19 June 2009

Known as the Obama Depression, It Devastated Generations Around the World

...today I got my hands on alarming graphs from the folks at VoxEU (via a column by Martin Wolf) which convincingly demonstrates that, for the much of the world, 2009 looks, without question, just as bad, if not worse, than the first years of the Great Depression. _Atlantic
Sometimes the best intentions only make things worse. Particularly when the "remedies" are piled on too high and too fast. The financial markets anticipated this governmental "blitzkrieg" of counterproductive spending and huge new entitlement programs and regulatory regimes -- which is why they crashed so far, so fast.
Former GE CEO Jack Welch discussing Obama’s financial reform plan on Squawk Box this morning:

My whole feeling [not just on the financial reform plan] is let’s slow down. I mean, we’re touching every corner of this economy. We’re going from healthcare, 20 percent of the economy, to the environment with cap-and-trade, which touches every corner. And now this. And he’s only been in there four or five months. I hope somebody in Congress says, “Whoa, let’s discuss these things and what the implications are.”
_Kudlow
If an individual's IQ drops at least 10 points when he tries to multi-task, what do you think happens to a government's IQ when it attempts rapid massive revolutionary transformation on a large number of tracks simultaneously? It crashes like the stock market.

Obviously the US President and his group of close advisors have been planning this broad and radical transformation for some time now. They are not taking these steps in order to solve the current crisis. They are taking these steps under the cover of the current crisis. Never let a good crisis go to waste, so to speak.

Unfortunately, this particular radical transformation and expansion of government would not be wise under the best of circumstances. But in the current financial instability, it is suicidal. What we are seeing is the destruction of opportunity and innovation. In their place we are seeing permanent mediocrity, as overseen by an ever-growing monstrous bureaucracy on steroids.

Don't get me wrong. The general direction of this decline has been set since the 1960s. It is the rate of decline that has become dizzying. I am not saying the bottom is falling out. But if it should happen, you may not have as much advance warning as you think. Certainly the news and entertainment media are not paying close attention to the warning signs.

If you haven't already, set aside safe stores of water, canned food and dried food. Stock up on easily transportable trade goods that will be much in demand in a financial crisis. Set aside some cash where you can get to it if you need it. Make sure you have some gold and silver coins that are easily recognisable. Devise a way of making your own power apart from the grid.

Hope for the best. Prepare for the worst.

Special Bonus: Option ARMS, the next mortgage crisis just around the corner.

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3 Comments:

Blogger CarlBrannen said...

The money supply chart is the best indication that history is not repeating itself. We're no longer on the gold standard so it's no longer possible to have deflationary depressions (at least in a country that borrows in its own currency).

Sure we're eventually going to have $100 cups of coffee, but hey, when I was a kid coffee was 10 cents.

Friday, 19 June, 2009  
Blogger Ronduck said...

If an individual's IQ drops at least 10 points when he tries to multi-task, what do you think happens to a government's IQ when it attempts rapid massive revolutionary transformation on a large number of tracks simultaneously?

That sounds like the early years of the Soviet Union.

The general direction of this decline has been set since the 1960s.

Really, the general direction of decline has been set since 1933.

Saturday, 20 June, 2009  
Blogger Hell_Is_Like_Newark said...

The Federal Reserve note was not backed by gold during the Depression. It was a fiat currency just like today. Gold and silver certificates were backed by precious metals. Gold was withdrawn (unconstitutionally) by FDR as legal tender and the government tried to stimulate the economy by focusing on the demand end. Whilst massively increasing taxes and regulations, destroying the production end of the economy (Hoover starting a trade war didn't exactly help capital formation and production either).

Gold and Silver should be allowed as currency. It offers a check on the government trying to print its way out of debt. If the fiat money is being debased, the people have an alternative.

For example:
Last month, I was given change a quarter made from silver. The year that quarter was stuck, you could buy a gallon of gas with it. Today.. based on the silver content of the coin, I could still buy a gallon of gas!

Sunday, 21 June, 2009  

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