The crap is coming through thick and fast

I am once again short of time. Here are a bunch of articles all pointing in the same direction: deflation, the unraveling of state finances leading to paralysis of the political process which, as you know by now, leads to Fascism (totalitarianism, dictatorship, call it what you will) and eventually war. I maintain that by the end of 2009 Western economies will have to contend with unemployment levels that have not been seen in a good many decades. Regardless of what official statistics will say, unemployment in the active population will hover at around 30% across the board. Once you have so many people with nothing to do but kicking the can around and hungry, you have a problem on your hands. Also, government after government will find it increasingly difficult to meet its financial obligations to its citizens and to external creditors. However, bankruptcy is not an option for a Western country (if you think otherwise, you have another thing coming) even if technically they already are. This tells me that there is a conflict brewing sometime, somewhere… I say by 2015 latest and, at this rate, much sooner.

As outlined in previous essays, public services considered non critical will be the first to be curtailed in order to divert resources to services such as pension payments because the absence of the latter more readily indicates a critical problem at state level.

Whatever the cost cutting efforts they are talking about may be, they are sure to include reductions in salaries. Unions have no choice. Even in the US, unions have had to concede that their requests were unsustainable. In the bankrupt Californian county of Vallejo, unions were forced by court ruling to accept lower wages. In the case of GM, UAW workers apparently saw the light and made concessions (though not nearly enough) “voluntarily”. This is deflation at work folks.

Everyone seemed to get all excited yesterday as the US administration claimed that some segment of the home resale market showed an improvement year over year. Yeah, maybe, depending on how these things are counted. Nevertheless, the truth is that real estate prices are on the way down and they have some way to go still until someone finds a way to restart inflation globally. Also, as AZAU said on VOY in response to popular belief that the price of a house can’t fall below the cost of material: “wanna bet?”.

More deflation at work

These are the consequences of deflation and reckless government policies. Expect more of this in coming months and expect an escalation in violence in Western society. When enough members of society are unemployed, bored, hungry and when they are presented with blatant cases of corruption at government level, the only thing that will keep their minds off a revolution will be a war against some made-up villain somewhere far from their shores. The probability of war increases to the square of the degree of deflation

More consequences of deflation.

Despite the fact that popular anger will most often be directed at government, politicians and captains of industry…

… occasionally it will be directed at oneself.

Fascism’s slow march…

State finances on the brink… UK

As I outlined in a post yesterday, Fascism is an inherent precondition for something like this to happen in the time frame the West now requires.

ALLOW ME TO REITERATE HERE that deflation is not, in and of itself, a bad thing. Deflation is quite a desirable outcome and, I dare say, almost the natural state of the world. Deflation is not the bogey man. However, if you are in debt, deflation is devastating. All Western govenrments are in debt up to their necks. If governments aren’t in debt then either the population is or the corporations or both. However, debt is debt whether it is corporate, private or state. It all is the same thing and once inflation reaches its mathematical limit and deflation sets in, debt is destructive.Western countries are in a corner. Someone in power somewhere must have the balls to recognize that once inflation has reached its limits, deficit spending only makes things worse…. unless… unless…

… unless it is premeditated…

… bear with me but I cannot help wonder how the brightest minds in government cannot see what is happening….

Along with the scores of smart and rational analysts, commentators and economists that operate at the periphery of the main stream (because they are shunned by the main stream) there is ample evidence to suggest that Quantitative Easing, monetization of debt, bailouts of banks and moribund companies and more money for banks is counterproductive and dangerous… it is dangerous at any time but particularly so in a deflationary environment… so, what are our “leaders” thinking?


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One Response to “The crap is coming through thick and fast”

  1. Ding, ding, ding… 17% unemployment in Spain « Guido’s temple of the absurd Says:

    […] and you don’t realize what high unemployment in Western industrialized countries means… read up… we will be herded into a world war… probably within the next three years, certainly […]

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