THE FUTURE OF THE WEST
When I was in the United States Marine Corps, I served as an Aerologist, or Weather Technician.
I simply loved the job. All day and all night we looked at the skies and described the types of clouds, their estimated heights, their conformations, the various types of precipitation, the visibility secondary to haze or other artifacts and the general conditions that fighter pilots would need to be aware of in order to fly safely.
In addition, we drew huge maps of conditions around the world. From barometric pressure readings, to winds and their forces, to temperatures and precipitates and from all these parameters we could define high and low pressure activity and the frontal movements of these pressure masses.
These duties gave me an insight into how large forces devolve into lesser forces and produce unique conditions under the specific terrain of any part of the Earth.
We might say that if we know the conditions of large air masses we can understand the conditions that will prevail in a specific location on the globe.
For example, if part of the planet is covered by an immense hot high pressure area with little moisture in the air, we can assume that there will be very little precipitation and that, perhaps, drought conditions will prevail. If drought does prevail and the area in question is used for the production of grain then we may anticipate that grain prices will rise or that the farmers in the area will be under duress.
To summarize this manner of thinking, we might say, that one must know the large conditions in order to understand and predict the local conditions.
The Global Economy is no different, fundamentally, than the Global Weather.
As an extreme hypothesis, to make the above statement clear, we can say that if ALL of the earth’s atmosphere had no water in it, there would be no precipitation anywhere on the planet.
Now, think of the Global Economy.
Assuming that money were totally fungible (able to be exchanged into any currency) and if we saw masses of money on certain countries and no money on other countries would the masses of money move from the high pressure areas to the low pressure areas?
If we saw masses of air with high pressures next to masses of air with low pressures, would the masses of air with high pressure move to the masses with low pressures?
We know from all of our science that mass tends to equilibrate. Since we have a force called “Gravity” near the center of the earth, the air particles, move towards this center. (This is Newtonian Physics, not Einsteinium Physics.) (The numerical differences in such a small area are too small to be measured.) Therefore, the air molecules in the high pressure system would force themselves into the low pressure system, and we can observe this by simply measuring the wind speed and direction.
Why, doesn’t “money” do the same thing?
LEVELS OF INTELLIGENCE
Atoms and molecules are rather simple to understand. Most of their activity is determined by the number of electrons circulating around the nucleus.
Since the Universe has a tendency towards stability, when a part is unstable, there is a movement to stabilize the unstable area.
On the outer circles of electrons, we have areas that are unstable on many elements. These “rings” or “electron Paths” are always “searching” for other electrons that will bring about stability.
With this evidence, we can predict that the entire universe will eventually terminate as a stable mass of sub-atomic particles. Some scientists speculate that all the parts will coalesce and this new fountain of energy will create a new “Big Bang” another different Universe.
Why there should be a continuity of “new” Universes cannot be explained, and the entire speculation is hardly worth the effort of more than a minute or two of thought. This type of rumination of worthless ideas used to make the Early Greek Philosophers happy, as a form of mental gymnastics. It is fun, but it is totally worthless.
EQUALITY
We must realize that nothing in the Universe is identical to anything else in the Universe. In order for any two objects or events to be identical, they must have identical causes. And each cause must have an identical cause, with the result that we have a Universe that is totally unchanging.
That premise applies to atoms, sub-atomic particles, and each and every living creature.
I bring up the fact that everything is unique because when we discuss humans, we have a tendency to classify them as equal; either genetically, as species, or legally as legal objects of the law.
No one or no one thing is identical to any other one or any other thing in the universe. Everything and everyone is unique. Everyone’s behavior alone and to others is different.
If one man has fifty dollars he will spend it differently than another man with fifty dollars.
A judge faced with one criminal will mete out a sentence differently than faced with another criminal with a similar crime. The reason: neither the crime nor the criminal are identical.
This is important to understand, if we wish to predict anything in the universe.
No rain shower is the same and no economic depression is the same. The great depression of the 1930′s is not the same as the great depression of 2008. Both will last different lengths of time and both will have different severity and the people who benefit or are harmed will also be different.
BASIC FORCES
When we predict s meteorological phenomenon such as a the arrival of a “Cold Front” we know how high is the pressure mass of air behind the Cold Front and how cold the air mass is behind the front.
With this information, it is relatively easy to say that the temperature will drop 20 degrees Fahrenheit and that the winds will be 40 mph when the front arrives.
When an economic depression arrives, we must look for similar numbers that quantify the characteristics of the impending depression. We must know the number of people involved, the population base.
If we are talking about three people who have lost their jobs there is a different implication than a situation where 30 million people have lost their jobs. If we are talking about people who are very self sufficient and educated, it is much different than if we are talking about people who have no skills, no education and perhaps no ability to communicate in the official language.
If the country is homogeneous in terms of culture and commercial skills, it is much different than a country that is very heterogeneous in terms of culture and commercial skills.
DEBT
There are essentially two types of Debt: Public Debt and Private Debt.
Public Debt in incurred by the various levels of government: local, state and federal.
Private Debt is incurred by individuals or by companies.
But, we must remember that all debt, Public and Private, is repaid by the same people.
The Public Debt is repaid with money taken from the public’s earnings in the form of taxes. The private debt is repaid with money taken from the earnings of the same public.
Hence, Debt is Debt.
We must add the public debt to the private debt to determine what the public must repay.
The fact that the U.S. Government has promised the U.S. Public that it will pay for their retirement and their health care and their wars and their aid to other countries is totally irrelevant as to who is going to pay this debt. The U.S. Public will pay all of it.
If they can…
CAN THE U.S. PUBLIC REPAY ALL ITS IMPENDING DEBT?
The estimates of the Gross Debt vary greatly, but are generally estimated at greater than 30 Trillion dollars and are expected to be 100 percent of GDP within 2014.
It is impossible for the U.S. Public to repay this quantity of money except through a process of monetization, which means, debasing the value of money. Throughout history, human have routinely printed enough money to pay off their debts.
When money was in the form of precious metals, such as gold and silver,debasement or monetizing the debt was impossible and long periods of recession would occur.
Now, if we look at countries like Zimbabwe, we can watch the government print as much money as they desire. Unfortunately for the holders of debased currency they find that the currency will not buy anything.
Extreme inflation ensues.
TWO EXTREMES
If we look at the world today, we see that the countries of the West; i.e., the U.S. and most European countries are so far in debt they cannot possibly repay these debts.
On the Eastern half of the world, in China, Japan and smaller nations, all debt versus GDP ratios are reasonable and can easily be repaid.
Yet, the foreign reserves of China and Japan are made up of the currencies of the West.
Both of these countries are moving away from the U.S. Dollar and the Euro. However, they cannot move fast enough, since the West is the major market for these exporting countries.
INFLATION IS THE ONLY RECOURSE
Gold, today, September 8, 2010 costs $US 1260.00 an ounce.
When I first recommended purchasing Gold, about 14 months ago, Gold costs averaged $US 800.00 an ounce.
This is a 50 percent increase in about 14 months.
I PREDICT THAT THE PRICE OF GOLD WILL DOUBLE TO CLOSE TO $US 5000.00 AN OUNCE WITHIN THE NEXT YEAR!
The reason for this rapid rise is due to the fact that more and more people are aware of the rapidly increasing monetization of the world debt. The PIGS of Europe and the U.S. cannot and do not want to repay their debts.
The politicians in these countries want to remain in power.
With inflation home prices will surge again. Hard assets will rise in price. Jobs will become available as a new UNIVERSAL BUBBLE takes over and replaces the bubble of the real estate market.
All debt will be resolved by payment with cheap money, and inflation will reign supreme.
The currencies of China and Japan will jump in value. At the moment, the Japanese Yen is at the highest it has been in the last 15 years.
The ultimate reconciliation will occur as these new prices drive buyers out of the market and joblessness returns. The underlying cause of the debt, the joblessness, the Depression is the mismanagement of the Western Economy for the last sixty years.
Almost all manufacturing was sent to Asia and the people and their governments lived as though they were royalty by borrowing from the entire world.
I predict inflation, followed by more unemployment and continuation of the Depression for at least another five decades.
The people of the West are no longer workers and savers. They are lazy and spendthrift. They will have to suffer for decades until new generations learn the value of labor. The economic war with Asia will not be won easily.
Most likely, the Asians, because of their homogenous mental characteristics and their strong families and their willingness to work hard, will win. Westerners will turn into African and South American countries and economies.
The size of the debt is so staggering it cannot be calculated! This debt is owed, not only to American citizens and taxpayers, but to investors across the world.
Governments by the hundreds are holding American I.O.U.’S. They measure in the trillions of dollars. Banks and financial institutions are holding other American I.O.U.’S. More trillions. Individuals all over the planet are holding American debt paper. More and more trillions.
And can it be repaid?
The U.S. has a sixty year history of a negative international trade. The U.S. has bought more than it sold for over half a century. The U.S. at one time, about sixty years ago, was a great exporter. That time is long past. The U.S. buys almost everything it uses and pays with printed funny money.
ENERGY COSTS
I live in a large city in Florida. Daily, I drive around the city on various errands.
The houses in Florida are huge. A man, a wife and 2 children will have a monstrous five bedroom home, with air conditioning, swimming pool and an enormous lawn. They will own three cars, all of them as big as a truck. They will own boats with motors, lawn equipment with motors, tools with motors.
Inside their home they will have an automatic dishwasher, a garbage disposal unit, several washing and drying machines, vacuum cleaners and every electronic gadget known to mankind, including 10 foot wide T.V. screens and sound systems that would make a sultan feel like a beggar.
The energy cost to run all this equipment exceeds the yearly income of an entire family in India or Asia.
In addition, they pay thousands for insurance, maintenance and all types of personal service.
What will happen when their income suddenly stops? The answer is quite simple: All their assets will become almost worthless.
No one will want a gigantic house to pay gigantic taxes, gigantic insurance, gigantic maintenance and, worst of all, GIGANTIC ENERGY COSTS.
Taxes, insurance, maintenance are all local items; i.e., they can fluctuate with the local economy, as they do in Latin America or Africa, but ENERGY is an international commodity that has a price determined by the Global Market Place.
A barrel of oil like a kilo of gold has the same price all over the world. Workers in the U.S. may suddenly drop their hourly wage, the local government may lower its taxes and insurance companies might accept lower premiums, but a BARREL OF OIL will remain at the same cost as it is in the entire world.
AND, with an escalation of the world population and the consequent increased demand for energy, predicates that Energy Costs will constantly rise.
Cooling that big house, heating that immense pool, lighting the house, using all the electric gadgets within that house and moving that two ton truck called a “car” will cost multiple times what it costs today.
And, unfortunately, in a period of economic depression, wages will go down in terms of purchasing power, as more and more workers go begging for jobs.
We can easily see that the built in energy costs of the American living style will eat the American Public’s income to the last dime.
There is no way to escape the cost of energy except by giving up the opulent life style that requires such enormous quantities of energy.
To summarize, we can picture our American family using a tiny car or a bicycle, living in a modest home with no electronic gadgets and electric driven motors. Cooking, cleaning and maintenance will have to be done as it is in Asia and as it once was done in the U.S., by the use of manual labor.
THE DEBT
As I explained above, the private debt and the public debt is one and the same, since the people who must repay that debt are the same: The American Public! But the Debt is not only money that was borrowed to purchase articles and services in the past. It is also money PROMISED to people in the future!
RETIREMENT OR SOCIAL SECURITY is an obligation of the State, which must be paid by the citizens of the State.
EDUCATION is an obligation of the State which must be paid by the citizens of the State.
HEALTH CARE is an obligation not the state, which, again, must be paid by the people of the State.
MILITARY DEFENSE and all the bilateral and contra lateral treaties undertaken by the U.S. Federal Government must be paid for by the people of the State.
No one has and no one can calculate this conglomeration of costs, liabilities, interests, expenses and all the phantasmagorical intertwining ramifications and redundancies, permutations and probabilities and possibilities that are involved in the machinations of 350 million people over a period of more than a century.
No group of financial experts in the entire World has any idea of what is involved in the financial obligations of the American people and their government.
A person who lives in a world of fantasy, concocting dreams of grandeur in which he can solve all problems is called in medicine a PARANOID SCHIZOPHRENIC.
A patient with this type of ideation and behavior generally is controlled by relatives or friends or the legal system and is not allowed to write and sign contracts that are considered legal under the Law.
But, the American Public and the American Government, at all levels of authority, has been in the process of obligating themselves and their heirs to themselves and to other governments and to other parties across the world in this bizarre fashion for the last six decades.
The consequent legal and financial miasma will never be untangled.
THERE REMAINS ONLY ONE STEP LEFT
When a patient with a cognitive defect can no longer cope with reality, because the reality is so different from the delusions experienced by the patient, the typical reaction is depression or violence. Prior to this impasse the use of hallucinating drugs and the use of alcohol is very common.
We are seeing in the U.S. the extremely common use of hallucigenic drugs such as marijuana and all the opiates. The American physician is required by Law to prescribe such narcotics if the patient demands them!
In societal situations where the reality was beyond the capacity of society to tolerate the pain and suffering, there is generally a move to a radical political solution. We are seeing that today in the U.S.
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Filed Under: Asia • Economy • The E.U • The Great Depression • The U.S.
