I’ve noticed recently the same phenomenon, that though all indicators say we’re in a severe economic meltdown, and entering a “greater depression,” life still goes on as before. The lights still work, the trucks still roll and in some cases, Black Friday was a success.
But, as we noticed last night, restaurants are empty, the airports aren’t madhouses, and there’s the palpable sense from those in the know that winter is coming.
First of all, it disgusts me that our culture (yes, even the early morning “Black Friday shopping at Wal-Mart” culture is our culture) has fallen into consumerism so deeply that we become animals for a sale on plastic imported-from-China crap. It’s disgusting. There was a crush of people who were so out of individual control that they killed another person to gain first access to what they wanted. If they were hungry people, it would be a tragedy, but somewhat understandable. But they weren’t hungry. In fact based on my limited experience shopping at Wal-Mart, I would assume they were very well, and probably over-fed. This was a riot. Not a food riot, but a plastic, disposable, consumer-good riot.
Even though the first point is sufficient for this post, the more sinister second point is that because we’re (mostly) raional-acting beings, and because Wal-Mart is known for the lowest price-point on plastic crap from China, these people were rioting because they saw getting to that store’s supply of plastic crap from China as the only way to sustain their expectation of Christmas in a crashing economy. In other words, rather than attack the root of the problem by being disciplined this year and not spending money on crap, they’re doing whatever they can to maintain the very behaviors that got us in this mess – excessive consumerism.
This is exactly the same as burning food and ruining topsoil to maintain what Kunstler calls our “happy motoring society.” We grow corn (food) to make ethanol, in an effort to extend the life of the unsustainable auto-centric society, instead of banking the food and taking better care of the topsoil.
This is going to sound strange, but apart from any security responsibilities they may have dropped the ball on, I don’t blame Wal-Mart. They’re simply participating in the market and doing what they should do. I blame the culture we’ve created, the culture that will be our undoing. If we are to survive as a nation, we have to stop making shopping our national pastime, and start making things worth repairing, saving and working harder. We’re past the point of preserving our way of life, that’s a societal evolutionary dead-end.
The title of this post says it all. If you’ve paid any attention to the media coverage at all, you’re familiar with Euro Pacific Capital President Peter Schiff. He was the main punching bag for those who liked to scoff at analysts and money experts calling for recession or worse the past couple years. Schiff took punch after punch from fools like Ben Stein, Art Laffer and Mike Norman when put up against him on arguing-head shows on cable.
Here’s a compilation of some of those appearances. Note the amount of scorn heaped on Schiff as he accurately called what was coming. The laughing at Schiff’s on-target message is a sad commentary on the skills of the pundits that populate the mediasphere.
If you go to blogs written by some of these nay-sayers, you’ll be entertained by their responses to readers calling them out on being completely wrong. They get very technical and petty (“keep drinking Schiff’s Koolaid” as Norman tells one reader).
I think I will. It may not be the tastiest, but it’s sure a lot more nutritious than whatever you’re pouring, Mike. My suggestion is make sure you’ve read everything Peter Schiff has written, and lose the bookmarks for the sites written by those who laughed at him.
If you’re a regular reader, you probably have noticed a slowdown in the number of posts since the election of Barack Obama. Though I didn’t intend to slow down or stop posting, the events of November 4, 2008 have caused me to realize that the future of this website is uncertain. To be frank, I’m not sure about the direction (if any) I should take with it.
The American People have spoken, and what they said was “we choose the message of change Obama and his $600 Million in marketing has sold us.” Think about that. $600 MILLION dollars were raised and most of it spent to acquire the White House. These foolish, foolish people have elected a man no one knows that much about. It’s at times, very frightening.
But it’s done.
I’m not writing right now, because the future is getting so terribly dangerous for Americans, who are mostly asleep. But an abrupt wakeup is coming. It will probably begin not long after the first of the year, after the worst retail holiday season ever, as in the cold, harsh light of the winter of a new year, companies begin their fiscal years gutted from layoffs. In many, many companies across the country, only essential employees will remain. Layoff news stories that will begin in early January will be shocking, and mind-numbing as they roll over us like a tsunami. Chicago Mayor Richard Daly calls it “frightening.”
“We never experienced anything like this except people who came from the Depression,” Mayor Daley said. “When you have that many layoffs early – and they’re telling me this is only the beginning of their layoffs – that is very frightening.”
I believe some of the darker predictions of Kunstler, Panzer and Orlov will come to pass in 2009. I do not believe there is much we can do to stop it. For ourselves and our families, we can only prepare.
I’m also spending some time thinking about whether, as a family, we stay or we go. I’ve always rolled my eyes at those people who say “if so and so is elected, I’m leaving the country…” but this is different. It’s not so much Obama that I’m worried about (though I’m not at all comfortable with such an unknown quantity with his questionable background leading our nation), but the mentality of the people who elected him, whether its a culture of people who feel it’s time for payback of one type or another for one perceived injustice or another, or a culture of tv-fed, clueless liberal magical thinking sleepers who believe in this vague message of “change,” and may or may not soon wake up to realize they’ve brought about a change much different than the one they intended.
In short, my family may decide that it’s time to expatriate, and return to the land of my wife’s parents and my grandparents in the UK. My name will probably tip you off to exactly where that is. We’re currently evaluating the real estate situation in both Glenfinnan on the mainland and Portree on the Isle of Skye, as we consider where it would be best to continue raising our family. It’s kind of heartbreaking to be seriously researching this, rather than just fancifully discussing it as we have in the past, because we’re both proud and loyal Americans. But, day by day, I can feel the America I knew growing up changing into something very different, both structurally, politically and philosophically. It’s changing into something that increasingly, I feel I don’t understand, someplace that’s not really “home.”
Madness – US Confidence Plunges to a Record Low. Consumers aren’t confident about the future. What, they are surprised that real estate prices can’t rise forever? They’re surprised that interest rates on their adjustable-rate mortgage went up? Where have they been? What were they thinking? Madness of the crowd convinced them that there is no history worth reading.
S&P noted one bright spot as the acceleration in decline was only moderate in August from July.
Amazing.
Regrets – I regret that I bought the home in which I currently reside, purchased before things got ridiculous, instead of one way over what I could afford, because it looks like people who signed up for liar’s loansmay well get bailed out and be allowed to stay in the homes they couldn’t afford. If that happens, how will you feel about paying part of that mortgage payment? That’s what you’ll be doing.
In truth, if you’ve been reading this blog, and the websites and books recommended here, you know this whole thing started years ago, lug-nuts beginning to loosen and slowly rotate without any change being noted by the vast majority of Americans. But, it’s hard to ignore the problem now.
The credit crisis has flared and is now building again in intensity. The stock market, when it opens today (in about an hour from this writing) will almost certainly crash, possibly big.
This week has seen a LOT of building bad news. Unemployment projections are looking bad. The snowball of advertising cancellations for November and December, where advertisers cancel already placed advertising orders with radio and television stations and newspapers. Massive layoff talk has been out in the open this week. Despite the fact that oil prices are tumbling, and with them, the price of gas at the pump, economic activity is quickly winding down.
Also out in the open in the news this week, has been talk of state and local tax shortfalls. When there’s lower economic activity, tax revenues fall, and so the amount of money states and cities have to spend on services falls pretty fast. This causes more layoffs, and since in many areas, states and cities are high headcount employers, the problem spirals and can crash pretty quickly.
I must admit, I’ve been mystified by the reaction, or more accurately the lack of reaction by Americans with regard to our imploding economy. But I get it now, thanks to Dmitri Orlov’s excellent Reinventing Collapse: The Soviet Example and American Prospects. Orlov, an American with Russian roots, was able to watch the collapse of the Soviet Union while visiting a number of times during that collapse.
At the height of the intensity of the bailout drama a couple weeks ago, I visited a nice, mid to upscale mall where I occasionally shop (I needed the Apple Store, my only consumerist passion). I was amazed that even though our economy was on the verge of meltdown with anyone who knew anything about what was going on tense and wondering how the next couple days were going to play out, the everyday consumers flowing around me in the mall seemed completely unaware that anything unusual was going on. I realize now that they weren’t completely unaware of dramatic things going on, they were simply convinced that it wouldn’t affect them. That’s a distinction that was lost on me that day, as the well-practiced credit-card presentation moves were displayed even as the Secretary of the Treasury Henry Paulson got down on one knee to beg Nancy Pelosi to pass the $750 Billion bailout bill.
I was comfortable spending a little money that day, because I have protected myself from short-term disruptions in the everyday workings of our economy. Having cash on-hand, safely stored along with enough food, water and household goods to easily weather a couple months disruption is something I recommend to anyone who asks my advice about what could possibly happen. But looking around, I realized that few, if any, of my fellow shoppers had protected themselves in that way.
Reading Orlov’s new book yesterday, I realized that we Americans are asleep about what could happen to us because we don’t believe anything catastrophic could happen to us. And that’s not a completely unreasonable assumption, since nothing bad has happened to us in almost 80 years. Plus, it’s been almost 150 years since war has been seen on our shores, as wars are something that Americans have to travel a long way to participate in. It’s been that way since the Civil War ended in 1865. Europe lives with that collective memory still relatively fresh. Even if Europeans haven’t lived through it first-hand, it’s a part of their history that’s closer to the surface.
We in America are living in one of the best-insulated pockets of comfort the world has ever seen, and that will make the troubles that are almost certainly coming much harder to deal with. The shock Americans will feel when the ATMs don’t work will be devastating. When the grocery shelves are cleared by those with a little cash on-hand, the panic will set in. Most people don’t plan for disruption because they don’t believe it is possible. Waking up to the realization that their assumptions in that regard aren’t true will be a difficult experience.
The alarm has most certainly gone off. The government is frantically doing what it can to keep hitting the snooze button, but when it’s morning, you can only do that for so long before waking can no longer be delayed.
The question is no longer “if?” But rather “when?” and “how bad?”
Answers: 2009, and very bad.
We’ve got lots of data about what happens when economies slide into recession, but fortunately, little experience with what it’s like to enter a depression. My view is, we’re about to collect some data and add to our experience level.
Despite our lack of first-hand experience with depressions, one thing is clear – the beginning of an economic event like this can be like a snowball rolling down a hill, picking up energy and mass as it goes. That snowball is bearing down on us right now. Believe it.
Here are some important cues:
The volatility of the market. Been watching the DOW lately?
Shipping slowdowns – The less stuff coming into “Consumerland” (the U.S.), the less stuff that will be sold, with all sorts of negative results like layoffs, lower sales tax collections (resulting in state and city budgetary shortfalls, resulting in layoffs, and on and on. Stories here, here and here. In short, the Port of Long Beach is showing a 15.8% decline in inbound containers September to September, and a 10.8% slowing so far in 2008.
The amazing lack of visible results of the $750 Billion bailout Bernanke and Paulson engineered. The problem sucked all that money up in a hurry, didn’t it? Now, there’s talk of another bill.
Unprecedented demand for Gold, despite the horrible performance of the paper version of the metal, as well as the mining stocks. Try to buy gold coins or bullion. You can’t. Yet the price of the metal is languishing
So, it’s more important than ever to protect yourself and your family. I’m writing a FREE report about how to start the process of doing just that. Click HERE to get it.
First of all, it disgusts me that our culture (yes, even the early morning “Black Friday shopping at Wal-Mart” culture is our culture) has fallen into consumerism so deeply that we become animals for a sale on plastic imported-from-China crap. It’s disgusting. There was a crush of people who were so out of individual control that they killed another person to gain first access to what they wanted. If they were hungry people, it would be a tragedy, but somewhat understandable. But they weren’t hungry. In fact based on my limited experience shopping at Wal-Mart, I would assume they were very well, and probably over-fed. This was a riot. Not a food riot, but a plastic, disposable, consumer-good riot.
If you’re a regular reader, you probably have noticed a slowdown in the number of posts since the election of Barack Obama. Though I didn’t intend to slow down or stop posting, the events of November 4, 2008 have caused me to realize that the future of this website is uncertain. To be frank, I’m not sure about the direction (if any) I should take with it.
Madness – 
In truth, if you’ve been reading this blog, and the websites and books recommended here, you know this whole thing started years ago, lug-nuts beginning to loosen and slowly rotate without any change being noted by the vast majority of Americans. But, it’s hard to ignore the problem now.
I must admit, I’ve been mystified by the reaction, or more accurately the lack of reaction by Americans with regard to our imploding economy. But I get it now, thanks to Dmitri Orlov’s excellent 
. Orlov, an American with Russian roots, was able to watch the collapse of the Soviet Union while visiting a number of times during that collapse.
The question is no longer “if?” But rather “when?” and “how bad?”