second update: i would suggest that you watch and listen this film by porter stansberry, on the looming financial crisis in america, http://www.youtube.com/watch?v=nI-BIVWlc7A . and, if you got to google, here, http://www.google.com/search?aq=0&oq=stansberryresearch.com+%2B&sourceid=chrome&ie=UTF-8&q=stansberryresearch.com+video , or google "stansberryresearch.com" + videos, you will be introduced to a whole slew of stansberry videos. he also has a blog site at, http://www.stansberryresearch.com/contact.asp . will all of his predictions come true? i don't know, but they appear to me to be based on sound analysis and data, and he makes a compelling case for his conclusions. you might give it a whirl. end second update.
update: i don't care much for newsmax. i don't dislike the web-site, but it always takes them forever to get to the point.
but, i recommend this presentation found at newsmax highly, http://w3.newsmax.com/a/money_mischief/video2.cfm?s=al&promo_code=C1B5-1 , for you considered attention. and, in this context, the program recomends "money mishchief" by milton friedman, as a most cautionary tale. end update.
in this very interesting post, http://www.lewrockwell.com/orig11/scott-pd3.1.1.html , i came across one of those little squares w/ an advertisement in it, by a financial planner who was describing how best to survive the coming economic collapse. [update: the video i watched has been located, and see "second update" hereinabove. jjjay.]
i went back to the above link, only to find the financial planner's article supplanted by other adverts. i will keep going back until i find the original article, a film, actually, that inspired the following two emails that i have sent out to certain friends.
this may be considered "rough draft" observations for an article i am mulling over (hey, i was once 77 days here between posts, as i thought something through, which became one of my better articles) regarding how the left wants to shape the perception of "scarcity of resource" in order to provide pretext & premise for the regulation of "scarce" natural resources.
be that as it may, what shaped the following two emails, is my conviction that government's attempts to regulate business failure leads to catestrophic long term results, because it does not allow for ameloriating short term business failure.
in short, i don't think businesses or enterprise should be "rescued" from the natural result of failed business, financial and economic decision making. for instance, i was against the bail out of general motors, not because i am in favor of people loosing jobs and business's going bust, but because i feel that the results of that course of action are better in the long run than perpetuating bad business judgment and perpetuating top heavy managements and management styles that led to failure in the first place. if things are allowed to take their natural course, by way of example, and a business fails, somebody else will come along and refurbish and revamp plants and production lines, and have them working again in relatively short order: it has happened recently in the firearms trade with the "bankruptcy" of winchester in new england, only to see the winchester product line reappearing a few years later under new management with new plants in north carolina. had winchester been rescued, the only result, and an inevitable result, would have been a deeper financial morass a few years down the line, with outmoded equipment and onerous pension obligations to non-productive union labor.
but, preserving the letters for later incorporation into my theme of "the politics of scarcity," here are the two letters, exactly as written.--
letter no. 1.
friends:
i have been saying this for years. not as well. but, "we have a broke dick" is pretty succinct, ain't it.
only one thing has saved us. one thing, alone.
and, that is, of all the major currencies/economies in the world, every economy in the western world is as bad as or worse off than the united states, in terms of debt. and, all are enormously worse off in terms of debt to national gross product. for example, we are about $5-6 trillion in national debt (plus another $trillion or two in personal debt), but we have a gross domestic product of about $16 trillion. the brits are about $4 trillion versus $4 trillion, for example. the euro union is way out of whack, and greece and spain our functioning financially only because the germans loaned them money to keep them afloat.
they simply have undertaken social programs, socialism in the form of national health care, welfare, etc., beyond any rational expectation of paying for them.
the u.s. currency would have been supplanted as the international method of exchange long ago, if the western world had had the means to do so. you think the euro's wouldn't have gloried in that. the simple fact is, it did not happen, because it could not happen, because their currency & monetary systems are in the shit worse than ours.
simple fact.
which leaves china.
but, there is a problem with china.
one, it has its own debt problems, and it is overbuilding and over producing to levels almost unimaginable. [duncan's u-tube.: jjjay.]
and, two. it's economy is so entirely tied to ours, and the other consuming [should have written nations: jjjay] problems, that if it steps in to supplant our dollar as the international medium of exchange, it will cause our collapse, it will cause the collapse of the euro union, and it won't do japan any damn good, either. japan? their ratio of indebtedness to national economic product is about twice or three times worse than ours.
in sum, everything "functions," because everyone is broke, and no one is inclined to give up the horrendous spending that caused the debt in the first place. and, in this dismal picture, we are still better off than most, and perhaps all.
sooner or later, the whole thing has to collapse.
if money means anything.
and, historically, it does. the reality of it is called hyper inflation, such as beset the weimar republic of germany just before ww ii. the german mark simply deflated/inflated in value (the same thing, really, as it goes up in units of what it takes to buy something, it goes down in value.) people paid rent in wheel barrows full of cash. hyper inflation also struck brazil and argentina in the last part of the 20th century, and it led to economic collapse. it was so bad, that not only could these countries not afford even to print new currency, but they could not afford the ink to print new "values" over the old bills, ... , the ink cost more to purchase than the values of the new bills they were printing. it is happening all over africa, now. and, in detroit, michigan, usa, local banks and businesses transact business with the use of a privately printed script.
when abe lincoln's family moved from kentucky to illinois in the early 1800's, his father accepted 3 or 4 kegs of whiskey as payment for the family farm. whiskey was the medium of exchange on the frontier, there being literally no money by which to transact business, e.g., purchase and exchange. [historical note: when the u.s. was formed under the consitution ratified in 1789, there was no national banking system. no national bank. and, damned few banks, period, some of which issued their own notes, and some of which didn't. trade was carried on, to a great extent, by the use of promissory notes issued by prominent and wealthy individuals, who were trusted to pay their obligations, e.g., the holder of the note when the terms of payment matured. look at a dollar bill. right now. it really isn't such a different system, only we have a lot more bills now. a bill, by the way, is much the same as a note, no matter who issues it. it is the matter of trustworthiness that is central: will the obligation be paid per its terms/promise upon tender at maturity. if so, it is money. if not, it is toilet paper, worth less than what is to be smeared on it.: jjjay.]
this is where we are headed. right back to where we started.
john jay
p.s. yes, this means the republican "effort" on the recent "budget reform" amounted more or less to one pissing right down his own leg. in short, we continue head long into disaster. any way you look at it.
letter no. 2.
friends:
i will be brief. i have to travel to walla walla and get some money from the bank. the local beanery where i grab store bought breakfast occasionally will not accept bank checks in payment, because their depositing bank charges them a transaction fee upon deposit!!! even if they are good!!!
bear with me. there is a point to this. i own about 17 or 18 pendleton shirts, as milton freewater, my home, is 28 miles or so from the pendleton woolen mills.
huh?
the point is, there used to be a mechanism to cope with this debt business. and, it had a name, and the name was "failure." in the biological world, the name of failure is "death." and, that was its name in the business world, as well. oh, it was gussied up and fancified, but, when you got right down to it, in a business sense, if you were improvident or made bad decisions, you died.
hanify knows what a "ghost tree" is, most of you don't. i will explain. in the forests of western washington, a tree dies. but, it doesn't. new trees grow from it. so, you will see this giant supine in death, but, all along it, new trees sprout, and utilize its nutrients to live.
huh?
in 2005 [should have written, 1905, or thereabouts: jjjay.] in pendleton, the pendleton woolen mills was the top of a food chain of the sheep industry centered in pendleton, oregon. in 2006, [1906, or thereabouts] the boom went bust, and the woolen mills and the brokering of sheep/wool went bust before it.
the mill shut down. they closed the doors, and the owners walked away, busted. and, the worker went home, and things "got really skinny" in the area.
in salem, oregon an immigrant named bishop was a frugal bastard, and his mill survived the sheep bust.
the good towns folk of pendleton went to bishop and asked him, please come to pendleton and reopen the mill.
so, he did.
what he did, was to buy the pendleton woolen mill name and its assets and its looms for pennies on the dollar (and probably its debts, for pennies on the dollar as well, .... , most likely going to the creditors of the business and saying, friends, 10-cents on the dollar is better than nothing at all, which is what you will get if you do not accept my terms.)
he opened the mills. and, they have been open ever since.
bishop came in, bought the defunct business, and then thrived on the nutrients of the death, failure, collapse of his predecessors.
and, you can be sure that he did it by paying his bills, meeting his payrolls, and making a superior product, which is superior to this day.
now, this happened with some regularity. and, when it was economy wide, it was called a "business cycle," or the "boom & bust" cycle.
what is was, however, at its most basic, was a coping with failure mechanism.
it was expected that things fail.
things die. people & animals die. and, the surviving consume the carcases, and thrive, until the natural cycles of improvidence, mistake, miscalculation and venality catch up with them, too.
i have absolute, irrefutable proof of this. no, i am not falling back up history. that would be too easy, and some would disagree.
i have a far simpler proof. a "visual" and "intellectual" aid, if you will, that lends sudden & memorable insight, absolute proof of what i am saying.
here goes.--
name 25 business that you know of, that lasted more than 50 years. in other words, that kept the doors open longer than the founder plus two generations of family succession, or 50 years of sale, acquisition, resale and reacquisition.
do it for the nation. do it for state business. do it for local business.
try it. you'll see the point. things come, and they go.
and, it was coped with.
the source of our current problems is that we have tried to remove the consequences of improvidence, mistake, miscalculation and venality removed from our lives.
it cannot be done. no matter the edifices and layers of protectionism and the buyouts and such that we have institutionalized to prevent the financial discords associated with business collapse.
the piper must be paid. and, if he/it isn't paid periodically and in small doses that can be consumed, then he is paid in the form of the sort of cataclysm that we face. it is inevitable.
there is a base issue here.
is money real? if it is, and historically it seems to hold true, then balance sheets, ledgers, debits and receivables, have their dictates. which cannot be avoided.
so far, we don't live forever. we die. we are buried. but, not before the scavengers have their day. and, we serve as "ghost trees" to those who follow.
it is a process as old as time. it is not to be fucked with, not without very serious consequences. as we shall find out.
john jay
