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Thursday, April 14, 2016

Rumblings in the distance


It's said you don't have to be a weatherman to know which way the wind blows. You also don't need a crystal ball to see there's some potentially nasty stuff coming down the pike.

When the President and Vice President both meet with the Federal Reserve, something might be in the air. Even the questionable statistics from the government has been trending downward. While 2% economic growth was predicted, the number has been revised downward to almost nothing. Banks in Europe are in trouble.

It doesn't take much digging to find a multitude of troubling economic indicators.

The economy is not supposed to implode during an election year. Whoever is in charge at the time does everything possible to keep at least the appearance of a robust economy. If your party wins you have a few years to weather the storm before facing another election. If your party loses economic problems can be blamed on the other party.

Even more disturbing to me are the rumors of war. Historically, economic turmoil leads to military conflict. There are plenty to choose from right now. Things are heating up from the Middle East to Africa to parts of Asia. One bad move an any of those trouble areas could turn hot -WWIII hot.

As I see it, at the very least we are looking at some financial bubbles bursting. Look at the the connections between banks and a weakening fossil fuels sector. They could take each other down. That could be extremely disruptive.

Of course, I'm not a big fan of the banks or the fossil fuels industries. They won't be missed -in the long run. In the short run, however, expect to see some turmoil. Radical change always produces winners and loses. Let's do what we can to avoid being on the losing side.

Might be a good time to check out your preps. My lovely wife has been on my case to improve our food growing capability so that's one thing I'm doing to prepare. There are other things I'd like to improve but money and time are issues. Of course, I've been living at my bug out location for years.

With a high chance that things are about to get real, how's your situation?


-Sixbears

6 comments:

  1. I totally agree with your ideas with the economy. It appears that something will happen...Good for some...Bad for others! I think that something has to move us from the direction we are going in right now. Lets hope that it doesn't take us to war. Notice how the Russians have been pushing to see how far they can go? Just yesterday our Navy ships have been buzzed very close by the Russians, granted we were just 30 miles from their shores! We are living in uncertain times, but this has been going on since the beginning of time!

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    1. With so many military forces rattling sabers there's the potential for an accident to set things in motion.

      I've been doing a lot of research lately on WWI and we seem to be following a similar path in a lot of ways.

      We seem to have forgotten how horrific full blown warfare can be. The US is like England in WWI with a small professional army supported by technological superiority. Once the war got rolling those pros were used up and they drafted anyone they could to fill the ranks. The average person did not expect the war to be as large, long or kill and injure so many people.

      That's the sort of horror we should be trying avoid.

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  2. Mass layoffs at companies have been on the upswing recently ... again. CNN just reported that the IMF has just downgraded its global growth forecast, calling it "fragile".

    Growth: It seems that only one of these two things can be true -- either I'm an idiot or the corporate and political leadership of the country is hopelessly corrupt. At this point in our collective evolution, I cannot see growth being good in any sense of the word.

    Continuous enlargement in a finite space is simply impossible. However, the pundits and the media talk about growth like it is not only assumed, but assumed to be good, and when it doesn't happen, the sky is falling. Watching the news is beginning to feel like the Twilight Zone.

    Horizon: I hate labels and the baggage that comes with them, but for brevity, I'll say that I'm liberal in most things, but conservative on immigration and the military. I don't know what's in the wind, but I can see some unsavory countries pushing into a vacuum created by a new passivity on the part of the U.S.

    Looking forward, I cannot see an optimistic outcome post-election. If Trump wins, at best his ignorance and bellicosity will exacerbate already high levels of tension. If Hillary wins, global adventurists like Putin are sure to be emboldened and to continue their conquests. Why? Perceived weakness. She is a Democrat and a woman.

    None of that bodes well.

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    1. Our money system cannot function without growth. Real growth in a finite world has its limits, but fake growth, like that from financial instruments, are infinite. We never run out of zeros to tack on the end.

      It's a dangerous world and I'm concerned that those in charge think of war as wealth destruction that makes room for more growth. Works for a few . . . but not at my pay scale.

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    2. Growth can be defined as numbers of things: people, houses, cell phones, etc. or as the size of electronic bank accounts.

      If the virtual zeros on digital money amounts simply increased quietly on a computer disk somewhere, and no one ever interacted with it, and it never impacted anything, then it would truly be fake.

      The problem with real growth vs. fake growth is that they are connected. While fake growth, such as bank interest, creates itself with few resources, it drives the use of tangible resources in the real world.

      Human population drives real growth and it creates demand. That is simply math. Fake growth in financial accounts creates demand also. It acts like gas thrown on the fire of human population growth. Far from benign.

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    3. (Hit the "go" button too soon ;-)

      My final point was that the demand I just described is demand for finite resources.

      There is a special danger that I don't hear discussed much. There are natural constraints on how much growth can be created by demand from tangible, finite creatures like people or animals (more creatures = more demand; and also the reverse).

      However, if you have a fake growth system (financial system) that can multiply on its own without limits, and so, create truly unlimited demand in the real world, no amount finite resources can ever satisfy it.

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