Guest Post by Doug Casey
Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist – it will just change ownership.
What is a depression?
We’re now at the tail end of a very long, but in many ways a very weak and artificial, economic expansion. At the same time, we’ve had one of the strongest securities bull markets in history. Both are the result of trillions of new dollars created over the last decade. Right now, very few people are willing to consider the possibility of tough times – let alone The Greater Depression.
But, perverse though it may seem, this is the very best time to think about it. The U.S. economy is a house of cards, built on quicksand, with a tsunami on the way. I urge everyone to read up on the topic. For now, I’ll only briefly touch on the nature of depressions. There are at least three good definitions of the term:
- A period of time when most people’s standard of living drops significantly.
- A period of time when distortions and misallocations of capital are liquidated.
- A period of time when the business cycle climaxes.
Using the first definition, any natural disaster can cause a depression. So can living above your means for long enough. But the worst kind of depression has not just economic effects, but economic causes. That’s where definitions two and three come in.
What can cause distortions in the way the market operates, causing people to do things they’d otherwise consider unreasonable or uneconomic? Only government action, i.e., coercion. This takes the form of regulation, taxes, and currency inflation.
Always under noble pretexts, government is constantly directly and indirectly inducing people to buy and sell things they otherwise wouldn’t, to do things they’d prefer not to, and to invest in things that make no sense.
These misallocations of capital subtly reduce a society’s general standard of living, but the serious trouble happens when such misallocations build up to an unsustainable degree and reality forces them into liquidation. The result is bankrupted companies, defaulted debt, and unemployed workers.
The business cycle is caused mainly by currency inflation, which is accomplished today by the monetization of government debt through the banking system; essentially, when the government runs a deficit, the Federal Reserve buys its debt, and credits the government’s account at a commercial bank with dollars. Using the printing press to create new money is largely passé in today’s electronic world.
Either way, inflation sends false signals to businessmen (especially those who get the money early on, as it filters through the economy), making them overestimate demand for their products. That causes them to hire more workers and make capital investments – often with borrowed money. This is called “stimulating the economy.”
Inflating the currency can actually drive down interest rates for a while, because the price of money (interest) is lowered by the increased supply of money. This causes people to save less and borrow more, just as Americans have been doing for years. A lot of that newly created money goes into the stock market, driving it higher.
It all looks pretty good, until retail prices start rising as a delayed consequence of the increased money supply, and interest rates skyrocket to reflect the depreciation of the currency.
That’s when businesses start failing. Stocks fall. Bond prices collapse. Large numbers of workers lose employment.
Rather than let the market adjust itself, government typically starts the process all over again with a new and larger “stimulus package.” The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression.
This is why I predict the Greater Depression will be… well… greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.
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Starting sooner than later.
He doesn’t seem to understand this is being done on purposeThe ruling class want a greater depression.90 % of them are luciferians who hope to use an economic collapse as a way to bring in their New World Order
They are traitors.Once you understand this it makes sense.
BB.
Exactly. People will be clamoring for a dictator to fix things for them. The 1% now control all the real money and all the deeds to anything of value so they can now pop the bubble. Pension funds are holding all the junk.
About your infection. Can you get an IV of vitamin C there? If not, can you get to a herbal store to get Liposomal Vitamin C. It goes directly to the blood instead of through the digestive system. I buy Solaray brand 400 MG in a bottle of 100 for 20 bucks. Haven’t had a head or chest cold in 1 1/2 years that iv’e been taking it. It even cleared up my toenail fungus I had for 20 years.
Good advice from Flea BB,
Damn, Mark. That’s informative. Thanks (again) for your higher degree of awareness commentary.
lgr, Flea, BB,
Yea, it’s a definite strong prevention and treatment tactic…I have a big plastic tub filled up with multiple different PPM’s of Colloidal Silver, three types of C, liquid & regular D, Echinacea, licorice root & licorice extract, odorless garlic, zinc & zinc lozenges (always have a lozenges when out in public it will stop a virus in your throat) Lugol’s iodine, plenty of quality multi vitamins.
I’m also into essential oils, got into them doing prepper research. Have three diffusers, they are a world onto themselves. Plus, I sleep better with a blend in the room.
A humidifier will be important for the home as any virus needs dry air to survive, plus like you are doing Flea it’s a vehicle to get Colloidal Silver into your lungs.
Mark.
Humidifier will even put a slight layer on surfaces just waiting for germs to alight. BB better get that thing fixed while he can still find someone to do it.
Flea,
I’ll take every edge I can get.
Humidifiers Decrease Levels of Flu Virus in Homes
https://www.mdmag.com/medical-news/humidifiers-decrease-levels-of-flu-virus-in-homes
From LewRockwell.com — why Asians
are far more susceptible to Covid-19 Coronavirus and the usefulness of
Vitamin C:
Diver
Very interesting article.
Mark. Israeli news live just did a vitamin c video 2 days ago. My colloidial silver supply finally arrived and went out yesterday and got 200 more capsules of Liposomal C. I put the silver in my inline humidifire on my oxy concentrator so i get it in the nostrils, sinuses and lungs and eventually blood.
Fleabaggs on phone. My internet is down.
The biking biologist has research information about skin pigmention and Vitamin D production. Is weird but makes sense
darker skin is harder to produce Vitamin D
ANON.
Correct. Us light skinned redheads produce most of our own vitamin d.
Red hair itself being a genetic defect.
Green eyes, freckles, dimples, unibrows, God speaks in mysterious ways.
.22
It’s not a defect. It’s a recessive gene which requires matching pairs like my Lady Killer, cobalt blue eyes.
White skin is 400 times more efficient at
converting sunlight (UVB) into vitamin D
than darker (black or brown) skin.
The disparity between rich and poor is already worse than it was during the great depression. What is going to happen now is going to exasperate that. During the great depression, attitudes changed, and people did not want immigrants from other states, much less from other countries. They became more protective of their local resources and jobs on a local, state, and national level. Their attitudes towards charity changed, and towards those who did not want to work for their own survival. They learned to be more practical and some would say hard hearted.
And the wheels on this Fourth Turning bus keep going round and round, round and round, round and round….Hope you brought your popcorn and water!! you’re gonna need it!!
The Fourth Turning Crisis is here brought to you courtesy of the Chicoms and their Wuhan Flu.
Pre 1965 Quota: 105 Chinese per yer (applies to Chinese only)
Circa 1880
But there will still be women’s soccer, right?
My wife told me she was going to drop bowling and take up sex. That way she would two balls to play with and would not have to chance her shoes. Sounds good to me.
I read that to my wife and said she would be playing with gutter balls if that was her.
Going through life always expecting the best case scenario is a sure sign you are an idiot. And yet that is exactly how most people live, in debt up to their ears, and expecting the economy to always grow and their job to always be there. I learned a long time ago that you never want to put yourself in a position where you would have to make scared money decisions. I live a lifestyle well below my income and to make sure I always had the cash to get through an extended bad time. A lot of people will learn the wisdom of this way of thinking the hard way over the next few years…..
The Russians and Saudis have declared war on the shale sham industry and the Petro Sheckle this weekend so if the virus doesn’t panic enough people that should do it.
Does anyone think “and interest rates skyrocket”?
No.
Doug gets a discreet checks in mail every month for writing cognitive dissonance drivel.
Too much bitching an moaning about Earthly events.
Not enough prayer.
Happy Sunday.