The View From 1776

The Chickens Have Come Home To Roost

Ill effects of relentless inflationary government spending are becoming more painfully clear every day.

Posted by .(JavaScript must be enabled to view this email address) on 09/21 at 02:17 PM
  1. I couldn't get the link to work but, the "Chickens are coming home to roost."

    That doesn't mean some eminent crash of the market or collapse of the dollar. Central banks all over the world are working to prevent a collapse. While some are only doing because they don't want the vast reserves of U.S. dollars they hold to fall in value too fast, others are actually trying to help the U.S. avoid a catastrophe.

    What most analysts I feel have a realistic view say, however, is that eventually, those efforts will still fail due to the changes taking place in the world. As Asia rises in power due to a rising consumer base, the U.S. will become less and less meaningful as necessary to keep economies growing in those emerging markets. Already some are saying a recession here will only slow growth and not cause a recession there.

    Our policies have been based on socialism's centralizing of power, redistribution of wealth and costly policies that increase prices of U.S. good, and which all have a long term negative effect once other nations can compete with the U.S. as has now happened.

    93% of our currency reserves are in the hands of Japan, China, India, Russia, Taiwan and Korea and Saudi Arabia is another large holder of our reserves. It will only take one nation panic selling to cause the rest to do the same. That is one reason why it is a crap shoot right now to say what will or won't happen.

    Also, other nations are talking about cutting rates too (some aren't) and if they cut, it minimizes the damage to the dollar these rate cuts have done. But, any unexpected event, war, oil interruptions, further credit crisis problems, panic selling of the dollar, worse than expected economic reports, etc. could all see everything fall apart.

    Don't count on "doom and gloom" happening but, you better be prepared for it if it does happen. That is why many "experts" are saying get out of debt as much as possible, have some money set aside, invest a little in gold, foreign assets, foreign bonds, have skills that will be in demand even during a recession or depression, etc. Then if the "doom" doesn't come, you will be that much better prepared to enjoy a "boom."

    Most also believe the Fed and government can avoid a really bad time now. They are more inclined to believe it will be after the "boomers" stop paying into tax revenues and start drawing from them (mostly payroll and higher bracket income taxes) or if we have another war.

    But, even if the "doom" isn't here yet, we should notice that the chickens are at least heading home from several directions.
    Posted by JanPBurr  on  09/21  at  04:10 PM
  2. Got the link to work by going to the "home page" first and that link worked. May be a problem on my end.

    However, all the earmarks of some very serious problems are present. That doesn't mean the government can't delay most of them for a while nor, is there any guarantee that their tactics for that delay will work.
    Posted by JanPBurr  on  09/21  at  04:14 PM
  3. Seemingly great minds run in the same channel.
    Tom and I have blogged on exactly the same thing at approximately the same time. I blogged about the the price of gold and oil as a value mirror of the dollar and the evolution of the petrodollar. What seems to suddenly come into focus is the flight to security and that means away from the dollar. Gold and oil are commodities that exhibit the fall of the dollar as valued by the underlying commodity.
    As I reflected further I thought about why people buy and sell in this arena: greed and/or fear. Buy because you think the purchase carries more value. Sell because you fear loss of value.
    Both apply to the dollar currently. People are selling dollars and buying other currencies in an attempt to preserve value.
    Jan, I'd appreciate your insight here.
    Posted by AmendmentX  on  09/21  at  10:14 PM
  4. Again, any analysis should include the fact that socialism is not based on Reality.

    Socialism is based purely on 'numbers,' without any accurate attention to the unique nature and diversity of the individual creature. Such inaccuracy is obliged Alpha-Omega to produce distortion and unpredictable dire effects.

    Too many 'economists' detach the process from the creature - and assume wisdom follows. Not.

    Pay attention...
    Posted by Jim Baxter  on  09/23  at  09:38 AM
  5. Absolutely correct Jim. In another comment on this forum, I posted that "Black Swan" by Taleb is a great book on how the unexpected destroys even capitalist economists and politicians best laid policies that are designed to make life easy.

    Socialism is even worse under it. The unexpected is compounded by centralization of power, wealth redistribution and other factors that make a nation weak because the citizens come to depend on government instead of themselves, their family, and friends for "survival." The weak links lead to a weak chain and the nation, being the chain, is easily compromised under load.

    Interesting how so many of the rising nations, people coming out of poverty, growing consumers of the world are "ex-socialist" nations and people who have turned to capitalism in some form or another to end their misery. Yet, millions in this nation are still calling for more socialism as if it isn't a tried and failed system of government not once, but many times around the world.
    Posted by JanPBurr  on  09/23  at  10:09 AM
  6. Absolute;y correct, Jan.

    The pragmatic collectivist socialists never learn from their Monday Morning Quarterback position on Tuesday or Wednesday or Thursday or Friday or Saturday or Sunday or October or November or December or 1945 or...

    Institutionalized buffoonery is always worse than idividual wilful sin or human error. The larger the instituion the farther from personal individual control - and productivity. IQ Test: "Wanna go global?"

    semper fidelis
    vincit veritas
    Posted by Jim Baxter  on  09/24  at  09:36 AM
  7. Jan and Jim-
    As I was reading over your comments, I was also reflecting on a friend of mine who is a dyed in the wool socialist. Intelligent and well read, I thought why does he, and all other leftists, keep going down that same road of failure after failure after failure over decades? As Bernard Goldberg stated in his book that lefties never look in the rear view mirror to all the destruction left in their wake. But, it still puzzles me. When I engage a lefty I know that I have real world economics, facts, truth, history, the constitution, the Bible all on my side. THat being said, I often refer to a quote from Jonathon Swift as to why lefties are unmoved with reason, logic and all the ammunition I can bring to bear:"You can not reason a man out of a position that he didn't reason himself into in the first place."
    As my brother said "You can not be well informed and intellectually honest and be a lefty."
    And I'm still baffled.
    Maybe Michael savage is correct: being a lefty is a mental disease.
    Posted by AmendmentX  on  09/24  at  10:29 AM
  8. I am a "socialist" in many ways. But, fight tooth and nail against socialism. The basis for socialism is good intentions but human nature is the downfall.

    I want to "help the needy." I would love for all people to "help the needy." I want to give to the poor. I want to free the oppressed. I became a police officer to help people more than "enforce the law." But, I had to enforce the law and arrest the criminals in order to help the victims. I also talked to the criminals and tried to "reason" with them, and when young enough found they often listened and changed their lives.

    However, to "demand" society follow my wishes would have been disaster. Who I chose to help may or not have been a wise choice. I might have helped people who wouldn't help themselves and instead would depend on me for the rest of their lives (especially a family member I might love). To ask you to help people who don't deserve your money, time and energy, is wrong. If I want to sacrifice my time, money and energy on even worthless people, should be my choice. It is when I force my "socialism," my wealth redistribution policies, on others, my socialism goes astray. I am saying I know more than you do about who to help, how to help, when to help, where to help.

    Also, I may think I am helping when instead, I am creating "dependence," and not freedom for those I think I am benefiting. Socialism is best left to the individual, not society. Yes, we can, at the local and even state level, have "like minded" people develop social programs and did, even before we were a nation, (education, defense, community sharing of food during a famine, etc.) But, keep it local and at the state so "bad programs" don't drag the whole nation down and remember that human nature destroys more good intentions than any thing else.

    People who want something for nothing exist at all income levels. From billionaires to poorest people on earth, we have to fight against that urge to get something for nothing. I am often reminded of a person in poverty I used to hire when I had an RV park and needed part time help. He showed me a cell phone that he was given for $35 for a 2 or 3 year contract with 50 free minutes a month. His comment along with the showing of the cell phone was revealing. "And all I have to do to keep it is make sure I don't make too much money." And, he made sure he didn't.

    Here was a guy who actually enjoyed hard physical work that limited his income so he could continue to get rent and energy subsidies, free phone, free healthcare, free food stamps, etc. He would even work for nothing or next to nothing in some cases when it was something he enjoyed doing. He loved helping people. He was also a good artist.

    He was also a drain on society.

    There are millions like him that make the people who really need help and would use it to advance themselves and society, never reach their full potential because the programs keep people down more than lift them up through "dependence."

    I love socialists that love and want to help people. I just hate socialism because it destroys incentive and steals freedoms of the successful to make their own choices about what to do with their money or who to help with that money. I hate socialism because it ignores the "evil" in men to want "something for nothing" and relies on an "inherent good," in the masses, that doesn't exist. It is that belief in "inherent good," of the masses, that is the false basis for their "logic."
    Posted by JanPBurr  on  09/24  at  11:22 AM
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