The Economic Black Hole

This interview is a little more difficult than most of the interviews I share here. We may be headed into a "debt trap" in the economy like the one that has plagued Japan for the last 20 years. A debt trap is "the situation in which the national debt continues to grow faster than national income so that more and more of the government’s budget has to be devoted to interest payments." Steve Keen's proposal of a debt jubilee is one of the more interesting solutions being advocated. 

PsyWar

While it should be obvious that this documentary is a anarchist framing on the subject of propaganda, it is a good presentation of the problems caused by our modern marketing and modern propaganda.  All video does such framing, even documentaries that critique framing!

We are being played by the Media. Who controls the Media? It is not you or me, it is the elite. If you limit your viewing to the mainstream, you will be programed. I think it is the commercials more than the content that is a problem. 

Do you need that latest gadget that the ad is promoting? Constant repetition of ads leads to the desire to own the product as the product seems to have moved from a luxury to a necessity. Of course I am not including the latest iThing in my critique! 

There is much that one could criticize in this video. For example, the idea that success is exploitive seems a hackneyed syndicalist anarchist view. My posting of a video or a link should not lead anyone to conclude that I support everything that a link or embeded video might say. The whole point of me posting these kinds of things is my personal desire to read and watch a wide variety of viewpoints. I hope you will share this desire. 

Cut Now

It is better to cut a lot now. If we don't, we will have to make Draconian cuts later. As is mentioned in this video, the market will force the cuts eventually.

If Greece had gotten its' financial house in order 3 years ago, the cost would have been much less–both for the creditors and the people of Greece.  The United States is in the same situation. 

Voters need to be told the truth. We are headed for a big crisis, but we are blind to it. This is an example of the meme I have been pushing here of “templates.” We all have ways we look at the world. If we are not careful, these ways of looking at the world make us blind to the obvious.

It does not matter that people need their social security checks; it does not matter that we need a national defense that is bigger than the rest of the world combined; it does not matter that Aunt Haddie needs a new hip. We cannot afford it. It is that simple. 

Right now we are borrowing 43% of every dollar the federal government spends. Sooner or later the market will refuse to buy new bonds. At that point either the government cuts everything about 50%, or prints lots of money. This will involve a lot more printing than is realized as not only will the deficit be monetized, but all the deficits of the last 50 years will be monetized as the debt matures gradually over the next few years. No one will ever loan money to the United States–not for a generation. 

It is that serious. 

Get out of debt. Consider downsizing your living arraignments. Drive that car for a few years longer. Get Ready. We have 3 to 7 years. 

Hyperinflation?

There are two viewpoints in the "hard money" school of economics—one predicts inflation, the other predicts depression. I think they are both right, and wrong. I think stagflation is the most likely outcome. But as Yogi Berra said, "The future is hard to predict because it has not happened yet." When the crisis comes in 3 to 7 years, I cannot begin to predict which option the "powers that be" will choose. 

The blog post for today is an interview I saw from a member of the hyperinflation school—John Williams from shadowstats.com. He points out in this clip that while inflation is currently calculated at 2%, if the same method was used today as was used in 1990, the inflation rate would be 5%. If the same method that was used in 1980 was used today, inflation would be 7%. There is an almost constant pressure on the average person as their income is not going up by 7% a year. 

Personally I expect "modest" inflation in the 10 to 20% range while unemployment goes up. I know this is supposed to be impossible based on the Phillips Curve, but I think it will happen. 

Yes there are people who are more pessimistic than me! Here is one:

Amazing Parrot!