DISCO AND DOUBLE DIGIT INFLATION
Ah, the 70’s. Great rock and roll music, crappy cars, best selling books on three hundred recipes for meals with hamburger. Disco died, a Central Banker actually stabilized the economy and the North Seas and Alaskan oil came online to give us our cheap oil again. All was groovy again. Except for the fact that we exported all of our factories, gave up all our gains in alternate energy, turned to deficit spending to run the government and turned from leading economy to military Empire to keep our energy flowing. We bought some time after killing the dollar. Today, we have God awful music. Our cars are just as crappy and much more expensive. We are killing the dollar to save the derivatives market which will eventually kill our military. And make our former bankers such as China reluctant to loan us much more money.
Where do we turn for salvation this time? No new large oil finds are waiting to save us. Business is addicted to debt to function. For a time cheap credit will allow them to limp along but they do not rest on solid fundamentals. Inflation will not be tamed, as it is the only way our government can pay the bills. That hollow pit in the bottom of your gut telling you very bad things are going to happen economically is there for a reason. When leading financial institutions lose $10 billion at a wack something is seriously wrong. When GM writes off over $40 billion at one time the Motor City is closer to losing its last few major companies. When the Chinese give up on further purchases of US debt, when the dollar index falls ten percent, when gold doubles in a few years, when our major cereal food almost triples in less than a year, who but talking TV bubbleheads can proclaim happy times ahead?
The Artic ice hits its feedback loop and we have ice free seas for the first time in recorded history. Al Gore traveling by jet to get us to buy florescent bulbs will not stop global warming which will alter our farmland. Ten percent of our population is comprised of illegals and other than a temporary stay of execution for corporations getting cheaper labor the long term effects are overcrowding in the arid West with water tables and snow packs falling rapidly. We have more people in prisons than anyone else, and yet as soon as the average TV viewer comprehends he will lose his SUV and McMansion crime will erupt on an unimaginable scale.
Our economy is in such serious trouble that the only logical outcome prior to total collapse ( the rest of the world will follow as the oil runs out ) is going to be a totalitarian society in a last gasp effort to keep social order as real scarcity is felt for the first time. Any paper asset you own will become worthless. Your 401(k) will die even faster than Social Security. We will have hyperinflation to pay for all of the government security make work jobs. The only construction will be government sponsored. You will be unable to declare bankruptcy and must pay off a car you can’t afford to gas up. Produce will be for the well to do. Meat will be rationed as most is sold off to China for hard currency. Soybeans will be the only affordable protein and the genetically modified unfermented bean will cause health problems, only medical care will be socialized and only more-harm-than-good drugs will be available. We should see gun control to rival the UK. In fact, we might even begin to hope for Peak Oil to move faster to blunt the effectiveness of large government as our last solution to survive the labor camps a bit longer.
In the mean time, keep watching the Dow Jones like it means a damn thing. The Seventies will really start to look good.
Watch for this Sunday, another guest article
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