[SeaGypsy]

It appears the EU is prepared to risk hyperinflation against fiscal propriety to save the Euro. The US is effectively licensed to do likewise. Hence: BAU for at least another 3 years. Unless the Arabs (gross generalization intended) can't get enough 'real money' (ie. real actual hold it in your hands/ smelt it and make copies of famous antiquities type money) for their bits of paper from Europe and America, they will revolt.

So what we have is:
A 'compromise with the devil' whereby the US and EU delay the inevitable (end to growth) perpetuating the impossible (endless growth) and in the end leaving their creditors (some of them nasty and well armed) holding useless notes, whence once was the greatest commodity on earth ever. My oh my are they getting upset by now?,... Then the other guys, the competition, well that's a whole 'nuther story...

Given there is a lot (probably enough to trigger WW3 for real) fake physical or certified but non existent gold/ not yet existent gold/ gold which is based on a particular oil price for extraction;

Given that once the idiotic euphoria triggered by the debt deal in Europe wears off, the slide to oblivion under debt weight resumes and exacerbates.

Given that blind Freddy will shortly be able to see that Lazarus is not rising from the dead.

Gold is going to go absolutely stupid in price.

Forex markets are going to go in one direction for the term of infinite debt/ away from the dollar and the Euro. After a little spike the next few days or weeks, maybe the odd upward spurt, solidly down. By 2020-22 USD as reserve with Euro in parallel is over.

Israel will have to wait.

Peak oil has eaten the backside out of the global economy and the only way to keep it from death by blood loss is to trick those selling blood into accepting IOU's which extend out to our great grandchildren.

As has been said so many times, this will not end well.
As has also been said, at least we have some more time to prepare.
And don't just say "Tomorrow Tomorrow" because the Bell Tolleth for Thee.

[Revi]

It would be nice if it held up for another 6 years, because that's when I plan to retire and sell everything, but it looks like about 3 years is the maximum we can hold onto business as usual. That's not too bad, considering. Man plans and god laughs. There is no way to guarantee that anything is going to be holding up for long nowadays. It's the way people lived before the fossil fuel boon. We have no reasonable certainty of anything, so we have to have a little faith.

[eXpat]

Anything will be done to avoid the collapse.

[patience]

No doubt in my mind about the direction we are headed as you described. I keep wondering how the various govt's. will REACT to the inflationary results of their actions? Do they stick it to the bitter end, and wind up like Weimar? Or are their other steps to be taken along the way? Gold confiscation comes to mind, with a pegging of the Dollar/Euro to gold at some jacked up price like was done in the Drity Thirties. How about a dose of austerity along the way? Maybe some serious cuts to this program or that? Looks like we may have military cuts happening, as troops are brought home and personnel mustered out, I've been reading.

It is the govt's. REACTIONS that I worry about. They are pretty much guaranteed to be short-term answers to the long term problem of overindebtedness, given the short-term thinking of politicians, and the shorter attention span of the general public. Whatever they do, the govt. reactions will shape our mid-term future, and probably the longer term as well. There are lots of parallels here to post WWI Germany, and we all know how that turned out.

Ideas anyone?

[Outcast_Searcher]

Anything will be done to avoid the collapse.

You make good comments on these issues - so this is a serious question.

By "collapse" do you mean they'll do anything to avoid a deflationary collapse?

It seems to me if they just print money that this will DELAY things, but EVENTUALLY, the velocity of money will increase, inflation will raise its head, and rampant (or even hyper) inflation will ensue -- once people finally realize they've been had by the "experts" in Washington.

Won't the economic results for anyone not holding LOTS of tangible assets be (more or less) "collapse" when that inflation ensues? (It will be ugly for everybody, of course).

[Cog]

Before they hyper-inflate they will seize 401K and pension funds and give you a sort of guarnteed income(enough to eat and keep some sort of plywood over your head), then they will proceed to nationalize anything that isn't based off-shore.

They still have a lot of tools to use before they try to print their way out.

[eXpat]

Anything will be done to avoid the collapse.

You make good comments on these issues - so this is a serious question.

By "collapse" do you mean they'll do anything to avoid a deflationary collapse?

It seems to me if they just print money that this will DELAY things, but EVENTUALLY, the velocity of money will increase, inflation will raise its head, and rampant (or even hyper) inflation will ensue -- once people finally realize they've been had by the "experts" in Washington.

Won't the economic results for anyone not holding LOTS of tangible assets be (more or less) "collapse" when that inflation ensues? (It will be ugly for everybody, of course).

I think no one knows for sure what shape collapse could take, but to me, it means something like Argentina in 2000 or what is still unfolding in Greece, declare default, bank runs, hiperinflation, force nationalization of bankrupt companies to keep basic services running, banks falling like dominoes, increased taxation, reduction of private activity, etc. Socially, that translates into higher criminality, theft of public property, even those that ensure basic services (see those telephone and electricity cables out there, that means money to someone), looting, general strikes.
Is nothing new, check in third word countries that have lived through that situation already, is the same old beaten path.
Printing money will delay things, of course, no doubt about it, as it did in many third world countries, but the piper will come nevertheless. Look at the present situation, how is USA fighting the debt problem? creating more debt. Ditto for the EU. That game can be carried just so far, certainly not in aeternum.
And after that, does the West have the manpower and the resources to rise again, with Chindia as the new power and in a world living in the downward slope of the PO curve? I very much don´t think so.
At the moment, that is my opinion of the present situation, and haven´t seen any hard data or examples from the past, that say we can avoid a crash.
I believe TPTB knows this already, of course, that´s why anything and everything will be tried to delay the outcome.

[Revi]

I think things are going to deteriorate even more, but the government and the powers that be will put up a kind of a smoke screen of media telling us that it's fine and that the economy will recover. Sort've like what's been happening. Only it will become more and more obvious that nothing's getting better and that the reality is far worse than they say.

The reality is pretty hard for a lot of people around here now. We have to figure out another economy that the banksters can't get their hands on.

[kublikhan]

It seems to me that so far private sector deleveraging has been outpacing public sector debt expansion, at least in the US. Thus total debt has been shrinking since the crisis started. Would the US actually have been better off without any stimulus? Should we take our medicine all at once? Wouldn't that drive the country even deeper into depression? Perhaps we are better off deleveraging slowly than going for a sudden collapse.

With companies paying off debt and therefore decreasing their leverage reduces growth opportunities, which leads to a balance sheet recession. The Lost Decades were caused by balance sheet recessions for the same reason. Deleveraging happens during times when asset bubbles burst such as the US housing bubble and the underlying assets become worth less than the equity left in the investments, at which time investors sell the assets and pay off the debt. Deleveraging is also the reason why the expected massive inflation due to QE has not realized, since the extra liquidity in the system is offset by the reduction in leverage by corporations and individuals.

If we look at real per capita liabilities in the US, we can see that they have steadily decreased since the financial crisis, illustrating the point that the private sector is deleveraging by paying off debt. Without investments and better use of cash by the private sector, unemployment will stay high since companies are not growing and hiring. Even though we don’t belief in excessive stimulus and taking on more debt, in this case more stimulus is needed in order to maintain stability in aggregate demand, if that is the wanted outcome to keep GDP from collapsing. Others may argue let aggregate demand and therefore GDP collapse for a massive recession and possibly depression in order to fix the broken financial system to eventually implement a newer more stable system. Both sides of the argument can be taken and each comes with its pros and cons.

So what should be done? As we have previously mentioned we belief that new economic theories are needed, short term stimulus is acceptable in order to keep aggregate demand stable to keep the economy from collapsing during a period when a massive asset bubble bursts, on the other hand stimulus needs to be controlled and normal recessions should be embraced. We belief that the FED and ECB will implement further stimulus. The central banks have little choice but to pump more money into the financial system to keep GDP from collapsing, even though the economy will further get worse and worse unless the private sector finds better use of money than to pay down debt. As we know consumption is what drives the US economy, but since the private sector chooses to save and pay off debt, consumption is curtailed and therefore leads to another recession and continuing high unemployment.

Deleveraging – A Balance Sheet Recession

[Cog]

There is no better use for money right now than to pay down debt. Debt brought us to this place and it must either be paid off or defaulted upon. The government thinks otherwise but they are wrong as usual.

A recession has a great deal of value if it is allowed to run its course without government intervention and stimulus. That being to clear bad debt out of the system. Since that was not permitted to happen, we have merely delayed that day of reckoning and made the outcome much worse. All of that bad debt is now owned by you the taxpayer in the form of Fannie, Freddie and a $16 trillion dollar federal debt.

[rangerone314]

Could always cash out into gold, leave the country and go to a place with less debt.

[Loki]

There is no better use for money right now than to pay down debt. Debt brought us to this place and it must either be paid off or defaulted upon.

What do you think the printing is for? Hyperinflation is default by another name.

When it comes to personal preparedness, the priority of paying down debt depends on an individual's financial situation and whether they want to bet on deflation or hyperinflation.

I have no idea myself, though our monetary policy does seem to be balancing the razor edge of hyperinflation. In which case religiously paying down debt is kind of a sucker's game, unless it leads to outright ownership of useful assets.

[Corella]

It appears the EU is prepared to risk hyperinflation against fiscal propriety to save the Euro. The US is effectively licensed to do likewise. Hence: BAU for at least another 3 years. Unless the Arabs (gross generalization intended) can't get enough 'real money' (ie. real actual hold it in your hands/ smelt it and make copies of famous antiquities type money) for their bits of paper from Europe and America, they will revolt.

So what we have is:
A 'compromise with the devil' whereby the US and EU delay the inevitable (end to growth) perpetuating the impossible (endless growth) and in the end leaving their creditors (some of them nasty and well armed) holding useless notes, whence once was the greatest commodity on earth ever. My oh my are they getting upset by now?,... Then the other guys, the competition, well that's a whole 'nuther story...

Given there is a lot (probably enough to trigger WW3 for real) fake physical or certified but non existent gold/ not yet existent gold/ gold which is based on a particular oil price for extraction;

Given that once the idiotic euphoria triggered by the debt deal in Europe wears off, the slide to oblivion under debt weight resumes and exacerbates.

Given that blind Freddy will shortly be able to see that Lazarus is not rising from the dead.

Gold is going to go absolutely stupid in price.

Forex markets are going to go in one direction for the term of infinite debt/ away from the dollar and the Euro. After a little spike the next few days or weeks, maybe the odd upward spurt, solidly down. By 2020-22 USD as reserve with Euro in parallel is over.

Israel will have to wait.

Peak oil has eaten the backside out of the global economy and the only way to keep it from death by blood loss is to trick those selling blood into accepting IOU's which extend out to our great grandchildren.

As has been said so many times, this will not end well.
As has also been said, at least we have some more time to prepare.
And don't just say "Tomorrow Tomorrow" because the Bell Tolleth for Thee.

What would be the alternative? Deflation instead of the risk of hyperinflation? Problems made up over decades cannot be solved all at once. The more we would need agreements beyond all ponds. A nation itself cannot get away from growth- and fossil-dependency alone. And you might underestimate the potential of qualitative growth. A good example is Greece, since its very problem is missing of organization by public authorities...

[mmasters]

At this point it's just a global bailout which stops hyperinflation. There's no end of the dollar, or any major currency it's just all being pooled together for printing. As long as they balance inflation and deflation the end result is an up and coming global third world with socialism for the rich, the causualties are the middle and lower classes, the future generations and non essential services. Much of the economy is services anymore anyway. The fact most people are stupid and don't understand economics is as good as mind-control technology for the masses as far as the system is concerned. They're easy enough to keep occupied texting with wireless tablets, youtube, twitter and facebook (you-twit-face).

I think from here on out it's just going to look more and more third world and alternate from recovery (recession) to recession (depression) and back and forth. The energy situation will ensure it never gets much better than that. IMO there's too many stupid people out there to ever fix this thing.

The sideshow will be what innovation comes out of it all, give enough time we'll probably have helmets you wear which connect to you the internet and you can communicate with others virtually and do work that way. Then all you have to do is sit in some coffin somewhere and use thought energy. The masses can dig their own graves that way.

[AgentR11]

The sideshow will be what innovation comes out of it all, give enough time we'll probably have helmets you wear which connect to you the internet...

Teacher: "Hey Anderson, come with me for a moment."
they walk out of the classroom and into an office down the hall.

Teacher: "Your test scores are truly amazing, would you like me to show you something *really* different?"
The teenage boy nods, both suspicious and intrigued.
Teacher: "Try this"; the boy sips the cup, and then collapses unconscious... but then wakes, but wasn't where he was before.

In fact, looks like a scene from a science fiction episode.

Teacher: "Welcome Neo, this is Control, and we run the matrix for billions upon billions of lesser minds. Today you join us. Millions will depend upon your talent and skill in order to live pleasant, uneventful lives while laying perfectly still in an itty bitty box. In return, you now have access to the true, physical world.

Will you stay with us, or do you wish to return to your old box?"

[SeaGypsy]

Theater, cinema, the matrix, consensus.
When, where and whether to drill, therin lies the question. (dualism int)

For those already decided, all this adds up to the building extremes predicted having risen.
So with oil at the highest ever average we can only squeeze out an extra squirt proportionate to the year's population growth in Bangladesh.

The US managed to poison, boil and bake it's way up to ONLY importing 75% of it's mandatory minimum at half speed.

Meanwhile there is all that fake gold. Then there is the real gold. Then there is post currency collapse trading. There has to be an entity to trade. Post currency collapse, who will be that entity? Those are the specific concerns keeping me awake. We are nearing snapping point.