Interesting how some experts see the world economy:
The global economy seems trapped in a “death spiral” that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned.
Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”
If everyone had a functional amygdala, this would probably be it, because everyone would pull their money out of the banks to protect themselves, and the system would immediately collapse. But everyone doesn’t have functional amygdalae, so even those whose amygdala work fine, can be forgiven for leaving their money in the system and trying to ride the waves of irrational optimism (and lack of fear) a little longer. Plus, given the lack of amygdalae, people will still lend to state actors, allowing governments to float enough debt to forestall the collapse beyond what one would normally expect.
What will eventually happen is the inevitability of the collapse will rise, bringing amygdala function along with it. At some point a critical mass of amygdala function and collapse inevitability will be reached, and that will trigger much more protectionist economic behavior. That will signal the beginning of the collapse, and a resurgence in conservative ideals which will make the current surge look inconsequential.
As Pelosi said, “Embrace the suck.”
[…] By Anonymous Conservative […]
AC, I’ve a quibble with your post here.
Unless one has a very small nest egg, it is nearly impossible to “pull out your money.” Yes, it is legal to turn even large balances into cash, but then what? Do you really intend to walk out of a bank with $20,000 or $200,000 or $2,000,000 in hundred dollar bills? And do exactly WHAT with them? Several to a lot of bank employees know what you did. They HAVE to. They have boyfriends and husbands and girlfriends and wives, who have friends, who post stuff on FB. In other words, you have ZERO OpSec and just made yourself the Number One Target for anyone even the least bit criminally inclined.
Loose cash is a crime magnet. Your loved ones could be kidnapped and held for ransom for no other reason than you pulled a bunch of cash and loose lips sank your ship! Even if you don’t take the cash home, potential crooks don’t know that. Even the most paranoid person can’t sleep with one eye open and a loaded AR15 on his lap for weeks or months or even years later.
I submit that there is no way to safely transfer wealth out of the banking system that doesn’t end up looking like frying pan and fire. Greenback cash may be one way to avoid the pitfalls of bank bail-ins and bank failures, but one must assess all of its pluses and minuses in order to reach an optimal action plan. And if you plan to walk out with a substantial amount, you’d better also go Full Paranoid with regard to OpSec, including body armor, multiple cars and heavy armament.
It is a good point. And I should add I am not big on cash, in part because I think Kyle Bass is setting himself up for a dissolution of the federal government. so at least one big player thinks it possible. I can’t say that is unlikely if the money suddenly disappears, and the states try to exit en masse to unburden themselves from the US national debt. I have no idea what would happen to the value of US federal currency in that situation, but I assume it would plummet. I would have cash on hand, but I wouldn’t go all in with it.
But you can buy stuff with that cash. Ammo, reloading supplies, precious metals, a milling machine and lathe, spare mags, guns, hydroponic gear, etc. are all good and will help with survival. If you look online, there are places you can have valuables like Precious Metals delivered to that you can then pick it up and cart it off into the sunset, to protect your home address, which is the only way I’d take precious metals in large quantities. Run a few counter-surveillance detection routes on your way home, drive through isolated areas with no traffic that any follower would have to follow you through, and make sure you aren’t followed, and that should be it.
I don’t really have a good answer as to what is the best exit strategy, but my gut tells me if you have a nest egg stored anywhere that the machine can lay hands on it, it will be taken as the collapse approaches. The primary goal of the machine in the early days will be to pacify the animals who have nothing, and it will do it by any means necessary. I expect the first step will be bank haircuts, followed by taking 401k’s and giving back promised social security benefits which will be taken back later. I could see a tax on those with stuff saved, just because.
The one thing I know is, they will bleed everything from everyone, in a desperate bid to stave off the unthinkable, before they cut any welfare or government expenditures.
This offers opportunity for the survivor, who understands how the game is played when there are no rules, because all of those who think there are rules and they can appeal to law, or fairness, or justice, will be left way worse off.
They can always print more money to avoid an insurrection, no?
If they do the value of the money plummets, what people have gradually becomes worthless, and if they lose confidence in the currency you lose the advantages of currency. Printing is a short term fix with bigger long term problems. And that ignores how difficult it is to print our complex, forgery-proof currency. Unless they create more printing resources, right now they physically couldn’t print enough for that to be an option.
The citizen’s rush to buy gold is a failed vote of confidence in the political class: the desire of the political class to go “cashless” is their failed vote of confidence in their citizens. The loss of confidence — on both sides — already happening, AC, and frankly, I think the political class will have no choice but to print and print and print.
I just finished reading Noonan’s article in the WSJ in which she describes how a vote for Sanders or Trump is a vote against the political class. Even sheltered Noonan is sensing the people’s failed vote of confidence.
And that lack of confidence, mercifully, will bring the whole mess down, triggering the “collapse,” as you rightly put it.
I had no idea that it was difficult to print money. Makes sense. Have you read that a few European countries are considering not printing large bills? Bitcoin confuses me, but it seems to represent a way of bypassing state-sponsored currencies.
In the meantime, I sympathize with the above poster who writes of the difficulty of hiding/storing larger sums of cash. What’s safe? Treasuries? Brokerage accounts? Buying art/gold/real estate? One can only store so much food, and buy so much ammo …
I wish there was a way for like-minded sorts to link.
“They” don’t print money now. Most of the money supply is electronic, and most wealth resides in bonds, not stocks or land or commodities. Bond deflation is what’s coming, and even if there was an attempt to literally print banknotes to offset bond destruction, it is literally impossible to do so as long as $100 is the largest denomination. $19 trillion if actually printed in hundreds would weigh more than 5 (five!) cruise ships displace.
Wealth was created out of mass psychology (a credit bubble mania) and it will return to nothingness when this epic social mania finally ends. The problem is that the process will be incalculably disruptive and coincide with out-grouping and political warfare not seen since 1861.
When you see proposals to raise the largest banknote denomination surface, then you’ll know the real fireworks are about to begin. Banknote inflation in a crisis leads to Zimbabwe-style hyperinflation, the very definition of S-HTF.
The traditional method of triggering the collapse is to come up with reasons for everybody to kill each other.
Well, they’re working that one, too.
Planning your life around an event that may occur tomorrow or may occur ten years from now is not wise.
So we are left with current politics.
I wanted to add more but your comments software leaves something to be desired.
You buy insurance for your car right? What’s your life worth? You can buy food for 4 months or so for four people for $400. It will be basic. Rice and beans but it will keep you alive. From there you can store more tasty fair. You can get an Ak and a thousand rounds of ammo for roughly $1000. Not much more than the price of insurance on your house and cars for a year. About 28 dollars a week over a year. Let’s say you put the purchases on a credit card at 20% interest it’s still only $34 a week. After a year keep saving at the same rate any soon you will have a very tidy amount of food.
The point is that you’re not planning your whole life around this. A few weapons, water and food can get you through the worst by just keeping your head down while everyone else is out fighting each other for food. Narrows things considerably in your odds as you don’t have to fight anyone. Myself if there was a complete collapse I would last a while but in the end the people left would probably form gangs which I would lose to. Not without casualties on their part.
Ammo. You can only use so much ammo unless you trade it. If you fire off 1000 rounds at someone else the odds that you won’t be in turn hit by them become very increasingly rare.
Agree, and to be clear I wasn’t viewing ammo as anything so much as a store of value which would appreciate in the collapse. If we have ammo shortages now, I expect that will only get worse once SHTF, with the only difference being how badly people will want ammo.
We have no ammo shortages. We have people lining their basements with ammo, which (if my expectation for an historic deflationary collapse is fulfilled) will someday come out of the woodwork at swap-meets and flea markets to barter or sell at pennies on the dollar.
Mad Max Beyond Thunderdome (Mel Tappan/Survival Blog stuff) is fiction. People desire order and band together to obtain it. The only questions of pertinence are: How large are the polities and who runs them? Large nation-states like the USA are dinosaurs, slated for extinction. Smaller polities, however, must and will emerge. The neighborhood watch may add armaments, then merge with similar nearby organizations and so on.
In-grouping will be key. Conflict is too costly to occur continuously; in no time everyone involved would starve or die in the crossfire. Systems of conflict resolution will evolve, and quickly. There will be very little “every man for himself,” and everyone will eventually have to account for his actions during any periods of chaos.
We are not going back to Ozzie & Harriet of the 1950’s. History only moves forward. But it is historically blind to imagine that order, not chaos, dominates the flow of time. Humans are simply too dependent upon one another, and too preconditioned to obedience, herd behavior and self-preservation to sustain WROL for long, even if it is TEOTWAWKI. Things may look very different in coming decades, but in other ways we should expect the show to go on.
Off topic (but not much): the Shitlord Hub is a new blog that aggregates RSS feeds of over 100 Alt Right sites and blogs, allowing you to check their latest updates in a fast, time-saving way. Anonymous Conservative is there as well: http://theshitlordhub.blogspot.co.uk/