Thursday, June 01, 2006

There's little hope for the future

As the oil crisis worsens in the years to come there isn't much to fall back on. America doesn't have a savings account, only debt. Almost 5% of home mortgages are more than 30 days behind in payments today and the economy is still growing! The average household credit card debt level is about $10,000. Yes, that's a one with FIVE zeros behind it. What's going to happen when GDP goes negative?

For those reading this blog who still have hope for the future you really need to start reading about peak oil. Some of my friends read this (you know who you are) and have refused to invest in gold (which I pimp on a regular basis to them) or other precious metals. You know who you are and there's going to be a big "I told you so" when the Dow is going down and gold is going up. Those two will probably cross at about 3500 creating an X on the chart and I'll be laughing all the way to the coin shop.

An omen of the future comes from Zimbabwe where the current inflation rate is 1,000% per annum. Their central bank is coming out with a note worth $100,000 Zimbabwe dollars. This bill replaces the $50,000 dollar note which only came out about four months ago. Zimbabweans are carrying around thick stacks of cash just to buy food. Hmm, sounds like Germany a few years back. I wonder how long it will take before the Zimbabweans are paid twice a day, every day. The new improved note (only improvement being more zeros) is worth about thirty cents in the US. That's right, $100k worth of Zimbabwe dollars can't even buy you a loaf of bread in the US. It can't happen here, right? Don't be so sure.

Nik saw a good sign of collapse on Sunday afternoon. He and Liz, on their way to my place, saw someone throw a paper plate out of a car window. Liz was disgusted but Nik was overjoyed, "Ah, society is colapsing, nobody cares about anything, the end is near" he thought. I think so too.

That's how little people have to care because someone else is paid to clean up the streets with an oil powered machine. About a fourth of all people living in metropolitian areas are dependent on the government for food, clothing and shelter and don't have to give a shit about anything. They'll be the first to go hungry in the coming depression.

You think they're building walls down on the Mexican border because of the current situation? Oh, no way, they're planning for the future. The US government will have enough starving Americans to worry about, they gotta keep the starving Mexicans out. And the bottom line is they will try to feed people by devaluing our currency.

Most wealth will be wiped off the map in the future of the stock and bond markets. People who were comfortable with thier IRA balances will become paupers in short order. The whole thing is overvalued because there is a finite amount of financial instruments out there for all the money to chase. There's inflation in the stock market just like any other supply and demand equasion. Too much money chasing too few goods has driven the prices to the stratosphere.

I for one can't wait until our governments can't sell any more bonds becasue nobody has any faith in them. I can't wait for China to dump its foreign currency reserves of dollars in favor of euros, riyals and gold. I can't wait for a nice healthy 10% inflation rate in the US to cripple the stock market. I just want everyone to realize that you can't depend on government for your well being. Let the collapse come. I'm ready, mentally and financially. Every day the Dow drops and the fed prints another sheet of bills I'll be getting wealthier.

Its too late to change course now. No matter how you act, vote or think, you change nothing until you change the way that money works. There is no hope, only waiting.

2 Comments:

Blogger Max said...

Here's my 'end of the world is upon us' story. Tuesday evening after finishing a rehearsal, I stopped at Super America to get one of those giant sized slushies that they're selling for $.79 because I'm a sucker for slushies and for anything that costs seventy nine cents.

An older gentleman, probably in his late sixties or early seventies was standing in front of me in line to buy gasoline. He approached the register and said "I would like to prepay the pump for ten gallons of gasoline". The clerk said "Ten dollars? You mean ten dollars, right?".

"No, ten gallons"
"Our computers won't let people pay in gallons, you have to pay in dollars."
"I know, I want to pay for ten gallons of gasoline in dollars."
"Okay, let me figure out how much that's going to be," said the cashier as he went for the calculator. I looked at the old man and we both had that horrified expression that you get when you know you're of the same species as the moron behind the counter, and they really are that dumb.
Well, the kid did the math, ten gallons of gas at $2.799 a gallon was going to be $27.99, imagine that.

When cashiers are using calculators to move decimal points, what chance do we have of explaining long term financial issues to the masses?

7:57 PM  
Blogger Rex said...

Max, you're right on point. Most Americans don't even want to try to understand macroeconomics. Those people just cash their paycheck, pay the rent, buy some groceries, gas and useless junk at Wal-Mart and watch some prime time TV. I admit that I have a hard time wraping my mind around some of the economic principles but I get the just of it. Even if most Americans cared and wanted to learn, the problem is they all went to public school and couldn't understand it if they wanted to.

10:31 PM  

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