end to buy the mortgage to keep the whole chain moving along.
Lately, the "terminal buyers" in that chain have increasingly ended up being the federal government (through the GSEs) and the Federal Reserve.
And not just by a little bit, but by a lot.
Here are the numbers:
So far in 2009 (through August), a total of 3.2 million existing homes were sold for an average price of $217,000, while 263,000 new homes were sold for an average price of $264,000.
Taken together, and assuming that we live in a world where 10% is the average down payment, we get this table:

That is, a total of ~$686 billion in new mortgages were issued in 2009 (through August).
Now let's look at how many Mortgage Backed Securities (MBS) and agency debt obligations were accumulated by the Federal Reserve on its balance sheet over the same period of 2009:

(Source)
It turns out that in 2009 (again, through August), the Federal Reserve has bought $624 billion of MBS and a further $98 billion of Agency debt, for a total of $722 billion in money injection into the housing market through Fannie Mae, Freddie Mac, and the FHLB.

In other words, the Federal Reserve alone bought $722 billion of mortgages and agency debt when only $686 billion in new mortgages were issued. So, through August, the Fed bought more than 100% of the entire supply of new (purchase) mortgages in 2009.
That's not a free housing market; that's a market bought, owned, and sustained by the Federal Reserve's willingness to print up three quarters of a trillion dollars out of thin air.
While the individual mortgages issued in 2009 may or may not be the exact same ones purchased by the Federal Reserve, that's immaterial. All the mortgage issuers care about is that when they issue a mortgage, a purchaser with money exists somewhere down the line. The chain needs a terminal buyer, and that buyer has become the Federal Reserve.
The impact of these purchases by the Federal Reserve is to both provide liquidity and to drive down the rate of interest for new mortgages. By lowering both the long end of the Treasury curve (which the Fed does by actively buying Treasuries) and providing more than sufficient demand for MBS and agency paper, long-term interest rates come down.
Without the Fed's activities, it is a rock-solid certainty that mortgage interest rates would be higher than they are, and possibly a LOT higher.
What all this means is that when (not if) the Federal Reserve begins to try and unwind itself from all of the magnificent interventions of the past year, it must contend with the fact that it is the housing market.
Where the Fed is hoping that it can gently release the soft chubby fingers of the housing market, which will then toddle off under its own power, it will discover that it is actually carrying a helpless newborn

brucefan · Oct 6, 2009

Re: Destination Collapse

Barak Hussein Obama, hmm, hmm, hmmm

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brucefan · Oct 15, 2009

Re: Destination Collapse

Make sure you get those $ 250 checks out there to buy back some support from those seniors

So when they get it, they may be able to afford a pack of gum :doh1

Posted by Economic Analyst at <A class=timestamp-link title="permanent link" href="http://thecomingdepression.blogspot.com/2009/10/european-ponzi-scheme-ready-to-collapse.html" rel=bookmark><ABBR class=published title=2009-10-15T16:10:00-07:00>4:10 PM</ABBR> 0 comments

Coordinated Intervention Won?t Work in Dollar Collapse

Oct. 15 (Bloomberg) -- The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.?s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.

?The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,? said Daisuke Uno at Sumitomo Mitsui, a unit of Japan?s third- biggest bank. ?The dollar?s fall won?t stop until there?s a change to the global currency system.?

?We can no longer stop the big wave of dollar weakness,? said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, ?there will be no downside limit, and even coordinated intervention won?t work,? he said.
LINK HERE

Dave007inVegas · Oct 16, 2009

Re: Destination Collapse

Bruce, I will be one of those to get the $250. As you know it won?t buy my support but I will help boost the economy is my town with it. Hell, I might even win a couple of bucks to boot.

:mutley

Joe Contrarian · Oct 17, 2009

Re: Destination Collapse

Recession Will Be 'Full-Blown Depression': Strategist
Published: Friday, 16 Oct 2009 | 8:03 AM ET

By: CNBC.com

This global recession will turn into a "full-blown depression," Nicu Harajchi, CEO of N1 Asset Management, said Friday, adding that global stimulus hasn't come down to Main Street.

Wall Street is making money, while consumers aren't, Harajchi told CNBC.
"We have seen the G20 coming out with cross border capital injections of $5 trillion this year? But a lot of this money hasn't really come down to Main Street," he said.

"When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money," he said. "Consumers are losing their jobs. They are struggling with their mortgages, with their credit. And we are just seeing this continuing."

The $5 trillion injection is "monetary expansion," according to Harajchi. "At some point, which we believe to be 2010/11, some of the central banks are going to recall some of that money and that will turn from monetary expansion to monetary contraction."

He also said he doesn't see the corporates or the public "being able to pay back that debt."

"We see 2010 becoming a much more risky year than 2009," he said.
Harajchi said unemployment data are "a leading indicator" instead of a lagging indicator.

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Joe Contrarian · Oct 17, 2009

Re: Destination Collapse

brucefan · Nov 28, 2009

Re: Destination Collapse

We are running out of time

Bob Chapman (Video): This is Very Serious

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4625 · Nov 28, 2009

Re: Destination Collapse

Is there anything of relevance in this thread? That's what I thought. . .

roscoe · Nov 29, 2009

Re: Destination Collapse

4625 said:
Is there anything of relevance in this thread? That's what I thought. . .

just our daily dose of gloom and doom!:shoot:

BCTTWR · Nov 29, 2009

Re: Destination Collapse

The Emperor has no clothes.

brucefan · Nov 29, 2009

Re: Destination Collapse

brucefan said:
We are running out of time

Bob Chapman (Video): This is Very Serious

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Here ya go

Potential For Fed To Hyperinflate

The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be in cash, which is a compensating balance.
The Fed has to do one of two things: They either have to pull $1.5 trillion out of the system by June, which would collapse the economy, or face hyperinflation. This is why the Fed has instructed banks to inform them when and how much of the TARP funds they can return. At best they can expect $300 to $400 billion plus the $200 billion the Fed already has in hand.
We believe the Fed will opt for letting the system run into hyperinflation. All signs tell us they cannot risk allowing the undertow of deflation to take over the economy. The system cannot stand such a withdrawal of funds. They also must depend on assistance from Congress in supplying a second stimulus plan. That would probably be $400 to $800 billion. A lack of such funding would send the economy and the stock market into a tailspin. Even with such funding the economy cannot expect any growth to speak of and at best a sideways movement for perhaps a year.
We have been told that the FDIC not only is $8.2 billion in the hole, but they have secretly borrowed an additional $80 billion from the Treasury. We have also been told that the FDIC is lying about the banks in trouble. The number in eminent danger are not 552, but a massive 2,035. The cost of bailing these banks out would be $800 billion to $1 trillion. That means 2,500 could be closed in 2010. Now get this, the FDIC is going to be collapsed before the end of 2010, which means no more deposit insurance. This follows the 9/18/09 end of government guarantees on money market funds. Both will force deposits into US government bonds and agency bonds in an attempt to save the system.
LINK HERE

http://www.theinternationalforecast...ster_Weekly/Potential_For_Fed_To_Hyperinflate

brucefan · Feb 3, 2010

Re: Destination Collapse

NOT GOOD

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scrimmage · Feb 4, 2010

Re: Destination Collapse

20 reasons Global Debt Time Bomb explodes soon

Commentary: Which trigger will ignite the Great Depression II?

Feb. 2, 2010
ByPaul B. Farrell, MarketWatch
Excerpts from:
http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02?pagenumber=1

ARROYO GRANDE, Calif. (MarketWatch) -- Retire? You can fuggetaboutit if the new Global Debt Time Bomb is detonated by any one of 20 made-in-America trigger mechanisms.

Yes, 20. And yes, any one can destroy your retirement because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st century, igniting the Great Depression II that George W. Bush, Ben Bernanke, Henry Paulson and now President Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas and bailouts.

...What triggers this firestorm?

20 economic weapons of mass destruction triggering ticking Global Debt Time Bomb

1. Federal Budget Deficit Bomb. The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama's 2010 budget, to $14.3 trillion vs. $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America's debt at 84% of GDP will soon pass that toxic 90% trigger point.

2. U.S. Foreign Trade Bomb. Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.

3. Weakening U.S. Dollar as Foreign Reserve Currency Bomb. Fear China and other currencies will replace dollar as main foreign reserves. The dollar's fallen: The main index measuring dollar strength has gone from 120 at the Clinton-to-Bush handoff to below 80 today.

4. Cheap Money Bomb: Credit Ratings Down, Rates Up. Economists at S&P, Fitch and Moody's were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.

5. Global Real Estate Bomb. Dubai Tower, new "world's tallest building" is empty. BusinessWeek warns that China's housing collapse could be worse than America's. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a "ticking time bomb" bloating 25% of bank balance sheets.

6. Peak Oil and the Population Bomb. China and India each need 500 new cities. The United Nations estimates world population exploding 50% from 6 billion to 9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling "America Dream."

7. Social Security Bomb. We have no choice; eventually we must either cut benefits or raise taxes. Politicians hate both, so they'll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.

8. Medicare: A Nuclear Bomb. Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

9. Health-care Insurance Bomb. Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

10. State and Local Government Budget Bombs. Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.

11. Underfunded Corporate Pensions Bomb. From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now underfunded. Defaults are guaranteed by taxpayers.

12. Consumer Debt Bomb. Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it -- yes love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

13. Personal Savings Bomb. Before the 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero. Now it's increasing, slowing retail recovery. Today, government's the big "unsaver."

14. War and Military Defense Deficits. Costs of Iraq and Afghanistan wars -- $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.

15. Homeland Insecurity Bomb. Security at airports, seaports, borders, vulnerable chemical plants all increase budgets.

16. Fed/Treasury Bailout Bombs. Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail Fat-Cat banks to taxpayers.

17. Insatiable Washington Lobbyists Bombs. Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America's new corporate-socialism.

18. Shadow Banking: The Derivatives Bomb. Wall Street wants no regulation of this $670 trillion, high-risk, out-of-control casino that's highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives almost destroyed global economies in 2008-09, finally will by 2012.

19. Dysfunctional Two-Party Political Bomb. Polarized partisanship increasing: Every day both parties show zero interest in cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points, make the other side look bad.

20. The Coming Populous Rebellion Bombs. Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting and a lack of long-term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: "Doing what's right for the common good and country" is just empty political rhetoric.

brucefan · Feb 4, 2010

Re: Destination Collapse

Really not good

Hmmm, what do they know they we dont?

The only value to money markets is liquidity? :+clueless

They must be watching Beck !

Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote
Tyler Durden's picture
Submitted by Tyler Durden on 01/27/2010 11:31 -0500

* Mary Schapiro
* Meltdown

Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares." Too bad investors' hardships considerations ended up being completely irrelevant.

As a reminder, here is the gist of the proposal as pertains to redemption suspension:

Proposed rule 22e?3(a) would permit a money market fund to suspend redemptions if: (i) The fund?s current price per share, calculated pursuant to rule 2a?7(c), is less than the fund?s stable net asset value per share; (ii) its board of directors, including a majority of directors who are not interested persons, approves the liquidation of the fund; and (iii) the fund, prior to suspending redemptions, notifies the Commission of its decision to liquidate and suspend redemptions, by electronic mail directed to the attention of our Director of the Division of Investment Management or the Director?s designee. These proposed conditions are intended to ensure that any suspension of redemptions will be consistent with the underlying policies of section 22(e). We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares. Accordingly, our proposal is limited to permitting suspension of this statutory protection only in extraordinary circumstances. Thus, the proposed conditions, which are similar to those of the temporary rule, are designed to limit the availability of the rule to circumstances that present a significant risk of a run on the fund. Moreover, the exemption would require action of the fund board (including the independent directors), which would be acting in its capacity as a fiduciary. The proposed rule contains an additional provision that would permit us to take steps to protect investors. Specifically, the proposed rule would permit us to rescind or modify the relief provided by the rule (and thus require the fund to resume honoring redemptions) if, for example, a liquidating fund has not devised, or is not properly executing, a plan of liquidation that protects fund shareholders. Under this provision, the Commission may modify the relief ??after appropriate notice and opportunity for hearing,?? in accordance with section 40 of the Act

scrimmage · Feb 4, 2010

Re: Destination Collapse

7. Social Security Bomb. We have no choice; eventually we must either cut benefits or raise taxes. Politicians hate both, so they'll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.

Next in Line for a Bailout: Social Security

ByAllan Sloan, senior editor at large
February 2, 2010

Don?t look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Instead of helping to finance the rest of the government, as it has done for decades, our nation?s biggest social program needs help from the Treasury to keep benefit checks from bouncing ? in other words, a taxpayer bailout.

No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week.
The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010 (see page 74 of the CBO report). The second is $92 billion, the overall Social Security surplus for fiscal 2010 (see page 116).
This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30.

Why disregard the interest? Because as people like me have said repeatedly over the years, the interest, which consists of Treasury IOUs that the Social Security trust fund gets on its holdings of government securities, doesn?t provide Social Security with any cash that it can use to pay its bills. The interest is merely an accounting entry with no economic significance.

Social Security hasn?t been cash-negative since the early 1980s, when it came so close to running out of money that it was making plans to stop sending out benefit checks. That led to the famous Greenspan Commission report, which recommended trimming benefits and raising taxes, which Congress did. Those actions produced hefty cash surpluses, which until this year have helped finance the rest of the government.
But even then, it was clear the surpluses would be temporary.
Now, years earlier than projected, Social Security is adding to the government?s borrowing needs, even though the program still shows a surplus on paper.
From:
http://money.cnn.com/2010/02/02/news/economy/social_security_bailout.fortune/index.htm

scrimmage · Feb 12, 2010

Re: Destination Collapse

How to invest for a global-debt-bomb explosion
Prepare for an apocalyptic anarchy ending Wall Street's toxic capitalism

Feb. 9, 2010
By Paul B. Farrell, MarketWatch
Excerpts from:
http://www.marketwatch.com/story/how-to-invest-for-the-debt-bomb-explosion-2010-02-09?pagenumber=1

ARROYO GRANDE, Calif. (MarketWatch) -- Wake up investors. Are you prepared for the economic anarchy coming after a global-debt time bomb explodes? Are you thinking outside the box? Investing differently? Act now -- tomorrow will be too late.

Start by looking past the endless cable skirmishes between Rush, Glenn, Bill and Shawn versus Harry, Nancy, Ben and Barack. Look way past the insurgency bonding Sarah and her diehard Tea Party revolutionaries with Ron Paul's Neo-Reaganite ideologues, Fat-Cat Bankers and the Party of No, all planning a massive frontal assault on the 2010 elections, hell-bent on destroying the presidency. All that's the sideshow.

After the global-debt bomb explodes don't expect a typical bear correction followed by a new bull. Wall Street's toxic pseudo-capitalism is imploding...

This is no joke, folks. Are you prepared? Or preparing? Will your family survive in a post-apocalyptic world, when anarchy is rampant in America? Look at Washington, Wall Street and Corporate America today. You know it's already begun.
You are witnessing a fundamental breakdown of the American dream, a systemic breakdown of our democracy and our capitalism, a breakdown driven by the blind insatiable greed of Wall Street: Dysfunctional government, insane markets, economy on the brink. Multiply that many times over and see a world in total disarray.

Not a war about ideology, but an economic game-changer

This is a war to control 299 million American taxpayers. A war waged by the "Happy Conspiracy" Jack Bogle profiled in his 2004 "Battle for the Soul of Capitalism," a war machine of Fat Cat Bankers, CEOs, 42,000 mercenary lobbyists and a Congress held hostage to unlimited campaign donations. Their conspiracy has been waging this war against Americans for decades, long before the Supreme Court exposed their dirty secret.

Yes, your enemy is that "Happy Conspiracy:" It has degraded into a pseudo-capitalism with no conscience, no sense of the public good, hell-bent on controlling America's mind, your money and the global markets for its own selfish ends. And eventually it will trigger the game-changing global-debt bomb, the third global meltdown of the century that finally ignites the Great Depression II, plunging us into an era of anarchy.

As America descends into anarchy your family's survival and your ability to retire will depend on which of America's two economic classes you belong to out of our total of roughly 300 million citizens:

"Average Joe & Jane" Americans: You're one of 299 million Main Street Americans. Average income is $50,000, only 10% of the average bonuses paid to Wall Street's Fat-Cat Bankers. Or you're already one of America's 20% underemployed ... maybe on food stamps ... maybe among the 47 million with no medical insurance ... your retirement assets are about $50,000, a year's survival. And you are "mad-as-hell" you're not working "inside" the "Happy Conspiracy."

"Happy Conspiracy" Insiders: You're one of the lucky million or so elite Insiders in the "Happy Conspiracy." You may work for a Fat-Cat Bank that American taxpayers bailed out last year so you pocketed a 2009 bonus gift of somewhere between $600,000 and $10 million. Maybe you're a Corporate American CEO. Maybe you're on the Forbes 400 list. Or you're a U.S. Senator.

Here's how these savvy Insiders are preparing:
In his 2008 best-seller, "Wealth, War and Wisdom," hedge fund manager Barton Biggs, a highly respected Insider in the "Happy Conspiracy," advised rich insiders to expect the "possibility of a breakdown of the civilized infrastructure."

His advice:
Make tons of money. Buy an isolated farm in the mountains. Protect family against the barbarians: "Your safe haven must be self-sufficient and capable of growing some kind of food ... It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson."

How can America's 299 million 'second-class citizens' invest for anarchy?

So what can the average Joe and Jane, the other 299 million Americans do? Warning: In anarchy, nobody knows. Period. The only possible strategy: "Think Swiss Family Robinson." Stockpile like a "Happy Conspiracy Insider."

Many still challenge us about proven strategies like buy and hold, Modern Portfolio Theory, Lazy Portfolios. Unfortunately, they all need a real democracy driven by honest, transparent capitalism to function effectively. They can't function in anarchy.

And Wall Street's already lapsed into a toxic pseudo-capitalism, using it to manipulate Main Street America. Eventually that mindset will force Main Street Americans to misuse the same dark "Swiss Family Robinson" tactics as the Insiders in order to survive the coming anarchy.

What's our alternative? A new American Revolution But wait, wait, I hear you asking loudly: There must be an alternative to this dark descent into anarchy, to the loss of everything that made America the greatest nation in history?

Yes there is an alternative. Out of the ashes of anarchy must come a Second American Revolution. But unfortunately nothing will happen until a great crisis awakens America ... shocks the conscience of the masses ... we are "asleep" ... only a seismic, systemic shock will trigger the necessary revolution.

The future of our economy and indeed our nation demands another political revolution. We must take back our democracy and capitalism from a government run by Wall Street and its "Happy Conspiracy" ... their toxic self-serving power hold must be broken and, if not, a rising new conspiracy of China, India, oil-sovereignties and asset-rich nations will replace our homegrown "Happy Conspiracy" as it eventually goes down in the flames of anarchy.

Sadly, that's the future many of us realists see ahead for America.

scrimmage · Feb 12, 2010

Re: Destination Collapse

Friday, February 12, 2010

WITHOUT PEAK OIL
Posted by James m Dakin
Excerpts from:
http://bisonsurvivalblog.blogspot.com/2010/02/without-peak-oil.html

Peak Oil is already happening and the end of both dirt cheap oil and its unwavering abundance will spell the end of western civilization. In 1950 we imported more oil to the world than everyone combined pumped. That ocean of oil won us World War II. Not brilliant strategy, not a mythical generation of Americans. Not technology. It looks like the birth of the modern age was due to the spoils of war, importing Nazi tech. Brute energy flow and the sacrificial lamb of Russian fighters barely won us the war. But I won?t get too far off base here. Perhaps another day. Today, we import 70% of our oil and the loss of our domestic production has been made up by turning nearly half of our corn crop into ethanol. Canada turns her natural gas into gasoline by heating up tar sands. Mexico is in cliff diving mode over at Cantrell. Saudi Arabia is drilling more and more outside their major field to keep her numbers up. Peak Oil isn?t in five or ten years, it already started.

But forget about Peak Oil. Focus instead on imports.
...the last three years saw an 8% drop followed by a second year of 8% and last year was an 11% drop in the amount of oil imported. Let?s just say for the sake of argument that we?ve made up the ?temporary? decline with that ethanol. Let?s go further out on a limb and say global oil production won?t fall anymore, that our 70 million barrels a day will never decrease. Let?s just concern ourselves with economics

. China has already stopped buying our debt. We are starting to buy our own debt. Paying off today at the expense of tomorrow. We?ve bought some time. But for how long? After some point, our military starts to feel the economic contraction. Once our military goes, so goes our oil protection. As goes our ability to buy oil since military and economic superiority are together....Once our dominance is over our oil imports start to freefall. Even if you don?t buy into American Empire, you have to acknowledge that at least there has been an arrangement where we were the worlds policeman in exchange for oil. I do buy the Empire theory, but even if we buy the official version it still leads to oil imports suffering with our military.

Pointing out how many millions of solar panels we could have bought with the Iraqi invasion money ignores the point of business as usual for the power brokers that historically always deplete their environment for control and riches.

Solar Power
...To meet the world?s present energy needs by using solar power, then, we would need an array (or an equivalent number of smaller ones) with a size of 500/33,000 x 36 million km2, which is about 550,000 km2 -- a machine the size of France. The production and maintenance of this array would require vast quantities of hydrocarbons, metals, and other materials -- a self-defeating process. Solar power will therefore do little to solve the world?s energy problems.
http://www.culturechange.org/cms/index.php?option=com_content&task=view&id=597&Itemid=1

We are locked into the petroleum model. But we import almost all the energy we use. Even if Peak Oil wasn?t a reality, a significant drop of our imported energy spells economic collapse . And it will continue to happen. Denying the oppressor the tools to conquer. Going to a better paying customer. Taking money not being hyperinflated. Your pick, but imports will continue to decline. Less energy equals collapse, it is just that we can?t say when. But it will happen. Plan accordingly,...

brucefan · Feb 22, 2010

Re: Destination Collapse

This really doesnt sound good either:+clueless

Does anyone else see a pattern here?

<HR>REPORTS: CITIGROUP Warns Customers It May Refuse To Allow Withdrawals...

scrimmage · Feb 25, 2010

Re: Destination Collapse

"It's Over" For U.S. Economy:
Buffett Partner
By NewsGuy ? <ABBR class=published title=2010-02-24T00:46>February 24, 2010</ABBR>

Charlie Munger

Long-time business partner of Warren Buffett, Charlie Munger, writes in a new article for Slate.com that ?it?s basically over? for the United States economy.

In his article, the Berkshire Hathaway vice chairman constructs the parable of Basicland, whose economy just so happens to run parallel to that of America.

In the beginning of Basicland, people live within their means, debt is limited to mortgages and some consumer loans, speculation is discouraged, and taxes are limited and pay for only ?basic services? like fighting fires, defense, and the court system.
As a result, the economy happily grows at a steady annual rate of 3 percent.
But things take a turn for the worse, Munger writes.

?The extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland?s citizens more and more whiled away their time in the excitement of casino gambling,? and financial services soon grow to account for too big a portion of the economy.

?The winnings of the casinos eventually amounted to 25 percent of Basicland?s GDP, while 22 percent of all employee earnings in Basicland were paid to persons employed by the casinos, many of whom were engineers needed elsewhere,? Munger writes.
Then, Munger?s tale takes a shocking turn: Imported energy costs rise, and low-cost labor competition from abroad appears.

?Suddenly Basicland had to come up with 30 percent of its GDP every year, in foreign currency, to pay its creditors,? Munger writes.
The U.S. deficit ? just the gap between spending and income in one year ? is projected to hit $1.6 trillion in 2010. Total debt is project to exceed 100 percent of GDP starting in 2011.

Paul Volcker

In the parable, Munger strongly suggests that the United States take seriously the campaign of Reagan-era Fed Chairman Paul Volcker, who wants the big banks to cease pretending to be banks if they expect the freedom to trade securities on the side.

?He suggested that Basicland should strongly discourage casino gambling, partly through a complete ban on the trading in financial derivatives, and it should encourage former casino employees ? and former casino patrons ? to produce and sell items that foreigners were willing to buy,? Munger writes.
As the parable ends, none of the politicians listen, and Basicland turned into ?Sorrowland,? Munger concludes.

Above from:
http://www.therightperspective.org/2010/02/24/its-over-for-us-economy-buffett-partner/
Comments below from:
http://www.prisonplanet.com/“it’s-over”-for-us-economy-buffett-partner.html

<CITE>Gary S</CITE> Reply:
<SMALL class=commentmetadata>February 24th, 2010 at 9:16 am</SMALL>
I think you touch on a very valid and often missed point about gold and silver. Yes, they do have and likely will retain value. The bigger issue that you hint at is that when society begins to really collapse (not the slow motion collapse we?re witnessing now) then it isn?t going to be gold and silver that people will really want. Food, water and very likely, even electricity may be things that are limited or restricted. Sure, anyone could barter a silver coin for a box of Ramen Noodles, but who?s going to give you change? What are they going to do with the silver coin? Gold and silver in my opinion are currently worth investing in if you plan to bail out of the US.

Even if they change the value of the existing fiat money supply, they?re going to replace it with another fiat funny money system and begin the process all over again. Are people going to line up and trade in their gold and silver for the new fiat money? Hard resources are going to matter more: food, water, shelter and electricity will matter more. I think as Mark Dice has proven, people aren?t likely to be accepting gold or silver for exchange if they are too stupid to buy a gold coin worth over a $1000.00 for $50.00.

<CITE>Tod G.</CITE> Reply:
<SMALL class=commentmetadata>February 24th, 2010 at 11:47 am</SMALL>
Fiat isn?t the point. Its debt money vs. credit money. Our money is based on debt. The Fed prints money and the government owes them that much plus interest. Debt, debt and more debt. Since no one printed money for the interest, there is never enough in the system for everyone to pay off all the debt. So debt grows and grows. The cost of servicing grows and grows, till the servicing costs exceed any benefit you used to get from adding more debt money. Print more money, collapse the economy. This has happened now.

If money is a credit, a receipt if you will, and most importantly, there is no interest involved, then you will see massive prosperity in short order. Only the government is in a position now to print such debt free money, as a public service. Its been done in Medieval England, in Colonial Pennsylvania, Lincoln did it, even Hitler managed to turn around a devastated economy in Germany in two years with it. And no, no inflation results from doing this, as you are printing money when commerce takes place. The supply stays proportionate to the size of the economy.

tiger9973 Says:
<SMALL class=commentmetadata>February 24th, 2010 at 7:08 am </SMALL>
Munger? Mung until no good? We?ve been through this before. 1929 looked pretty good until sometime in late October. Things didn?t really bottom out until 1933-?34, and by ?39 we weren?t totally recovered but definitely in much better shape. Then Hitler started making noises in Poland and Czechoslovakia, and we all know what happened in December ?41, somewhere near Waikiki. That?s the funny thing I can?t quite get my head around ? if war is supposed to stimulate the economy, how come we?re in this mess?

<CITE>Gary S</CITE> Reply:
<SMALL class=commentmetadata>February 24th, 2010 at 9:21 am</SMALL>
I think that?s one of the biggest lies sold to us all by our governments. FDR never stimulated the economy in the strictest sense, he just borrowed and printed the money to make it appear everything was improving. All that government subsidies buying everything from food, lead, planes, tanks, ships, the Manhattan Project etc, all government money and we know they weren?t getting it in taxes. Look at a US Debt history graph and you can see how they ?fixed? the economy, they just ran the debt up by printing and borrowing (remember war bonds?) to give people jobs. We?re still paying for it because the debt continues to grow.

Bush could have imitated that but instead chose to reward buddies instead of financing large projects and buying lots of equipment. Obama has done it on a grander scale by rewarding all of Wall Street and bailing out companies instead of the people. Our leaders are our enemies.

scrimmage · Feb 26, 2010

Re: Destination Collapse

Complexity and Collapse
Empires on the Edge of Chaos

By Niall Ferguson
February 26, 2010 "Foreign Affairs" - March/April 2010 Edition --

There is no better illustration of the life cycle of a great power than The Course of Empire, a series of five paintings by Thomas Cole that hang in the New-York Historical Society. Cole was a founder of the Hudson River School and one of the pioneers of nineteenth-century American landscape painting; in The Course of Empire, he beautifully captured a theory of imperial rise and fall to which most people remain in thrall to this day.

Each of the five imagined scenes depicts the mouth of a great river beneath a rocky outcrop. In the first, The Savage State, a lush wilderness is populated by a handful of hunter-gatherers eking out a primitive existence at the break of a stormy dawn. The second picture, The Arcadian or Pastoral State, is of an agrarian idyll: the inhabitants have cleared the trees, planted fields, and built an elegant Greek temple. The third and largest of the paintings is The Consummation of Empire. Now, the landscape is covered by a magnificent marble entrep?t, and the contented farmer-philosophers of the previous tableau have been replaced by a throng of opulently clad merchants, proconsuls, and citizen-consumers. It is midday in the life cycle. Then comes Destruction. The city is ablaze, its citizens fleeing an invading horde that rapes and pillages beneath a brooding evening sky. Finally, the moon rises over the fifth painting, Desolation. There is not a living soul to be seen, only a few decaying columns and colonnades overgrown by briars and ivy.

Conceived in the mid-1830s, Cole's great pentaptych has a clear message: all empires, no matter how magnificent, are condemned to decline and fall. The implicit suggestion was that the young American republic of Cole's age would be better served by sticking to its bucolic first principles and resisting the imperial temptations of commerce, conquest, and colonization.

For centuries, historians, political theorists, anthropologists, and the public at large have tended to think about empires in such cyclical and gradual terms. "The best instituted governments," the British political philosopher Henry St. John, First Viscount Bolingbroke, wrote in 1738, "carry in them the seeds of their destruction: and, though they grow and improve for a time, they will soon tend visibly to their dissolution. Every hour they live is an hour the less that they have to live."

From and continued at:
http://www.informationclearinghouse.info/article24874.htm

Below from:
http://web.sbu.edu/theology/bychkov/cole.html

<CENTER>

Thomas Cole, The Course of Empire, The Savage State, 1834

Thomas Cole, The Course of Empire, The Pastoral or Arcadian State, 1834

Thomas Cole, The Course of Empire, The Consummation of Empire, 1835/36

Thomas Cole, The Course of Empire, Desctruction, 1836

Thomas Cole, The Course of Empire, Desolation, 1836

</CENTER>

brucefan · Jun 4, 2010

Re: Destination Collapse

Markets, Jobs, BP Oil Spill, Vacations

<EMBED src=http://www.youtube.com/v/idvyzXvYRSk&hl=en_US&fs=1& width=640 height=385 type=application/x-shockwave-flash allowscriptaccess="always" allowfullscreen="true"></EMBED>

brucefan · Feb 29, 2012

Re: Destination Collapse

The bottomless pit :fainting:

FANNIE asks gov't for $4.6B after new loss...

scrimmage · Mar 2, 2012

Re: Destination Collapse

Wednesday, February 29, 2012
The Trajectory of Empires

That?s when things began to go wrong, because the drive to expand was still there but the
opportunities for expansion were not. Attempts to expand northward into Scotland, Germany,
and the Balkans ran headlong into two awkward facts: first, the locals didn?t have enough
wealth to make an invasion pay for itself, and second, the locals were the kind of tribal societies
that fostered Darwinian selection among their young men via incessant warfare, and quickly
found that a nice brisk game of "Raid the Romans" made a pleasant addition to the ordinary
round of cattle raids and blood feuds. Expansion to the south was closed off by the Sahara
Desert, while to the east, the Parthian Empire had an awkward habit of annihilating Roman
armies sent to conquer it. Thus Roman imperial expansion broke down; attempts to keep the
wealth pump running anyway stripped the provinces of their productive capital and pushed the
Roman economic system into a death spiral; the imperial government stumbled from one fiscal
and military crisis to another, until finally the Dark Ages closed in.

The United States, as I hope to show in upcoming posts, is being driven by the same forces
along the same trajectory toward imperial bankruptcy and collapse. Like the empires just
described, and many others as well, it?s become economically and politically dependent on a set
of unbalanced relationships that extract wealth from much of the world and concentrate it here
at home. The specific form of those relationships unfolds from the unusually complex history of
America?s empire;....

Excerpt from:
[URL]http://thearchdruidreport.blogspot.com/2012/02/trajectory-of-empires.html[/URL]

Guns N' Roses November Rain 1992
<IFRAME height=480 src="http://www.youtube.com/embed/8SbUC-UaAxE" frameBorder=0 width=640 allowfullscreen></IFRAME>

scrimmage · Apr 5, 2012

Re: Destination Collapse

"Peak Oil" bitchez:

While it?s unclear how long a post-credit bubble world can sustain such period of forced growth, what is perfectly clear is that oil is no longer available to fund such growth. For the seventh year since 2005, global oil production in 2011 failed to surpass 74 mbpd (million barrels per day) on an annual basis. But while the West is set to dote upon its retirement class for many years to come, the five billion people in the developing world are ready to undertake the next leg of their industrial growth. They are already using oil at the margin as their populations urbanize. But as the developing world comes on board as new users of petroleum, they still need growing resources of other energy to fund the new growth which now lies ahead of them.

This unchangeable fact sets the world on an inexorable path: a competitive race for BTU.

Excerpt from/read more at:
http://www.zerohedge.com/news/race-btu-has-begun

The estimated amount of oil in place (the resource) varies widely, with some suggesting that there could be 400 billion barrels of oil in the Bakken. Because of advances in fracking technology, some of the resource has now been classified as reserves (the amount that can be technically and economically produced). However, the reserve is a very low fraction of the resource at 2 to 4 billion barrels (although some industry estimates put the recoverable amount as high as 20 billion barrels or so). For reference, the U.S. consumes a billion barrels of oil in about 52 days, and the world consumes a billion barrels in about 11 days.

Like the Bakken, the Eagle Ford formation in Texas consists of oil (and natural gas) in tight formations that is being accessed via fracking. The amount of technically recoverable oil in the Eagle Ford is estimated by the U.S. Department of Energy to be 3.35 billion barrels of oil.
Without a doubt, these two formations are a major factor in the current resurgence of U.S. oil production. But the Green River formation is the source of talk of those enormous oil resources -- larger than those of Saudi Arabia -- and it is a very different prospect than the tight oil being produced in North Dakota and Texas. The oil shale in the Green River looks like rock. Unlike the hydrocarbons in the tight oil formations, the oil shale (kerogen) consists of very heavy hydrocarbons that are solid. In that way, oil shale more resembles coal than oil. Oil shale is essentially oil that Mother Nature did not finish cooking, and thus to convert it into oil, heat has to be added. The energy requirements -- plus the fact that oil shale production requires a lot of water in a very dry environment -- have kept oil shale commercialization out of reach for over 100 years.

Thus, while the U.S. might indeed have greater oil resources than Saudi Arabia, U.S. oil reserves (per the BP Statistical Review of World Energy) are only about 1/10th those of Saudi Arabia. The distinction is important.

Excerpt from/read more at:
http://www.theoildrum.com/node/9085

scrimmage · Apr 6, 2012

Re: Destination Collapse

"The important thing to understand about collapse is that it's brought on by overreach and overstretch, and people being zealots and trying too hard. It's not brought on by people being laid back and doing the absolute minimum. Americans could very easily feed themselves and clothe themselves and have a place to live, working maybe 100 days a year. You know, it's a rich country in terms of resources. There's really no reason to work more than maybe a third of your time. And that's sort of a standard pattern in the world. But if you want to build a huge empire and have endless economic growth, and have the largest number of billionaires on the planet, then you have to work over 40 hours a week all the time, and if you don't, then you're in danger of going bankrupt. So that's the predicament that people have ended up in. Now, the cure of course is not to do the same thing even harder... what people have to get used to is the idea that most things aren't worth doing anyway..."

~ Dmitry Orlov

http://www.theoildrum.com/node/9100#comment-885693

scrimmage · Jun 28, 2012

Re: Destination Collapse

....the Tang Dynasty was the most glistening historic period in China's history. Founded in 618 and ending in 907, the state, under the ruling of the Tang Dynasty, became the most powerful and prosperous country in the world. Particularly, in this glorious period, the economy, politics, culture and military strength reached an unparalleled advanced level.

http://www.travelchinaguide.com/intro/history/tang/

If costs had stagnated along with wages, it would take a lot less to maintain a middle class lifestyle. But costs for most middle class essentials have skyrocketed. I was struck by something I read recently in a history of the Tang Dynasty in China, circa 700-900 A.D. When costs are cheap, goods and trade are abundant and prosperity is widely distributed.Once costs rise, trade declines and living standards stagnate. Poverty and unrest rise.
http://www.oftwominds.com/blog.html

Decline and Ruin

In his old age, Emperor Xuanzong was complacent and indifferent to state affairs. Hopelessly, he indulged himself in the beauty of his concubine Yang Yuhuan. Besides, he also appointed some wicked chancellors who corrupted the political order. Meanwhile, troops on the frontiers gradually gathered together and formed a powerful military force. In 755, An Lushan aligned with Shi Siming and launched a rebellion, called the An Shi Rebellion which lasted for eight years and heavily knocked the Tang regime. From then on, the national strength was weakened daily by separatist forces in local areas. Because of the incompetence of the emperors the dominance of the eunuchs and power struggles between chancellors became increasingly intense. Hence the Tang Dynasty declined from generation to generation. In 859, a large-scale peasant uprising launched by Huang Chao again severely attacked the Tang regime. In 907, the last Tang emperor, Emperor Ai was forced to abdicate by Chancellor Zhu Quanzhong, who afterwards changed the state title into Liang, finally putting the ever powerful and mighty Tang Dynasty to an end.

http://www.travelchinaguide.com/intro/history/tang/

scrimmage · Sep 20, 2012

Re: Destination Collapse

"No need to rush; the end of the world is only the end of the
world as you know it."
-Mark Strand

September 20, 2012
Time to Abolish the American Dream
The Waning of the Modern Ages
by MORRIS BERMAN

3. What, then, is that alternative worldview, that "new civilizational paradigm"? In Why America Failed I lay out, unsurprisingly enough, the reasons for why America failed, and I say that it was primarily because throughout our history we marginalized or ignored the voices that argued against the dominant culture, which is based on hustling, aggrandizement, and economic and technological expansion. This alternative tradition can be traced from John Smith in 1616 to Jimmy Carter in 1979, and included folks such as Emerson, Thoreau, Lewis Mumford, Jane Jacobs, Vance Packard, and John Kenneth Galbraith, among many others. In England it is particularly associated with John Ruskin and William Morris, who argued for the need for organic communities with a spiritual purpose, for work that was meaningful rather than mind-numbing, and who did manage to acquire a large number of American disciples. In a forthcoming book by a colleague of mine, Joel Magnuson, entitled The Approaching Great Transformation, the author states that we need concrete models of a post-carbon economy, ones that break with the profit model of capitalism—and not in cosmetic or rhetorical ways. He gives a number of examples of experiments in this vein, ones that I would term elements of a steady-state or homeostatic economy: no-growth, in other words. After all, writes Magnuson, "permanent growth means permanent crisis." Or as I have put it elsewhere, our job is to dismantle capitalism before it dismantles us. Again, this does not mean taking on Wall Street, which I don’t believe can succeed. But it does mean leaving the field: for example, seceding. (Movements for secession do exist at this point, Vermont being a prominent example.) And if that’s not quite viable right now, there is at least the possibility of living in a different way, as David Ehrenfeld suggests. My guess is that "dual process"—the disintegration of capitalism and the concomitant emergence of an alternative socioeconomic formation—is going to be the central story of the rest of this century. And I suspect that austerity will be part of this, because as capitalism collapses and we run out of resources—petroleum in particular—what choice will we have?

4. This does not, it seems to me, necessarily mean a return to some type of feudalism; although that could well happen, for all I know. But we are finally talking about the passing not only of capitalism, but of modernity in general—the waning of the modern ages, in effect. In her interesting biography of the Hegelian scholar, Alexandre Koj?ve, Shadia Drury writes: "Every political order, no matter how grand, is doomed to decay and degenerate." As for modernity in particular, she goes on:

<DIR>"[M]odernity’s inception and its decline are like those of any other set of political and cultural ideals. In its early inception, modernity contained something good and beguiling. It was a revolution against the authority of the Church, its taboos, repressions, inquisitions, and witch burning. It was a new dawn of the human spirit—celebrating life, knowledge, individuality, freedom, and human rights. It bequeathed to man a sunny disposition on the world, and on himself….The new spirit fueled scientific discovery, inventiveness, trade, commerce, and an artistic explosion of great splendor. But as with every new spirit, modernity has gone foul….Modernity lost the freshness and innocence of its early promise because its goals became inflated, impossible, and even pernicious. Instead of being the symbol of freedom, independence, justice, and human rights, it has become the sign of conquest, colonialism, exploitation, and the destruction of the earth."

</DIR>In a word, its number is up, and it is our fortune or misfortune, as I said before, to be living during a time of very large, and very difficult, transition. An old way of life dies, a new one eventually comes into being. Of this, the poet Mark Strand remarks: "No need to rush; the end of the world is only the end of the world as you know it." For some odd reason, I find that thought rather comforting.

Excerpt from:
http://www.counterpunch.org/2012/09/20/the-waning-of-the-modern-ages/

brucefan · Sep 16, 2013

Re: Destination Collapse

Sooooo.

Taper, or not?

If they do, what will happen to rates, the market? Place your bets, the seas could become very rough, very soon..

brucefan · Sep 18, 2013

Re: Destination Collapse

I guess that answers that

PUMPING MUST GO ON[SIZE=+7][/SIZE]

scrimmage · Sep 27, 2013

Re: Destination Collapse

It's all a result of "Peak Oil"[look it up],get used to a different way of living again;nothing lasts
forever,not even the "American Way"...

scrimmage · May 7, 2014

Re: Destination Collapse

Reaching limits is baked into the cake;the question's when an ultimate peak is realized,how rapid
the decline is,what remains afterward,and is it permanent,or cyclical .
Case study #1:

In August of 1944 the Coast Guard placed 29 reindeer on St. Matthew Island, a remote island in the Bering Sea. Earlier in the year they had established a radio navigation system there and the Reindeer were supposed to be emergency rations should the men be cut off from supply shipments.

A short while later, with the allies winning the war, the Coast Guard pulled their men off the island but left the reindeer there. But not to worry, the 32-mile long by 4-mile wide island had plenty of the reindeers favorite food. A mat of lichens over 4 inches deep covered the island. By 1957 the population had increased to 1,350; and by 1963 it was 6,000. But the lichens were gone, and the next winter the herd died off. Come spring, only 41 females and one apparently dysfunctional male were left alive.

From and read more at:
[URL]http://peakoilbarrel.com/natural-resources-human-destiny/#more-2848[/URL]

scrimmage · May 21, 2014

Re: Destination Collapse

The privilege of petroleum ends,the empire's not the same.
Case study #2:

Another example was documented by the PBS series NOVA titled Rat Attack.This program documents the plight of rice farmers in a remote corner of northeast India. Surrounding the rice fields in this area are forests of bamboo, a common species called Melocanna bamboo, from which the locals build their homes. And living in this tropical bamboo forest are rats. This is not unusual as rats live in all tropical forest around the world. But the rats are few enough in number that they pose no serious threat to the rice and corn farmers in the area

However once every 48 years all the bamboo flowers, fruits then dies. The Melocanna bamboo produces a fruit, a seed pod, that is as large as an apple, some 200 times larger than the average bamboo seed pod. Over the period of a few months some 10 tons per acre of this fruit will ripen and drop. This indeed brings about times of plenty for the rats in the area.

One species of rat, the black rat, is particularly adapted to take advantage of this cornucopia of food. In the right conditions their numbers will shoot up exponentially.

When the bamboo fruit first appears around this one particular rice field the black rats numbered perhaps 100. By the time all the bamboo fruit had all ripened, fell and most of it consumed by the rats, a period of about six months, the black rat population numbered about 12,000. By then any fruit left in the forest had germinated and was inedible. This hoard of rats then moved into the rice fields devouring the crops causing famine in the local population.

Then, when all the food is gone the rats die off. They die of starvation. But a few, a very few will survive

From and read more at:
http://peakoilbarrel.com/natural-resources-human-destiny/#more-2848

scrimmage · Jul 20, 2014

Re: Destination Collapse

We're all like rats on a sinking feeling ship:

The earth, before the industrial revolution, could support, long term, perhaps one to two billion people. Today the earth is so degraded it can support perhaps half a billion, long term. But we are making it worse every day. Collapse is not something that may happen in the future. Collapse is something that is happening today.

Homo sapiens are deep, deep into overshoot. It was just something that naturally happened. It is nobody?s fault. It is just what happens to any species when, for some reason or another, happen upon times of plenty.

And as Richard Dawkins put it:
If there is ever a time of plenty this very fact will automatically lead to an increase in population until the natural state of starvation and misery is restored.

From and read more at:

http://peakoilbarrel.com/collapse-inevitable/#more-3874

Destination Collapse

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