-- Posted Friday, 18 March 2011 | | Source: GoldSeek.com
Rick’s Picks
Friday, March 18, 2011
“Phenomenally accurate forecasts”
[With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick’s Picks forum how they thought the economy would look five years from now. In the essay below, Tom Waldenfels asserts that it wouldn’t take as much as a “black swan” event to tip an already destabilized economic system into chaos. In the meatime. he finds it baffling that so many people evidently cannot see this disaster coming. RA]
A smoldering ruin.
What’s that you say? Well, Rick asked me to give my outlook for how the world might look in five years from an economic standpoint. That’s easy. A smoldering ruin. I mean that figuratively … I think. The whole world? Maybe, but I’m thinking primarily of the U.S., Europe, and Japan.
Look, the readers of these missives are very smart and well-informed, so I don’t feel the need to catalog all the problems we face. You know what they are. The biggest are the ocean of debt we’re floating on that has gone bad or is going bad; the extreme amounts of leverage still in the system; the mountain of derivative contracts extant that can’t possible be honored when the SHTF (Think AIG); a corrupt and insane government that does precisely the wrong things; and the uberputzen at the Fed, who are hell bent on destroying the clownbuck. The problem underlying all of this? Phony money. They’ve managed to maintain the fiat money scam for decades now, and what a party we’ve had. But when the money goes bad, look out. And it’s starting to go bad in a big way.
My view, for what it’s worth, is that we’re looking at unimaginable systemic disorder once the patches being administered by the Fed, the Feds, FASB, et al. are no longer sufficient to keep us limping forward and a breakdown occurs. I take this as a given. The die has been cast. 2008 was just a warm-up. Will the meltdown look more like Japan on steroids, or Argentina on steroids -- or perhaps both in alternating fashion? That’s the big question in my mind. I dunno, but it’s likely to unfold along one of those primary lines.
When will it happen? Oh, how I wish I knew. Being early is so much like being wrong, and I’m often early, but the Powerz have been delaying the inevitable reckoning for a very long time. Could they keep it up another five years? Yeah, I suppose. Inertia is a powerful force, but I think about the disappearance of the USSR. Took forever to happen. But once the system started to collapse, it was over in the blink of an eye. I fear it’ll be sooner rather than later, but who knows. Experience suggests otherwise. They can drag out the endgame for a long time. (Whatever you think of the Bernanke, he has given us the time to prepare, not to mention huge gains in gold and silver.)
Mass Delusions
What interests me more than what’s going to happen or when or why is how people can be so blind to the threat. How is it possible for the mass of people to delude themselves into thinking the problems aren’t that serious or that the consequences won’t be that severe?
The simple reasons are that they believe the disinformation that spews forth from the MSM, economists, the government, and the Fed, plus they’re engaging in simple garden-variety denial. But I think what’s really at work here are the normalcy bias and the recency bias. Put simply, for most of us, life in the USA. has been good for our entire lifetimes and our recent experience suggests we can dodge whatever bullets come our way. Very few of us have ever seen a collapse or lived through really tough times, so we can’t even really imagine that a major breakdown could occur, much less what shape it might take. Even if it’s unspoken, the usual response to my haruspications, when I share them with others, is something like, “That couldn’t happen here.” You wanna bet?
Time to Prepare
Call me a pessimist if you like, but I think that’s just a silly label used to discredit the analyst who comes to disturbing conclusions. The system that allows us to live the way we do is incredibly complex, and the more complex the system, the more at risk and given to instability it is. In other words, the more complex a system, the more robust it needs to be. The system is not robust. It’s a house of cards. It won’t take much to destabilize it. It’s time to prepare for some wild action.
You know, there’s been a lot of chatter about Black Swans and the potentially devastating effects of events you can’t anticipate. The warning is clear. You can get totally blindsided while thinking you actually knew the risks you were facing. Well folks, we don’t need no stinking black swan to take us down. There are plenty of perfectly, screamingly obvious risks that are poised to manifest themselves very shortly.
If you want an analogy, this is Europe … and it’s 1912.
***
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2011, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 18 March 2011 | Digg This Article
| Source: GoldSeek.com
