Why do you think we are not going to have food and water? As I understand it, in the Great Depression, the market dropped 90%, but the stores still had food and water. Many people couldn’t afford it (thus the breadlines), but the stores never ran out.
So you basically think the dollar is going to lose all value and everyone will basically quit/get fired from their jobs? That is about the only way I can see the stores running out of food and water. Even if my income got cut 80%, I would still stay in the same job unless I could find another, better paying one.
How do you explain the strength in the dollar? Why hasn’t the dollar collapsed already? Surely everyone and their brother can see that the U.S. is going massively into debt and they should be sellers of the dollar. Why isn’t this happening now? How come gold isn’t at $2000 right now? How come gold isn’t at $5000?
It’s obvious you were right about the market dropping, but it’s a long way from there to when the basic necessities of life are hard to obtain.
I personally think we’re going to have a deflationary spiral, the dollar is going to hold it’s value, and, so long as I have a job, I will still be able to buy basic necessities.
Maybe you can help bridge the gap between where we are now and the implosion you are expecting. How do we get there from here?
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Well, given the plethora of posts that Allan, Arraya, Aecetia and I have made over the past 18 months, I’m really surprised that you’re asking these questions.
First: when have I ever said that food and water would completely disappear from the face of the earth? I find that some of the ostrich-types on this board seem to take a statement — such as, “It would be a good idea to get major medical procedures taken care of while the insurance infrastructure is still intact “– and run with it and spin a response such as, “What do you mean? They’re aren’t going to be any more doctors or dentists after the meltdown?” Seriously. The gaps in logic boggle the mind.
Will everyone lose their job by the time we hit bottom? Dude, if I thought that were going to happen, and we would soon be living in a world thrown back into the Iron Age, do you REALLY think I would spend my few precious remaining years sitting behind a desk pushing paper? Come on, now.
But it doesn’t take everyone losing their jobs for the country or the planet to have a severe food crisis. I’m not making this up, Breeze. Just Google “2009” and “famine” and see what you find. Even your favorite bookmarked site “Daily Kos” has figured out what’s coming:
The planet is obviously not going to suddenly run out of food and water. But if we get to a point where even 25-30% of Americans lose their jobs, and consumer and capital spending respond accordingly, you’re looking at Dow 2,500. And that isn’t going to be bullish for the dollar or our economy, now is it? If global investors see the stalwart United States — which was supposed to be able to weather this storm better than ANY other country — succumb to that kind of scenario, then I can guarantee you the dollar will begin to collapse, and fairly quickly.
And it also means of just-in-time delivery system will simply fail, because a bankrupt nation can hardly afford to import goods — especially oil — that will be necessary to keep the delivery system humming. As I think has been noted on this board several times – and even in another thread currently running – grocery stores rarely have more than a three (3) day inventory of food. Interrupt that inventory for more than three (3) days — which is highly likely if we have a systemic collapse — and simple math tells you that we’re going to have problems.
The entire System requires many different parts to all function in harmony. Disrupt the harmony, and you’ve got chaos. Will this mean that you can’t get your hands on a bag of rice in the event of a collapse? Of course not. But you’ll be fighting with other hungry and impatient folks at Ralphs who want the same thing, and the rice is going to be a LOT more expensive. Do you like crowds, Breezy?
And the dollar “rally” we’re seeing now does not reflect confidence in a nation that is throwing trillions of dollars of unpayable debt onto its back; it simply reflects a complete and total fear of equities and other currencies that are — for the time being — seen as weaker. Think about it: if the market is dropping like crazy, the first instinct is to sell — and as the market shows, there’s been a helluva lot of selling lately. So you sell, and then what? You get cash in return, and it goes into your bank account. Or you put it into t T-bill. And you sit on it.
And that’s why the USD is “rallying” now. But that “rally” cannot sustain itself, Breeze. Especially as Obama continues to load more debt onto an already bankrupt currency.
And if you don’t know about the gold manipulation by the PPT, then check out GATA (http://www.gata.org/) and get an education. If the price of gold were subject to the free market, it would be much higher – closer to $1,500/oz, at least. But the price we see flicker across our screens every day on CNBC simply reflects the Comex futures price. Little, if any, physical gold is actually changing hands during these transactions, so the Comex market really is all about trading promises to buy and sell gold that is rarely, in fact, delivered, and it’s highly leveraged, to boot. This will continue until investors wake up to the fact that the dollar holds no more value than the printer it’s printed on. And then the race to actually get their hands on physical — and ALL real, non-paper assets — will begin.
The dollar will not collapse until that race begins.
I’m not a psychic, Breeze, so I can’t begin to tell you when that process will start unfolding. I suggest you monitor default swaps on the USD to get a better sense of the trend.
Rather than take the word of anyone on this board, I invite you to start educating yourself from other sources and finding out how very near we are to the brink. What you may find may scare you, but I assure you falling off the brink without preparation will be infinitely more frightening.
William Buckler has an EXCELLENT bi-weekly macroeconomic newsletter (“The Privateer”) that has been in publication for nearly 25 years now. it is by subscription only, but I would be more than happy to send the last few issues to you. GEAB (http://www.leap2020.eu/Everything-you-wanted-to-know-about-GEAB-_r28.html) is also an excellent resource (again, by subscription – education is not always free) that has accurately predicted the contours of this crisis.
Wherever you look, though, I think you’ll find it fairly clear to most outside this country where the U.S. is headed. Unfortunately, being prone to behave as ostriches, most Americans have talked themselves into believing the worst cannot possibly happen, and they are foolishly acting accordingly.
Now, that said: I am intrigued by your prediction of a deflationary spiral. And since I just won a bet with a friend today (last July, when the Dow was at 12,500, I bet him that it would be below 7,000 by 2010), I am encouraged to make another: I’ll wager you that by summer 2010 this country will be in the grips of an inflationary – not deflationary – spiral. And just to be fair, let’s say that the determination as to whether or not we are in such a spiral will be made based on what is detected and documented in the mainstream news – because if these chumps are able to pick up on it, then you can be quite sure that it will be as plain to all of us as the nose on your face. Are you in?
