[Snowrunner]

$this->bbcode_second_pass_quote('ReverseEngineer', 'I')ts not likely right now, you need some War here to force the issue some. It would depend on how the players line themselves up. First you wold start by issuing a currency local to the US, and then try to use the military to broker power deals. Others will no doubt set up their own blocs possibly around the Euro or Yuan.

[ReverseEngineer]

$this->bbcode_second_pass_quote('Snowrunner', 'T')he US doesn't have the ability to wage the war to get things their way. If the US would issue a brand new currency then everybody else would rightly be very very pissed at them and not listen to anything. The US Military by their own account is stretched to the breaking point and even back in 2006 a report surfaced where the Military assumed it would take at least ten years to rebuild in a fighting form once all the troops could be brought home.

[BigTex]

$this->bbcode_second_pass_quote('MrBean', 'I')'ve lived through one severe depression, the Nordic one that began 1989 - and it sortta never ended, breadlines never went away, they've been slowly growin, now faster and Salvation army is running out of parcels. Depression is feeling and now the whole globe is depressed. Yes it is depression, has been for a long time. There is no official quantifiable metric for depression so of course it will be neve declared by the "officials.

[Snowrunner]

$this->bbcode_second_pass_quote('ReverseEngineer', 'I')ts quite correct that the US no longer has the power to win a war outright and evxert influence on a military level that way. Nobody does anymore really. That is not the only type of military solution though, as others demonstrate in their battle AGAINST the US.
Though the US does not have the power to win a war by straight military means, it does have the most hardware and the greatest potential of becoming the world's worst Terrorist nation, if it isn;t already.

[ReverseEngineer]

$this->bbcode_second_pass_quote('Snowrunner', 'W')hat incentive should the rest of the world have to do what the US wants them to do?

[shortonoil]

Reverse Engineer said:

$this->bbcode_second_pass_quote('', 'S')omething along those lines probably plays out, so its a reasonable compromise. TPTB will no doubt keep on printing money until it finally starts hitting the general economy, but jeez the notes will have to go into the Trillions here to cover the debt sink. They could overshoot the printing easily for a few months and it could finally find its way into the general economy, but that would assume there is a general economy left by that time. As it appears with the rapid collapse of trade and the rapid collapse of industry, there simply won't BE products to buy with inflated currency by the time it gets that far.

[ReverseEngineer]

$this->bbcode_second_pass_quote('shortonoil', 'T')o accomplish this "printing" it will require a functioning banking system and a working central bank. The world wide wholesale destruction of assets, that has occurred over just the last year, has been so immense that it seems doubtful if any functioning monetary system will remain in existence long enough to allow for significant printing.
Even though we may get a short hiatus as oil producers shut down exploration and development projects (this see-saw of declining and increasing ERoEI occurred in the US during the seventies after its peak) its seems unlikely in the face of the present destruction that it will produce any more than a short term and negligible effect.
The FED (and everyone else) is expecting an uptick in the general economy to save them. As outlined in the Available Energy model this will not occur (except for the minor exception noted above). The economy will continue to deteriorate by 3.5 to 5% per year (possibly as much as 6%). Those now playing their last cards in expectation of an improvement in the situation will collapse.
By early summer expect an avalanche of bankruptcies in all sectors. Banking, manufacturing and retail firms will fold in huge numbers. US government, state and local tax receipts will collapse in response, and huge pressure will be brought to bare on US held debt. Spreads on corporate and government debt will close as rates on Treasuries increase.
Doubt will flourish as to whether or not the US will be able to service its debt. The FED, which is now backed by $2.6 trillion in junk bonds, will become viewed as insolvent, and the economy will continue to worsen.
The era of neo-classical economics and its distain for the physical sciences, lack of boundary conditions and non-validated hypothesis will come to and end. Much of modern industrial society will come to an end with it.

[Quinny]

RE - I fear it's going to be tough and could collapse like you said, but as you've said many times real wealth is nothing to do with the fiat money that floats around

Real Wealth is food, goods that can be used, skills to help others and of course the relationship's with friends family and community that allow us to work collectively.

There is still enough food created in the world to feed everyone, it just needs to be shared out more equally. This has been impossible during the time of greed we've lived through over the growth years, but as the McMansions get reposessed and the middle class lose their imaginary wealth it might make them realise that less might be better then SFA!

This depression is going to be a nightmare and I'm fearful for my kids, but I have been amazed at the way that all asset classes have devalued. The price of oil has also taken me by surprise and depression could work out to be better than we might get from Peak Oil's.

With bit of luck it might also fuel an international workers movement that actually does take over the means of production!

It'd be tough, but maybe we could make it through?

[Quinny]

RE - I fear it's going to be tough and could collapse like you said, but as you've said many times real wealth is nothing to do with the fiat money that floats around

Real Wealth is food, goods that can be used, skills to help others and of course the relationship's with friends family and community that allow us to work collectively.

There is still enough food created in the world to feed everyone, it just needs to be shared out more equally. This has been impossible during the time of greed we've lived through over the growth years, but as the McMansions get reposessed and the middle class lose their imaginary wealth it might make them realise that less might be better then SFA!

This depression is going to be a nightmare and I'm fearful for my kids, but I have been amazed at the way that all asset classes have devalued. The price of oil has also taken me by surprise and depression could work out to be better than we might get from Peak Oil's.

With bit of luck it might also fuel an international workers movement that actually does take over the means of production!

It'd be tough, but maybe we could make it through?

[shortonoil]

$this->bbcode_second_pass_quote('ReverseEngineer', 'W')hile I see the rapid deflation scenario as likely, I also do not see the one day its working next day the Zombies are running Amok scenario to occur immediately in the aftermath. So how would you project steps to be taken along the way that stop the immediate devolution to Zimbabwe-like conditions?

[ReverseEngineer]

$this->bbcode_second_pass_quote('shortonoil', 'G')et involved in your local government. You could go down to your town offices and say, "listen you moronic bunch of troglodytes, just in case you haven't noticed, the wheels are coming off"
That is what you will feel like saying, but it is probably not the best course of action to take. Put an ad in the local newspaper; hold a meeting at the local library, school, church or some other public place. Present it as a contingency plan. You will be amazed at how many confused, worried people are out there right now looking for answers.
Beware of official organizations, like Home Land Security, FEMA and etc. These folks could become really dangerous when the time comes. Remember that their real purpose is to preserve the federal government. It is not to protect you.
When things get bad enough move your team into local positions. If you have a half way logical plan, people will embrace it. Most in positions of power are now so invested in their own political quagmires and self interest that they will be completely at a loss.
Last but not least, make up a pile of copies of the Constitution of the United States. Plaster them every where and live by its true intent and spirt. It worked in 1776, it can again.
The best anyone can do is help to preserve their local areas. If enough local areas can be saved, regional areas will emerge in time. DON'T let them talk you into more of their money. In a post peak world it won't work any better than what we have now.

[MrBean]

$this->bbcode_second_pass_quote('ReverseEngineer', 'S')top whitewashing it Short, tell us what you REALLY think
This is the deflationary hypothesis that I tend to see as more likely than the inflationary one. Despite the fact TPTB are printing a mile a minute, the air is escaping the balloon faster on the other end into the black hole of debt. They just can't get money circulating in the economy fast enough to keep the businesses running. You can only reinflate a balloon if there is integrity to the rubber, the problem here is that it got inflated so fast that it EXPLODED and is basically in tatters.
Certainly it will be interesting to see just how much is still operating come Summer 2009. Also interesting as to just when some sort of Emergency Measures will be undertaken in critical services areas such as food production and distribution, or if they are simply too Dazed and Confused to even do that.
The next question would be on the assumption of complete meltdown of the Federal Goobermint, on what level and how fast would State or Local Goobermints act without money flowing into their coffers either?
While I see the rapid deflation scenario as likely, I also do not see the one day its working next day the Zombies are running Amok scenario to occur immediately in the aftermath. So how would you project steps to be taken along the way that stop the immediate devolution to Zimbabwe-like conditions?

[MrBean]

$this->bbcode_second_pass_quote('ReverseEngineer', '')$this->bbcode_second_pass_quote('shortonoil', 'G')et involved in your local government. You could go down to your town offices and say, "listen you moronic bunch of troglodytes, just in case you haven't noticed, the wheels are coming off" -snip-
The best anyone can do is help to preserve their local areas. If enough local areas can be saved, regional areas will emerge in time. DON'T let them talk you into more of their money. In a post peak world it won't work any better than what we have now

[ReverseEngineer]

$this->bbcode_second_pass_quote('MrBean', 'I')'m as lonely as any guy. But I've seen and I know, the localism thingie is not post- it's now. It's very simple, being friends, having friends. When everything else collapses, what lasts is friendship.

[shortonoil]

$this->bbcode_second_pass_quote('', 'A')bsolutely, a network of friends is important to develop right now. Its also good to encourage them to prep up and be as prepared as you can be for the coming storm. However, actually putting in place schemes for feeding and protecting the community pretty much have to wait until the current structure for that breaks down.

Reverse Engineer

[patience]

Before I can think about what might happen with a bankrupt Fed.gov, I need to figure out what it is really that they DO now? All I can see is that they collect taxes, then give back much less than what they took to the states so they can tell the states how to spend it. As in roads, schools, and stuff. All they want is to collect taxes and be boss, right? I can't tell from 4 states away that they did much to help in NOLA. It's sorta like the Red Cross that seeks donations, then, when we have a flood here, they ask for donated clothing, and then SELL it to somebody whose home just went down the river. (Personal experience here--I yanked back the overcoat I donated from the Red Cross guy, and GAVE it to the needy man.)

Tranfer payments are a transfusion from your right arm to your left arm, WITH A LEAKY HOSE!

So, if this be all they do, how can we not be better off if they are broke and just stay home? Somehow, in 1950, we got along with a lot less govt., and did okay, if memory serves me here. The way I see things, like in real estate where all markets are local, so in govt., where the only thing that counts is local, with the exception of national defense.

Local govt and community I can relate to, and be glad to help any way I can. I just can't get my head around why a bankrupt Fed is so bad, nor why I would care.

edit to add: Okay, there are a lot of Great Society handouts that would be missed. Like Social Security, and all the welfare stuff. Maybe if our kids weren't getting shot to hell somewhere halfway around the world, then those kids could be helping out at home? That would put an end to the need for increases in Veterans' benefits (getting cut anyway). Yes, transition from a nanny state to the old way would be bad. The end result appears to me to be an improvement.

[ReverseEngineer]

$this->bbcode_second_pass_quote('shortonoil', 'H')aving a plan in place before the zombie hordes or thrashing whale of a collapsing federal government appear is better than having no plan at all. Even if it has to be modified on the fly, at least you can have some confidence in who is modifying it. Someone you know is better than some bureaucratic from Washington who is mainly concerned with their superior's opinion of how they are handling the situation.
After plunging the nation into the last three needless wars, emaciating personal freedoms and putting us into $54 trillion of debt, ask; could your neighbor have done a worst job if he tried!

[MrBean]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', 'A')bsolutely, a network of friends is important to develop right now. Its also good to encourage them to prep up and be as prepared as you can be for the coming storm. However, actually putting in place schemes for feeding and protecting the community pretty much have to wait until the current structure for that breaks down. Reverse Engineer

[shortonoil]

patience said:

$this->bbcode_second_pass_quote('', 'Y')es, transition from a nanny state to the old way would be bad. The end result appears to me to be an improvement.

[ReverseEngineer]

$this->bbcode_second_pass_quote('patience', 'T')he way I see things, like in real estate where all markets are local, so in govt., where the only thing that counts is local, with the exception of national defense.