Thursday, October 7, 2010

Doug Casey: There's No Way Out

I really dislike sounding inflammatory. Saying that things are going to go terribly wrong runs a risk of being classed with those who think the world will end in December 2012 because of something Nostradamus or the Bible says, or because that’s what the Mayan calendar predicts.

This is different. In the real world, cause has effect. Nobody has a crystal ball, but a good economist (there are some, though very few, in existence) can definitely pinpoint causes and estimate not only what their immediate and direct effects are likely to be (that’s not hard; a smart kid can usually do that) but the indirect and delayed effects.

In the first half of this year, people were looking at the U.S. economy and seeing that some things were better. Auto sales were up – because of the wasteful Cash for Clunkers program. Home sales were up – because of the $8,000 credit and distressed pricing. Employment was up – partly because of Census hiring, and partly because hundreds of billions have been thrown at the economy. The recovery impresses me as a charade.

Let’s get beyond what the popular media parrots are telling us and attempt to derive some reasonable assumptions about how things really are and where they’re headed.

A Brief Summary of Our Story So Far….

Before we get to where things stand at the moment, let’s briefly look at where we‘ve come from.

That a depression was in the cards has been foreseeable for decades. The distortions cranked into the system in the ‘60s – the era of “guns and butter” spending by the government – resulted in the tumult of the ‘70s. Things could, and one could argue should, have come unglued then. But they didn’t, for a number of reasons that have only become clear in retrospect:

  • Interest rates were allowed to rise to curative levels;
  • The markets were non-manipulated and so, as they became quite depressed, were left to send out real distress signals;
  • The U.S. was still running a trade surplus;
  • The dollar had only come off the gold standard in 1971 and was still relatively sound.
  • More Here..Long Read
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  1. WOW, how can someone (the author) who understands and preaches EXACTLY what the tea party understands and preaches, yet STILL regurgitates the tired old DNC talking point that the Tea party people are brutish god and gun clingers. He may fancy himself a libertarian, but he is an arrogant, elitist one.

    This line shows his true colors r.e. the first American Revolution "But it’s hard to see how it could be anything like the first one, which was led by thoughtful, RICH, free market-oriented farmers and merchants."

  2. Lets try this again...This line shows his true colors r.e. the first American Revolution vs the possible second one... "But it’s hard to see how it could be anything like the first one, which was led by thoughtful, RICH, free market-oriented farmers and merchants."

    In other words, the Founding Fathers were righteous and smart because they were rich.

    What a tool, I almost smell a shill.

  3. i like that: "In the real world, cause has effect"

  4. He is just saying. Get ready we are all f---ed

  5. Casey talks a lot but I think he misses too much. He first blames government spending for our problems. The he talks about the money system--that's the FED, which usually operates independently of government. The Fed is only interested in the banking system and not how the average citizen is affected.

    The bubbles that keep bursting and screwing us are created by the FED and Wall Street for their own profit. The reason we the people ran up so much debt of our own was (1) easy credit and (2) we have been getting poorer over decades and can't keep up a middle-class lifestyle without that easy credit. Now we can't pay the credit cards because the banks are charging us 30% interest. And we can't apy our mortgages because the banks screwed us with adjustable mortgages and other crap.

    Now throw in that Congress has been giving tax breaks to companies that move out of the country and outsource our jobs. We don't have decent-paying jobs anymore--and those job are not coming back. That's why everything is in the toilet.

    Do you see government or Wall Street doing a damn thing to bring back jobs? No, so the only thing Casey's scenario will bring us is a fall of civilization with roving gangs of the unemployed and homeless. Well, maybe not so homeless if they move into all those foreclosed houses and abandoned malls.

  6. lol. Wallstreet is still advertising programs on Fox showing people how to get money... what a scam.

    Scams are only kept active by people who fall for them.

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