The Smart Money

Often, I feel as John the Baptist did, doomed to wander the wilderness preaching the coming of a new world. So when I run across someone who sees things the way I do, I feel heartened and can take comfort that I'm not the only one who sees signs around him that point to terrible tragedy.

Understand, this does not mean I'm cashing out all my investments and squirreling money away in a mattress in some forgotten backwater of civilization....well, I mean, I have, but not all my investments...but it does mean that I take the danger warnings seriously enough to monitor them closely. And I look around me at the blithe way so many people make plans for their future, not realizing the present is in fact an illusion.

Comes a fund manager who, along with a few others, is starting to sit up and take notice of the gloom surrounding us and isn't ready to assume it's a fog ready to lift:

There are those who fret that current troubles in real estate will lead to an economic slowdown, maybe a recession. Then there's Peter Schiff. "Our standard of living is going to decline," the Connecticut stockbroker confidently declares. "There's no way around it, and it has just started."

Schiff owns Euro Pacific Capital, a smallish firm that specializes in moving clients' money into nondollar assets like foreign stocks and bonds. Over the past couple of years, he has become a regular, hectoring presence on cable-TV business shows--on CNBC they call him "Dr. Doom." Now he has a book out, ominously titled Crash Proof: How to Profit from the Coming Economic Collapse.

I know it will be a best-seller, at least around the Actor212 household.

Now, the temptation is to say that, on the whole, the American economy has never had a collapse worse than the Great Depression and that we recovered fairly quickly from that, and boomed ahead.

True. But American history is not world history. And world history has a long line of examples of hubris punished.

And what goes up, must, eventually, come down. That's a fact of life. It only depends on your time frame.

"History didn't begin in the postwar period," he says. "History didn't begin 20 years ago." Living memory includes the Great Depression, begun in 1929 and stopped only by global war; stocks didn't fully recover until 1954. The scary scenarios painted by Panzner and his ilk are not outside the realm of historical experience. What's more, they're all grounded in the incontrovertible truth that much of our economic growth of the past 25 years--and almost all the growth of the past five--has been funded by debt.

Sound familiar? It should.

I realize in some eyes I'm wasting valuable blogging real estate talking about economic problems and hell, even my eyes glaze over when I get into some of the wonkier aspects of this, but let me tell you something: Iraq? Equal rights for everyone? Fair elections? Bush criminality? Even global warming? (well...maybe global warming...)

These are nothing compared to the magnitude of this impending crisis, and it's coming. Maybe it's tomorrow. Maybe next year. Maybe next generation. But at some point in your lifetime, you will be dealing with this devastation.

It may take a natural disaster for it to fester. It may take a war, or a terror attack, or it may simply slide down the economic mountain like an avalanche triggered by the loss of support in one small area.

But it will happen.

As of the end of 2005, the U.S. owed $2.7 trillion more to the rest of the world than the rest of the world owed to the U.S. (the 2006 numbers won't be out until summer; they'll be even worse). That's a record, and a dramatic increase since 1999, when the number was $766 billion. Consumer debt has exploded as well: in 2006, U.S. households owed $12.8 trillion in mortgage and consumer loans--135% of disposable income. At first glance, the government picture actually looks comparatively good--federal debt, expressed as a share of the economy, is down from a peak of 49.4% in 1993 to 37% today--but that's only if you don't count future commitments to Social Security and Medicare recipients worth tens of trillions of dollars.

It also doesn't include the monies budgeted to be spent in Iraq and Afghanistan, which remain off the Federal budget, and increase nearly geometrically each year. Another sleight of hand brought to you courtesy of the economic royalists of the Republican party and the Bush administration.

Debt is merely an advance against your anticipated future earnings. Right now, there is not enough projected revenue to ever repay these debts, consumer and governmental. Not now, not in the foreseeable future (usually expressed as the next ten years), and in my view, not in the next fifty to one hundred years.

Which is why I'm convinced we are headed towards an economic meltdown not seen since the fall of the Roman Empire.

Bush
economic royalists
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Paging Jenna, NotJenna, And Neo-Con Spawn! Attention Death Cult Descendants!

In a move sure to brighten the hearts of feudalists everywhere...

LONDON (Reuters) - Prince Harry, who is third in line to the British throne, is being deployed to Iraq, the Ministry of Defence (MOD) said on Thursday.

Harry could become the first member of the royal family to face combat since his uncle, Prince Andrew, flew helicopters in the 1982 Falklands War. Harry's great-grandfather, King George VI, saw action in World War One.

[....]He has trained to become troop commander and will be leading 12 men in four Scimitar armoured reconnaissance vehicles.

A codicil here: he will be posted near Basra which is one of the safest cities in Iraq, or so rumour has it.

You know, feudalism had some advantages over our current system, which is feudalist without the responsibilities: the vast number of us, even if we own our own businesses, take a knee to the lord of the manor, who may sign our paychecks, or be our biggest customer.

Corporate feudalism, I like to call it, but it also extends to politics.

In a true feudalist (more correctly in this example, manorialist) society, those who stood to gain the most from a war were at the front lines. They may not have been infantry or regular cavalry, but they stood there and saw the battle and helped direct the troops and yes, rushed into the fray. Why? Because they were forced to under contract to the monarch or local noble.

The vassals and serfs, of course, were the foot soldiers and archers that did the bulk of the fighting and dying, to be sure, but the thing is, if you knew the other side's king was on the field, he immediately became the target with the biggest bull's eye. Vassals in particular were eager to claim amongst coup the lords and royals of the other side, since their lord would grant them rewards of lands and serfs.

This arrangement is fractal, you'll notice: barons, dukes and counts were vassals to the king, the free peasants were vassals to the dukes and barons and counts, and the serfs, quasi-vassals to the peasants. If a king went to war, say in a Crusade, he dragged his knights with him as well as the various nobles as he could reasonably spare from overseeing his lands. Similarly, if a noble had to go join a war that he was contractually committed to (say an invasion of a neighboring shire), he dragged his knights and vassals with him.

What structure does that remind you of? Anyone? A multinational corporation, perhaps? I don't think that's a coincidence, and certainly explains recent corporate developments that ensure protection of the centralized authority of the "kings" of a company (and by extension, the "kings" of the United States, our elected Presidents, who are really more duke than king, but that's a different post. We'll talk about plutarchies some other time).

The difference is, rather than go and get hands dirty and doublets bloody, our current vassals and nobles and royals would prefer to get manicures while those who are least among us fight and die for their hege-money (Oooooh, someone go post that in Wikitionary!). Or as Michael Moore put in in Fahrenheit 9/11:

Not a single member of Congress wanted to sacrifice their child for the war in Iraq. And who could blame them? Who would want to give up their child? Would you? Would [Bush]? I've always been amazed that the very people forced to live in the worst parts of town, go to the worst schools, and who have it the hardest are always the first to step up, to defend us. They serve so that we don't have to. They offer to give up their lives so that we can be free. It is remarkably their gift to us. And all they ask for in return is that we never send them into harm's way unless it is absolutely necessary. Will they ever trust us again?

And, they're under no contractual obligation to do so. After all, this is a "free" society. Until you sign your life away for the $20,000 bonus and $50,000 in college tuition assistance.

Or, again from F9/11, as Orwell puts it in 1984:

In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia but to keep the very structure of society intact.

Heven forfend that society be defined to include all of its citizens.

Draft Jenna and NotJenna now!

snarkasm, snarcasm, snarky

Bush
Iraq
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Barbara Bush
Prince Harry
hegemoney