Karl- Amazon just sold 3 more of your book. 1 For the local HS guidance office, 1 for the HS personal finance teacher, and one for a girl I know that wants to go to grad school at a prestigeous university because she cant find a job in her field right now. If the book is as great as this ticker at explaining our current situation it should be required reading at every school.

Mortgageguymn- My son paid his way through college (the part I didn't pay for) by roofing houses here in hail central. He put it on his resume and he got much positive feedback and multiple job offers in his field (microbio). Everyone wants to hire someone who is self motivated and works hard.

12Bolt-We paid our last penny in interest in 1999. Now if we could just figure out how to quit paying for what we already own. (Property taxes)

Bagbalm- I suspect many more people pay in full every month than you might think. I know many here on TF do. I know others subsidize my spending because I have a no fee cash back card that is paid in full every month. Has been since 1981 when I got my first card.

Erbo- Targets (just joking)

raftermanfmj- Think scorched earth policy. A local woman was evicted in a divorce a few years back. When posession changed ex hubby found the well cemented in, the house completely destroyed, even the topsoil around the house had to be removed due to some chemical sterilization. I could see other places going just like this if loss was only due to back taxes.

Heh, and there is this little problem that after the populace has financialized their future income and the government decides to raise taxes, the new taxes get in the way of the financialized assets owned by the banks and investors.

As the worldwide depression unfolds in the next few years, incomes are going to get slashed and tax revenue will plummet. Not only will the stock market crater, but a lot of thought to be safe bond money is going to go up in smoke. Trillions in wealth is going to vanish. Trillions.

Trillions of paper claims on wealth will vanish.

But all of the capital and labor will still be there, making stuff. Making just as much stuff as they're making today.

It all just needs to make things people can truly afford, not things they can borrow to buy and hope pay off in the future.

Mrbill,

Not really. When people feel poor they don't spend money. When we finally equalize with Asia via our currency or tariffs, everything is going to be expensive and the exported inflation comes home. There will be a lot less to go around and meeting basic needs will become an issue. I am not sure you understand the fullness of what is coming.

I don't know how much you, Gen, respect Peter Schiff, but he testified before Congress on 9-13-11, touching some of the issues you breach here.

too bad you, Gen, can't let loose with these points before Congress. of course, casting pearls before swine may not be the best use of your time.



here's a related ticker with a Schiff vid hammaering the student load issue.
http://market-ticker.org/akcs-www?post=1....

Excellent, easy to understand Ticker! Forwarding to all those on my list that are interested in these issues. Thanks for all you do.

I can't seem to get the entire post to print. Anyone else having this problem? My printed version starts with the heading "OWS: Want To Turn The Tide?" and has a 2" gap and continues with the paragraph "But note that there is no free lunch."
Any suggestions?

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Not really. When people feel poor they don't spend money. When we finally equalize with Asia via our currency or tariffs, everything is going to be expensive and the exported inflation comes home.

Oh, you're speaking about just the US. When people ARE poor they don't spend money that they don't have. When they FEEL poor they either are poor, or aren't poor and are saving it, nothing wrong with that.

Well, yes, in that case, of course stuff is going to be more expensive, especially imported stuff. Consuming less is going to happen.

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There will be a lot less to go around and meeting basic needs will become an issue.

But I contest this. How will meeting basic needs be an issue? The stuff is all there. We don't import (much) food or houses. We import oil, that might get more expensive too, but there's a lot of places to cut costs before not eating. I just don't see mass starvation in the future.

Allocating those goods might be hard, as a lot of people will be without jobs as the economy transitions to something more sustainable.

Occupy Wall Street is coming here to Minneapolis on Friday. They're marching at the government center, when the Mpls Fed is only a few blocks away. I may show up with a sign saying "Cut Federal Spending 43% NOW!" Of course, if I do, I make make Drudge: "Man beaten to pulp by Free **** Army".

I’m sorry if I offend, but the example of riots here in the Uk and those occurring today in Greece show clearly that there is a lot of dissent out there.
It’s all a bit of a powder keg- reflect on the Arab spring.

But worse than that, the dissent in the middle east is against oppressive regimes, but here in the west it is focussed at the gov. for NOT doing enough- and by that I mean not giving out enough free stuff.

All the financialised markets (health education, housing) Gen talks about, have people clamouring for greater gov. subsidy- not to revolutionise them.

Our primary concern today must be to prevent the gov. from either being destroyed or taking over the economy. It’s the latter that public support seems to make more likely.

In the Uk they already represent more than 50% of GDP.

We have to shrink the gov. back to a size we can support, we have to be more locally self-determined and accountable.

This re-sizing of the gov and decentralising many of its functions, plus increasing the VA of individuals, -must be done in the most tricky of ways- so as not to destabilise the gov, nor the population.
It must be done within the rule of law- it must be done within those principals we can all agree on like NO Theft and No Fraud.

Certainly we need to definancialise, on our terms- but this is going to be a tight-rope walk between two equally destructive precipices.

This needs a clever strategy, and also I suspect a fresh political force.
In your book Gen?

MrBill, I know of an excellent blog that will explain all this. It is called Market Ticker. Here is the link, bookmark it. http://market-ticker.org/akcs-www?blog=M....

Please. Get over yourself.

If anything, Karl is still of the mindset that it's not too late to start making adjustments to the economy that can avoid these outcomes.

Once the distortions get too big, real productive capital gets destroyed, and then you have problems.

It's bad enough we grow too much corn and not enough other food, but the farmland is not yet abandoned and unproductive.

When capital gets destroyed, then we've moved to the mass starvation phase.

Mrbill

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If anything, Karl is still of the mindset that it's not too late to start making adjustments to the economy that can avoid these outcomes.

Bull****, Karl knows we are ****ed either way. If we balance the budget right now he claims we are going to drop GDP somewhere in the neighborhood of 15 to 20%.

A 15 to 20% GDP adjustment produces these outcomes.

I hope to see you on Leno for the book tour, that it catches so much attention they can't ignore it.

You've got solutions; unlike the empty nothings from both major parties.

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Bull****, Karl knows we are ****ed either way. If we balance the budget right now he claims we are going to drop GDP somewhere in the neighborhood of 15 to 20%.

A 15 to 20% GDP adjustment produces these outcomes.

No it doesn't.

We are spending less now as a percentage of income on food and housing than we were in 1950 - by a SUBSTANTIAL margin.

There's no problem with necessities.

Now with everyone having iPhones? Yes, that's a problem.

We can easily afford 3 hots and a cot for everyone.

We are not going to have millions starving.

You find where Karl says we'll have starvation and I'll recant.

Edit: looks like you can recant now.

No Gen it will not be a problem at all, assuming that the resulting unemployed as a result of a 15 to 20% GDP drop are fed. That feeding of the unemployed will be paid for from people like you that HAVE income. Otherwise they are going to be walking around with leverage crowbars procuring their next meal. Will the cost of food have gone down after we add the fact someone is going to be paying for subsistence meals for a great number of people?

Go ahead, keep running the class warfare bull**** and you'll get a surprise.

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That feeding of the unemployed will be paid for from people like you that HAVE income. Otherwise they are going to be walking around with leverage crowbars procuring their next meal.

No they won't. They'll either produce something (even if it's picking up trash on the side of the road) to get their food or not eat. If they try to use that "leverage crowbar" to get it they'll get shot. Then nobody has to feed them any more.

Lawlessness will be met with what's deserved and the bleeding heart bull**** that is so easy when there's lots of "free money" flying around will end.

I have it on pretty good authority that the gangbangers are really ****ty with guns. They all have 'em but they can't shoot worth ****.

I also am quite sure that most TF folks who are not gangbangers will manage many more hits than these *******s should the time come - they scored zero hits out of all these rounds fired.

This is not a class warfare issue. I believe you proposed something like 200 billion for two hots and a cot. I assume the money would come from taxation of those remaining to have jobs. Of course with our modern system of government funding, Congress will just allocate the money and Bernanke will accommodate the spending by entering the market to buy the debt.

Three hots and a cot for up to 25% of the population. There's enough money to do that. You won't get your Medicare or Social Security, but you will get fed and a place to sleep.

This prescription does not collapse the economy to zero. Yes, unemployment will double - for a while. But not for very long. The worst of it will be over in 12-18 months.

The challenge is to do this while there is still margin between the impact on the government and the economy and the point where we get political collapse. Since it is not possible to know in advance exactly how ugly the multiplier will be (the best you can do is guess) the longer we wait the higher the risk is that we go off the edge.

Right now I'm convinced there's sufficient margin. In another 10 years? Nope. In 5? Probably not. The "probably" line is in the 2-3 year time range, which means we better get going with it.

Mtdm, I guess my comment was made in what I think the left think of when these types of drastic measures are discussed - racism, xenophobia, class warfare and elderly dying in the street.

Note - I actually believe this drastic situation calls for such drastic measures such as those outlined in this ticker (amazing post btw..)

But the leftists could be right in their claims unless bankster and politician prosecution is in the offing. Golden parachutes and hedges are ubiquitous among the powers we are talking about. Only force of prosecution will prevent them from walking away from what will happen (either by reform, or by collapse) unscathed.

Sorry for the 'out loud' thoughts in type - but I guess my comment really says that I haven't thought through all of the impacts and twists and turns of these types of proposals - but pain is inevitable with or without reform. I am going to re-read the article now and think for a while.

I suspect they would choose prosecution over the public having a turn with them.

Actually while the poor's share of income in this country has been going down, consumption by the poor has not. All these transfer programs that we have for the poor are working as intended, the poor have food and junk from China as well.

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I have it on pretty good authority that the gangbangers are really ****ty with guns. They all have 'em but they can't shoot worth ****.

I also am quite sure that most TF folks who are not gangbangers will manage many more hits than these *******s should the time come

A lot of folks just don't know or understand country living or they would know Karl is correct. Every kid over 15 in this county has a deer rifle with a scope and they know the land in a way they can travel at night. We are 90 miles north of Atlanta in the mountains. If gangbangers came up here to take food and stuff...it would be like shooting ducks in a barrel. Word would spread pretty quick...you go up there you never come back.