“I’m Glad I Won’t Live to See It”

dontseeIt’s a little scary how often I’ve been hearing one comment recently, of which the following is typical. It appeared on a financial web site about a month ago:

This is all going down to hell, and we are all to blame for it. I am glad that I am old. It started maybe 10-15 years ago. Before that, pensioners would tell me they would love to be 20 years younger. Now they all say they are glad that they aren’t any younger and will soon be off this rock.

I have a highly informed friend that reminds me of precisely the same thing every time I see him.

It’s Not Just Pessimism

A certain number of people are naturally pessimistic, and some of those people might be expected to make such statements. And I’m sure that some do. But that doesn’t look to me like what is happening here.

First of all, the one common characteristic that I see among people making these statements is that they are well informed.

Second, a good portion of them are basically optimistic people, quite willing to concede that what follows the bad passage may be very good. Their concern is simply that the bad period will last too long to live through, so they’d rather check out before going through it.

Personally, I don’t think the bad period will be quite that bad or last long, but only time will tell.

The Numbers

Right now, the United States government is in the hole something like 200 Trillion dollars. That number includes commitments that are owed in future years, but unless the system breaks, that’s really what they owe. Businesses have to account for their debts that way.

The total annual earnings of US residents is about 13 Trillion dollars. That’s only 6.5% of what is owed.

So, here’s what this debt load would look like when transferred to the scale of a typical American family:

  • You make $50 thousand per year.
  • You owe $769 thousand. (Plus interest, of course.)

Good luck paying that off, especially because that $769K is laid on top of your mortgage, auto loans, student loans, and credit card balances.

These are the kinds of numbers that the “I’m glad I won’t see it” guys understand. The debts simply cannot be paid, and what happens when the system breaks could be very, very ugly.

And, of course, the problems are not just financial. The entire ruling class of the world is out of control, massively arrogant and certain to flip out at some point.

People who say such things fit into two camps:

  1. Those who are older and who understand that the breakdown process will last longer than they will. They’ll be glad to die before it gets really bad.
  2. Those who expect to live long enough to make it through the collapse and into whatever comes after.

A huge number of folks are oblivious, of course, and fit into neither of these groups. They’re the ones who will get run over by all of this… just as they do every time.

It’s my opinion that the sharper and deeper the crash, the sooner it will be purged, and the sooner we move through the welfare riots, shortages, and martial law phase. If the system breaks, productive people will get a glorious fresh start. If the system merely declines, it will drag the entire culture in the direction of North Korea.

But, again, we shall see.

Jefferson Saw It Too

As it turns out, my hero Thomas Jefferson was an early “hope I don’t live to see it” guy. But what he was concerned about wasn’t a currency collapse but the destruction of self-government via a civil war. (There are always smart guys who see it coming, though they are seldom listened to.)

Here’s a passage from a letter Jefferson wrote to a friend in 1820, when he was quite old:

I regret that I am now to die in the belief, that the useless sacrifice of themselves by the generation of 1776, to acquire self-government and happiness to their country, is to be thrown away by the unwise and unworthy passions of their sons, and that my only consolation is to be, that I live not to weep over it.

And Jefferson was right: Four decades later millions of Americans were convinced to grab weapons, march in lines, and butcher each other.

The end result of the American Civil War, aside from wholesale death and mutilation, was that the states lost nearly all of their power to Washington, DC. After that point, any claim of self-government was purely promotional fluff. If the states – who had created the union – couldn’t maintain their rights, how would any individual stand against the Beast on the Potomac?

The Civil War (and Lincoln in particular) killed the America of Jefferson, Adams, Henry and Payne.

I’m glad the destruction didn’t happen during Jefferson’s lifetime. He didn’t deserve that pain… and neither do the better old folks of our time.

I am convinced, however, of this: The more that productive people understand what’s happening, the faster the fall and reset will be.

Start talking to your friends and neighbors. Add deeds to your words. Don’t stop.

Paul Rosenberg

Collapse of Capitalism: The 9 Plagues

collapse of capitalismLet me be blunt: The collapse of capitalism is approaching.

Or, perhaps better said: Our marginally capitalist, partly-free market systems are approaching a massive collapse.

Not because of what capitalism is, mind you, but because the powers that be have bastardized it.

Capitalism can bear many distortions and abuses, but it is not indestructible.

And, make no mistake, the ‘capitalist’ system we have today has been massively corrupted, so much so that it’s sagging under the load… and will continue to do so until the proverbial straw breaks its back.

Collapse of Capitalism: The 9 Plagues

  1. The average producer is being stripped bare. In the US, for example, the total take of taxes has not risen dramatically, but fewer and fewer people actually pay them. There was a big uproar during the last election cycle over the fact that 47% of working-aged Americans paid no income tax. That means that the half who do work (read suckers) are paying the whole. And more than that, they are also paying for the many millions who are on food stamps and disability. Producers are being punished and abused, made into chumps.
  2. Thrift is essentially impossible. I’ve explained this in detail previously, but a hundred years ago, it was possible for an average person to accumulate money. Mechanics, carpenters, and shop owners slowly filled their bank accounts with gold and silver. It was common for them to make business loans and to retire comfortably. But now, all of our surplus is drained away to capital cities, where it is poured down the drains of welfare, warfare, and political lunacy. Money has been removed from the hands that made it, and moved into the hands of non-producers, liars, and destroyers.
  3. In 2008, US federal government regulations cost an estimated $1.75 trillion, an amount equal to 14 percent of US national income. Let me restate: Simply complying with regulations costs American businesses more than $1,750,000,000,000 (that’s $1.75 Trillion) every year. This, again, is money taken out of production and wasted on political lunacy.
  4. Small businesses are being squeezed out. Take a look at the two graphs below, and understand that as small businesses are squeezed out, only the large corporations remain. These days, only the largest and best-connected entities are able to get their concerns dealt with (by the politicians they fund). Small operations are cut off from the redress of their grievances and are crushed by taxes and regulation. And don’t forget the comments of Mussolini:

    Fascism should more properly be called corporatism, since it is the merger of state and corporate power.

    While there may be no dictator, state/corporate partnerships are taking over commerce in the West.

    The Collapse of Capitalism
    The Collapse of Capitalism

  5. The military industrial complex is out of control. Their lobbying, fear-mongering, and spending can only be characterized as obscene. Dwight Eisenhower was right when he warned us about this in 1960. It is sad beyond measure that so few Americans took him seriously. Trillions of dollars and millions of productive lives are being spent on the war machines of the West. Never forget that wars destroy massively and produce nothing.
  6. All the Western nations now feature large enforcer classes, composed of bureaucrats, law enforcement units, inspectors, and so on. In the US alone this amounts to several million people – none of whom produce anything, and all of whom restrain producers from producing. Millions of people are paid to restrain commerce.
  7. We now have a very large financial class in which blindly aggressive people make millions of dollars. The problem is that finance is not productive. It may allocate money in beneficial ways (though it often allocates mainly to itself), but it doesn’t actually produce anything. At present, the allocators get the big bucks, and the producers get scraps.
  8. The modern business ethic has become about acquisition only. In more enlightened times, it was also about creating benefit in the world, or at least creating newer and better things. Mere grasping is an insufficient philosophy for capitalism; it leads to dark places.
  9. Every nation on the planet is using play money and forcing their inhabitants to use their play money. Moreover, they have super-empowered a small class of Central Banking Elites, who make fortunes on their currency monopolies, and who are entirely unknown to the producers who unwillingly (and unknowingly) purchase jets and yachts for them. Our money systems have brought back aristocracies; a class that is both hidden and immensely powerful.

I think the point about the collapse of capitalism has been made with these nine points: The West has built a hyper-political culture built on lies, misdirection, fear, avarice, envy, and sloth. (Avarice, by the way, is a mindless craving for gain.)

So What’s Next?

That’s up to the producers. Everything hinges upon them. The game, as it is, depends entirely on them being willing to accept abuse.

All that is necessary to fix this is for the producers to stop being willing victims. Simple, I know, but there is a problem with such a sensible idea:

The producers are convinced that their role in life is only to struggle and obey.

Modern producers believe that the ruling classes have a legitimate right to tell them how much of their money they are entitled to keep, which charity causes they’ll be forced to contribute to, which features their car is required to have, and much, much more. Why? Simply because those other people are in “high positions,” and they (the producers) are in “low positions.” An evil assumption has been planted in their minds:

It is right for important people to order me around.

The productive class holds all the real power, but they are nearly devoid of moral confidence. So, they are abused without end.

Right now, a parasitic ethic rules the West and will continue to rule so long as producers play the part of the suckers. If this continues, what remains of capitalism will grind to a halt and will be overrun by a Neo-Fascist arrangement – not the dictator and swastika variety – but one where the state and powerful business interests merge into one unstoppable and insatiable force.

On the other hand, if ever the producers wake up from their moral coma and reject the role of doormat, they will build a society embodying the ethics of production. It almost sounds impossible, I know. But it is has happened before and could happen again.

It’s up to us.

Paul Rosenberg
Collapse of Capitalism: The 9 Plagues

Don’t Fear The Collapse: The Future Will Be Better

future will be betterYes, we’ve all seen scary post-apocalyptic films like Mad Max, or TV shows like Jericho. A real collapse, however, will be quite different from such dramas. And beyond that, there’s a good chance the future will be better.

From where I now live, you could draw a 25 mile arc which would include competent people of almost any imaginable specialty: The guys who know how to build and repair refrigerators, machines of all types, cars and roads and houses and windows and computers and a thousand other things.

So, I’m not overly worried about the dollar going to zero – as long as these guys have two critical things:

  1. They must be able to communicate with each other.
  2. They must be left alone, with no one telling them “you can’t do that without our permission.”

If either one of these two things are missing, we’re screwed, but as long as we have them, we’ll be okay. Sure, there will be some bad days, a few tragedies, and a surfeit of terror from the fear factories (that is, the mainstream media), but in general, we productive people will be okay.

I knew men who ran a business through the Great Depression, in precisely my specialties (contracting and engineering). We discussed the difficulties they faced and how they coped with them. They worked through the depression end to end, and did some pretty impressive projects – with absolutely no credit available anywhere.

They paid for things creatively – in sections, with barter, and on trust – but they also got the job done, from the beginning of the depression to the end.

Our period of difficulty (which most of us presume will be coming somehow or another) will be different from the Great Depression, but so long as we retain the two items mentioned above – and I will tell you precisely how we can keep them below – we’ll get through it.

The Bad Stuff

Okay, so if we have a complete dollar collapse, what can we expect? Here are a few thoughts:

  • Fear. Scaring the populace will be the first and essential tool of the rulers. Government relies far more on legitimacy than on force, so the rulers will be very keen on using their number one tool to keep people clustering around them for safety. That’s a primary strategy for them.
  • Welfare riots. This is possible, and even probable in some places, presuming that government checks either stop, or no longer matter due to massive inflation. However, we all know which areas are likely to be hit and we can avoid them. (If you’re in one, do something about it now.) And, as horrifying as such a thing may be (and should be!), Americans, Canadians and a serious number of Europeans do have guns, and will eventually shoot rioters as they are beating down their neighbor’s door.
  • Supply chain disruptions. Since the big corporations are so tightly associated with governments, they will not likely adapt as quickly as small companies do. They may lock-up while waiting for instructions. This is why stores of key commodities (like food) and communication will be necessary.
  • War. This is the traditional distraction from disappointments and government failures. Syria seems to be the leading candidate at the moment, or perhaps North Korea or some other distant monster will fit the bill.
  • No credit. As scary as this seems to some people, the reality won’t be nearly as debilitating as imagined (except for the mega-corps); people will adapt and go back to a 19th century way of buying and selling. Adjustment will be required, but farmers will still need to sell their food, and they will find ways for productive people to pay them.
  • Lack of currency. Dollars will fail in this scenario (along with Euros, Pounds, etc.), but there will be not be a debilitating lack of currency, for two reasons:
    • Lots of people have silver and gold, which are always good.
    • We have Bitcoin, which is good currency world-wide.
  • Shuttered fire departments. The rulers won’t close too many police stations, since they want to retain their image as saviors and because they need people to fear them, but fire departments and other things may be let go. (The scarier things first.) But again, so long as we can communicate and adapt, we can just arrange for necessary services in different ways. Remember, most of us are blowing 20-30 hours per week on TV – we have WAY more free time than we think we do.

The Future Will Be Better if We Take Care of THESE TWO BIG RISKS

There are very simple solutions to our two crucial issues. But remember, simple isn’t always easy. Here are the solutions:

They must be able to communicate with each other.

This one is actually easy. The solution is mesh networks. (You can find a nice PDF primer here.) These are local networks, built with simple wifi devices. These, combined with a few longer links, can create a very nice communications network. You won’t be able to use it for videos, but it will work well for basic communications. (Though you really should keep a small electric generator and some gas.)

They must be left alone, with no one telling them “you can’t do that without our permission.”

The solution to this one is very simple: Do it anyway. Whatever you think of your local government, I very much doubt that you think they have a right to starve you – which is what failing to act in your own survival comes out to. If it’s moral, do it. Stop waiting for permission.

So, while the big collapse (assuming that it does come) will be terrifying to inveterate TV watchers, the reality will be far less apocalyptic than promised… assuming that we productive people act like producers.

And as producers, we have so much more choice than the others. Indeed, in one way, we could see the collapse as an opportunity to start fresh. The future will be better if we ultimately say so.

Paul Rosenberg