Guest Post by Doug Casey via International Man
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 2 and 3 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.
Editor’s Note: Right now, the US is the most polarized it has been since the Civil War.
If you’re wondering what comes next, then you’re not alone.
The political, economic, and social implications of the 2020 vote will impact all of us.
EXCLUSIVE VIDEO: The Day After—How to Prepare for What’s Coming After the 2020 Election
That’s exactly why bestselling author Doug Casey and his team just released this urgent new video about how to prepare for what comes next. Click here to watch it now.
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“3. A period of time when the business cycle climaxes.”
Climaxes?
It’s going to sound more like an old man with constipation.
I wish some locals gonna break in his ranch in Uruguay during the collapse .Hope that closet gay has enough ammo to defend his wifie.
These doomsdayers all living in South America make me sick. Makes one wonder about their sanity and intelligence. Seriously. They actually think, they, the wealthy Americans living there, are well liked. And when shtf they think the locals will be peaceful and nice and ask for shit., will work for shit, and won’t just kill them and take their shit. Anyone that follows these well known doomsday oligarchs are fools themselves. Mississippi is 1000 times better than south america. At least you can have your Constitutional rights and be able to defend them on your own soil for good and moral reasons with many other patriots.
Worst case is American borders gets smaller with a Bolshevik break up. And what is left is actually representative of a republic and not the fake shit we have today. The blue states will become failed communist states and then we will have to go to war with them to kick out the chinaman that the blue-gilled governors aligned themselves.
Not to worry. This will end bloody. Just not how the treasonous FBI, CIA, democrats and deepstate thought it would. America will be divided, literally. To include secession. Then due to failed socialism, what a fuckin surprise, because they will align with communist. Then what is left of America will have to take back the soil to keep Commies away. It also may include detaching from nato and forming specific allies. Canada and Mexico may be the shocker as to allies. Canadians will revolt against their faggot pedo soyboy in charge. Mexico will align with us because otherwise they will have complete anarchy of drug lords with budgets of small nations and it will be one cesspool of death otherwise. They have no choice if they want to live and not become the drug lords bitches. The drug lords would love nothing more than to carve up mexico and then allow peace between them as they hook the populace on drugs and become the law and order since they caused the chaos. Sound familiar. Yep. The democrat M.O.
I have learned in life, rarely do things happen when expected or how expected. The deepstate has no fucking clue you cannot get worms back i to this can. I have said it before: these CIA asshats have never dealt with a freedom loving heavily armed nation. They have only dealt with radical pockets of mostly poor starving people that fake radicalization to eat. Sure some get brainwashed but mostly they are just wanting to eat and pop a few shots off. And their numbers are a joke. The entire army of the entire fucking Taliban is less than 10,000. And mostly made up of starving poor kids being brainwashed. They wanted to avoid death by starvation. They really want to avoid death by bullet. So take this and then you have less than maybe 1,000 real radical Taliban.
Compare that with 30 million registered gunowners. That nearly 10% of our entire populace. Most of these are skilled. May be fat ugly and out of shape but they can place a bullet between your bucked ass teeth dumbass. They don’t have to be a fucking athelete for that now do they. Ohm and yes they are all radicalized and brainwashed……with freedom. So yes Mostly they are willing to die for their cause and their families. Thats the worms stupid ass. And you won’t get those back into the brainwashed cans where they forget their gender and give up their house to people of color out of reparations or virtue signal. They believe in the castle doctrine instead. Yeah, this is what a fourth turning looks like…..
The Economic Party in the USA has been taking place in “four different rooms” per se, and the Banksters have stopped refilling the punch bowls in three: the High Class and down. I know the High Class have been cut off from the Printing Presses because I don’t see a plethora of aircraft contrails every day in the sky, those once busy FAA Corridors over the fly-over Florida Panhandle between the NE Money Masters and the Gulf resorts. The Middle Class have been hung out like ripe hay in the hot sun; we all see the Mom & Pop businesses are broke or going broke. Both Classes are fleeing the Blue Jungles to escape the peaceful Classes of (non)racist Robbing Hood gangs. The Oligarchs who planned all this and more are fat and happy blaming everything bad on Trump; they have the Vote Counting Machines Oiled for a Landslide, and are expecting a Mega Party for President Elect Uncle Joe Biden (who will not never ever make a concession speech). They probably gonna crash and burn. Some body has got to give. If some Blue states don’t peacefully Secede, they could become red by other means, and the Oligarchs have to flee or decorate trees. Just saying in case you believe the MSM Polls.
I like your term “Robbing Hood gangs.”
I am predicting it will look a lot like Christmas for an entire year: tall green trees with lots of red decorations
is this a newsletter? It doesn’t read like intelligent analysis based on reality.
Yes. He is selling his wares as everyone is today. Must provide email to view his video. Then you get emails to sign up for newsletters. At least it is not perceived as free like msm when you pay for cable and they get paid millions for advertisements. The original cable subscription draw was you paid them and therefore there were no advertisements in the shows. Even HBO is using ads before the movies and with product placements. Everything today revolves around money. Soon, when the power goes out everything will evolve around food, and food production or food theft. We went from food is Life to money is life and soon back to food…..
America had a huge manufacturing base after the depression and WWII, we made shit the rest of the world could not and we had a lot of returning soldiers to make it.
I’ve been a commercial painter since 1977 and business owner since 1987, my town has a small fraction of manufacturing it once had.
Teledyne, CWC, Sealed Power, SD Warren, Canon, ect ect.
Teledyne alone used to employ over 5,000 men working three shifts, today, maybe 150 on the floor, all UAW drones just doing nothing but waiting to retire and collect their pension.
They are all pretty much gone, replaced with service jobs. Multiply this all over America, when the economy collapses and we lose reserve status, what then? Government workers will be fine, the rest….
I worry so much for my children and my grandchildren.
>>>Government workers will be fine….
I know what you mean – relatively stable pay/benefits/retirement.
But ultimately, most government workers will be pretty f…ing far from ‘fine’.
And that is a damn good thing.
this is the end, predicted by many an old book.
100 years of financial engineering has reached it’s natural conclusion, where the owners retire along with their way of doing business (face to face). The next generation thinks they can pull off the same without having to do handshakes and meet in person, these clowns are the ones pushing for the new normal future, an antiseptic world where:
no one gathers in groups greater than 6 people
while socially distanced at 6 feet
and wearing masks with 6 layers,
the old triple 6 will mark a new way to buy an sell.