[ReverseEngineer]

$this->bbcode_second_pass_quote('Loki', 'W')ell guess we'll just have to agree to disagree RE. I'm not a true believer when it comes to this "everything will collapse and we'll be back to the stone age" meme. Sorry, but I think it's Chicken Little stuff. Yes, there's an uncomfortably high probability that we'll be living in a grinding Greater Depression for many years (perhaps a generation or more). But TEOTWAWKI? The probability of that is exceptionally low, too low to devote my entire life to.

[Loki]

$this->bbcode_second_pass_quote('ReverseEngineer', 'I') never said you should devote your entire life to it.

[Revi]

I think the best investments you can make nowadays are cast iron pans and firewood. How can you go wrong with them? You can always cook things with the cast iron pan. If the electric stove doesn't work, use the firewood in your woodstove to cook things.

How can it go wrong? It's a foolproof plan.

Them's your real commodities.

[Arsenal]

I agree with Loki on this one. $200 of TP for personal use... OK.. Stocking the stuff to trade. Useless. It may not be the norm now but if it really gets that bad then TP will be on the bottom of everyone's list. People CAN go without TP, shoes, and other useless stuff. Food, water, shelter.. people can't go without those. Look at the pictures of the GD and you will see people without shoes and people still ate and drank. A still would be a great investment. Most "adults" will still drink before worrying about their kids shoes. Not responsible but true.

[Arsenal]

$this->bbcode_second_pass_quote('Revi', 'I') think the best investments you can make nowadays are cast iron pans and firewood. How can you go wrong with them? You can always cook things with the cast iron pan. If the electric stove doesn't work, use the firewood in your woodstove to cook things.

How can it go wrong? It's a foolproof plan.

Them's your real commodities.

[threadbear]

I think one of those "brew your own" places, as a franchise, will do quite well.

[ReverseEngineer]

Beyond all the ways the American people are being taken to the cleaners by the bankers, this one is the most egregious:

$this->bbcode_second_pass_quote('', 'T')he Fed has consistently rejected requests to disclose more information about which assets it is taking as collateral for its lending programs. Bloomberg News sued under the Freedom of Information Act this month, requesting the information; the Fed refused, responding that the information was protected because it is confidential commercial information, and because it is being kept by the Federal Reserve Bank of New York, which it argues is not subject to FOIA.

At a hearing last week, Rep. Spencer Bachus (R-Ala.) asked Bernanke: "When do you anticipate letting the public know" what assets you're taking? Bernanke then argued that disclosure would be counterproductive -- his answer, in effect, being never.

[uNkNowN ElEmEnt]

I have heard consistently that the population en mass is too ignorant to know what is going on or to dumbed down to care. but this would seem to indicate taht there is at least a core population who is awake and demanding answers even if they are being ignored.

Any idea how big it is and if they would be the root of a revolution: being smart enought to insight the masses and understand the US is being destroyed out from under them?

[ReverseEngineer]

$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'I') have heard consistently that the population en mass is too ignorant to know what is going on or to dumbed down to care. but this would seem to indicate taht there is at least a core population who is awake and demanding answers even if they are being ignored.

Any idea how big it is and if they would be the root of a revolution: being smart enought to insight the masses and understand the US is being destroyed out from under them?

[mefistofeles]

I don't know how to tell you this but America is already gone. The price of gold seems to prove it. It went up from 740-815 in less than a week.

As gold rises the dollar wanes.

Soon oil will begin making a massive breakout, although I really don't expect to see any dramatic price movements until gold breaks the $900+ mark.

To be honest with you its possible there isn't going to be any country in the latter stages of 2009,although this possibility is extreme I can't dismiss it altogether.

In the meantime to me at least it seems wise to borrow in worthless dollars and cash out assets in gold or crude.

Think of it this is a once in a lifetime opportunity to make money. Borrow to buy real assets give the lenders paper in return.

This is the ultimate carry trade. Buying real stuff with soon to be worthless money.

Its both a sick and beautiful idea.

[jupiters_release]

$this->bbcode_second_pass_quote('ReverseEngineer', 'a')nd there will be a battle coming down here at the top of the food chain such as has not been seen since the days of the collapse of the Roman Empire.

[frankthetank]

The avg American can't afford this. If you do the math, its a lot of money per person (every man/woman/child). The ONLY way i can see these guys getting their money is to get it out of pension funds. I don't think they understand you can't take money from people that don't have any.

[ReverseEngineer]

I am bumping this thread back up because of some discussions going on in other threads regarding the outcomes of deflation, inflation or monetary collapse, as the case may be here in the coming 3 month-4 year time period. The purpose here is to step out of my typical Sooper Doomer spin to analyze some possibilities that are not quite so spectacularly horrific as marauding Zombies, debt prisoners eating Cockroaches and an economy based on Prostitution. Thank you EU for contributing those last two entertaining scenarios to the Peak Oil zeitgeist. LOL.

Anyhow, when asked by some who aren't so familiar with deflationary and inflationary outcomes as to what to expect here in the US over the coming months/years, our Pundits here often respond with "think Argentina" or "think Iceland". Although its certainly conceivable we suffer a similar downspin, right now I don't think its likely to play out in quite the same way or in the same time frame mainly. I'll try to explain my current thinking on this, feel free to shoot holes in it if you like. It puts me at odds with some of my closest analytical matches here, Cid Yama and ShortonOil, so I'll be interested especially to see how they dissect this scenario and analysis.

The US differs from Iceland and Argentina in several fundamental ways. First off is size and natural resources. The US is much larger than either of those two countries, with the definite ability to feed itself even in the scenario of complete monetary collapse. There is sufficient oil coming out of just our own remaining GOM rigs and the North Slope to if push came to shove could be directed solely at the food production and distribution industry for at least a couple of year. Meanwhile, as the rest of the world slides into econmic chaos as great as our own, we can still negotiate for direct trades of food surplus for oil, particularly from the Saudis who basically are in our pocket and have been for years. The Saudis are going to starve, and fast if they cannot trade their oil with a major food producer. Neither Argentina or Iceland fits that description.

Second, the dollar is and remains for as long as it lasts the World's Reserve Currency. Neither Iceland or Argentina's currency fits that description either. Because of this aspect of the Dollar, when the dollar tanks, so in domino fashion will all the rest of the fiat currencies. There is a big difference between when you are a small player in the game and are pushed out of the game and when the entire game collapses. In the second case, everyone is highly motivated to get a new game started; in the first case, the losers are left to basically twist in the wind.

Finally of course there is the difference of the Military Card, which neither Argentina or Iceland held at all. The US holds the Military card in SPADES, the only other countries that approach this are Russia and China, and they are in the same sewer we are in. It does not behoove any of the 3 majors to go up against each other, but they CAN "divy up" the rest of the world for a time here, in terms of Piracy of the resources of countries in their spheres of influence, which could be negotiated politically. I could easily see Putin, Obama and Wen Jiabow sitting down at a table and Russia being given Iran if he can take it, China being given Nigeria if they can take it, US being given Brazil and Venezuela if we can take them, etc. Fighting against each other is a No Win scenario for all 3 major powers, divying up the weaker nations is not so necessarily no win, though it certainly would not be pretty.

To bring this around to the reason I dropped this in the Solutions thread, one soluton I see coming out of this now is a 3 way breakup to 3 separate currencies, centered around the 3 major powers. The Yuan would form one currency for the Asian world and whatever they get in the divy up around the world. Depending on which way the Europeans go, with Russia (better choice for the europeans IMHO), the Russians would take on the Euro as their currency. If the Europeans Ally with the Americans, the Americans take on the Euro. If they don't, sadly one would have to expect the Amero to come out of this. If the Ruskies don't end up with the Euro, they will have to reinvent the new Ruble.

Time frame would be important here in how fast this could be set up to avoid complete collapse on a social level and devolution to social anarchy. I could see short term as a bridging mechanism Couponing for food being instituted in the US, and also local State issued currencies, or perhaps even Regional Currencies based on the breakdown I gave in the Regions thread.

While certainly there are the typical motivations toward World War here, there is also MAD, there is also the motivating factor of stabilizing your internal economy before you even try to mobilize for a World War. It will be extraordinarily difficult, perhaps even impossible for any of the 3 majors to mobilize up a war machine as long as their economies are in this kind of chaos. It took time for Nazi Germany to move from the disorder of the Weimar Republic to getting its war machine in place to decimate Europe. That also only happenned because Bankers like Prescott Bush funded that machine. The banking system is currently in chaos, and right now there is no way they can get their act together to fund a military machine, heck they cannot even keep themselves floating at the moment. The Ubermeisters themselves need a Reboot before they can try this tactic.

Conclusion here, its not necessarily true that a collapse of the Dollar will mean an immediate descent into a Zombie Wasteland. there are possible mediation schemes, and the resources of the US remain in place despite the failure of the economic system. It would of course take great Leadership to negotiate our way out of the mess without it devolving into a Thermonuclear exchange which inevitably wipes humanity off the face of the Earth. One can only HOPE that Obama has such Leadership skills in him, because he is the one we have put up at the top here, for better of for worse. He can turn out to be a puppet and a nincompoop, that is possible. If he has it in him to step up to the Plate here though, he could be the greatest President of all time.

Only time will tell how it plays out, but IMHO all hope is not lost YET. Its not Bunker Time YET. It ain't OVER til the Fat Lady Sings.

Reverse Engineer

[ReverseEngineer]

With the collapse of Bernie Maddoff's Hedge Fund, I am reading some curious material from other sources and getting what I think are some curious signals from a few of the Big Players, notably in this case Jim Rogers and George Soros. Rogers on the one hand tells us *most* big banks are insolvent.

http://www.reuters.com/article/Investme ... CO20081211

At the SAME time, Rogers pats himself on the back as being ahead of the game here and escaping to non-dollar denominated assets:

$this->bbcode_second_pass_quote('', 'N')ow a specialist in commodities, Rogers said he has used the recent rally in the U.S. dollar as an opportunity to exit dollar-denominated assets.

[RdSnt]

The argument is almost irrelevant at this level Reverse, neither of these guys is going to die poor, nor for that matter, have any worries about their general comfort level.
Their currency is pride and reputation, it's simply not about the money.

Consider Buffet and his supposed "bold" investments recently. His entire corporation and his own wealth could suddenly collapse, yet he will not want for food or shelter. The only thing that will be damaged is the magical glow that has been built around him.

We have been living in a corrupt fantasy world for 30 years, replete with untouchable magicians and demi-gods. No matter how vigorously our noses are rubbed into the fact that the elite are simply thieves (Madoff, et el ) we will hold desperately onto that fantasy.

[mark]

Don't know about Soros, but Rodgers has long been a world wide investor. Remember Investment Biker? That was in the nineties. Then with a custom built mercedes, he did it again and wrote Adventure Capitalist. Each time with a hot blond. He knows markets, people and is willing to commit his capital to his ideas. While most of these investment people are all talk, he acts. Don't think he's broke and wish him well.

[ReverseEngineer]

$this->bbcode_second_pass_quote('RdSnt', 'T')he argument is almost irrelevant at this level Reverse, neither of these guys is going to die poor, nor for that matter, have any worries about their general comfort level.
Their currency is pride and reputation, it's simply not about the money.

[RdSnt]

Much as I would love to see that retribution and wish it would be so, there are simply too many countries that have, or are currently, collapsed, for good evidence that the elite get away.
Russia of the 90's,
Current Zimbabwe
Iraq
North Korea
, etc.

In the US (just picking the obvious target ), there may be violence and panic (I'm certainly expecting it ), but it will be self-destruction. Murders in the streets, destruction of buildings, looting, etc. Sure a few rich people may be targets, but the vast majority of the elite will be untouched.

[ReverseEngineer]

$this->bbcode_second_pass_quote('RdSnt', 'M')uch as I would love to see that retribution and wish it would be so, there are simply too many countries that have, or are currently, collapsed, for good evidence that the elite get away.
Russia of the 90's,
Current Zimbabwe
Iraq
North Korea
, etc.

[joewp]

$this->bbcode_second_pass_quote('ReverseEngineer', 'I')t won't be the poor folk killing the rich, it will be the rich folks stabbing EACH OTHER in the back.

Reverse Engineer