Friday, January 15, 2010

Thoughts from Chumbawamba

Here is some thoughts from (Chumbawamba) poster over at

In a nutshell (because my education took years, so you can't expect me to give you the important background to my argument in one posting, or even several) this system is f*cked. Our debt-to-GDP ration is well beyond what other empires experienced just before their collapse. Our central bank is monetizing thin air to pay off the financial blackholes created by unregulated/out-of-control over-the-counter derivatives that are valued at well over $600 trillion globally, and our government is planning to borrow every last unit of currency under the moon in order to keep from falling into a fiscal abyss. How the hell does anyone expect this is going to turn out anything but very, very badly?

There are now literally tens of trillions of dollars of liabilities stretching from here on decades into the future. Our debt-based monetary system means these liabilities will only increase in cost and interest as time goes on. From where are the revenues going to come? The pace of productivity and wealth creation in this nation will have to inflate accordingly. How is this going to be accomplished? Do you have any answers? Does anyone?

We took a quantum leap from billions to trillions--a thousand-fold increase--in our economic discourse. It follows then that our GDP will have track this increase to keep up with the new normal. Again, from where are the revenues going to come? Are they going to be conjured up again like magic, so that we go from trillions to quadrillions as the new new normal? Or are you going to be expected to magically increase your productive output 1000 times to make up the difference, along with every other American (including children 1 and older, since we’ll also be needing more manpower for the job, way more than we have even if you include the illegals)?


The answer never comes. Oh yeah, this is simple to solve, they say. They'll just "add liquidity" to the market, then "drain it", as if this was just a matter of doing the dishes, and all the complaining and fussing and fearing and loathing and hemming and hawing was all just a matter of no one wanting to pony up to the sink to actually do the deed. But no, that’s just a cheap distraction. So the question remains:


I’ll tell you who: Us. As in you. And I. Or at least those of us that are silly enough to file and pay taxes (I don't know about you two, but I do not submit to extortion, otherwise known by the letters I-R-S). And how many people like me do you think there are now? Probably just a relative few. We're the "out there" nutballs. We're the ones that make wild-eye predictions of economic collapse and social chaos to follow. We're the ones who get pooh-poohed. Until the government keeps pulling shit like this. Then we grow in numbers. The disgusted; the disenfranchised; the disaffected. We find each other, learn from each other, and spread the wisdom. We watch as the government creeps upon our God-given freedoms like a depraved predator, one after the other, picking them off until one day we’ll be left naked and defenseless. But we prepare, and in the meantime we keep introducing new people to the mouth of the rabbit hole. And if you’re courageous, and intelligent, you’ll go in. And the deeper down the rabbit hole you go, the more you realize that real money—gold and silver—is the answer.

As more people discover the answer, the dollar takes one step closer to irrelevancy. Once it reaches that point, you have hyperinflation. Once the dollar enters hyperinflation the game is over; or rather, it just begins. But then that's a matter of perspective :)

Will the dollar cross that line of confidence? After all of my study, I sincerely believe it will and am convinced beyond a shadow of doubt about that conviction. I’ve been waiting for someone to come along and explain how I’m wrong about this. Despite my rhetoric, my eyes and mind are open. Convince me. Anyone?

In short: follow Austrian school of economics. I'm not saying they have ALL the answers, but so far it seems they have pretty damn nearly all of them.


Ask yourself these questions:

1) What system is collapsing? The one in the US? I.E. the dollar?

1a) If the dollar collapses, what does that mean domestically?

1b) What does it mean internationally?

2) Is the FDIC solvent?

2a) If not, how safe are your bank accounts?

3) Are the firms in which you have your various retirement accounts solvent?

3a) Really? Are you sure? Did you check their balance sheet?

3b) Including all their hidden liabilities?

3c) If not, how safe are you accounts with them?

4) Does America strike you as a financially strong country?

4a) If not, do you think America will remain the world's sole superpower indefinitely under these conditions?

4b) If not, what does that mean for the dollar, the world's reserve currency, and the unit of account upon which all other world currencies (except gold) are based (again, domestically and internationally)?

Mull that over.

But here's a spoiler. The answer to all the above is:

Don't wait until inflation eats away your savings. Every day you wait is like an ounce of silver slipping out of your hands, lost forever.

History is your teacher. All others are substitutes. Including me.

I am Chumbawamba.

This might seem extreme, but he does ask some tough questions...cannot say I disagree and yes I tend to ignore what he says but doesn't mean that I don't feel this way down deep within my beliefs.

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