Episode-1082- Why the Economy Will Boom then Bust

There are two schools of thought that seem to exist about our economy right now.  The first seems to be we are screwed and very soon.  The second seems to be there is nothing to worry about, the economy will have ups and downs just like always but long term we will continue to grow and move forward.

Both of these are short sighted.  The first view is like being told you have a treatable but eventually fatal cancer and assuming that means you will be dead by next week.  So you blow all your money on a big party and a trip around the world.  The second view is like just ignoring the cancer since it is slow moving and likely won’t kill you for a couple years, who knows you might survive 5 years or more so don’t worry about it.

In both these scenarios the patient is harmed more then they should be.  The smart decision would be to evaluate and pursue the most common sense and reasonable treatment available while attempting to continuing living your life, hopefully valuing each day more and doing what you can to beat the odds and become an odds breaking survivor.  Well, in the case of our economy it isn’t you that has cancer, it is someone you care about.  Put into this context we understand why we need to take a sobering look at out economic future.

Join Me Today As We Discuss…

The Cancer

  • The real lesson of “Walmart’s February Sales Disaster”
  • The demographic bomb just around the corner replacement rate is 2.1
  • The cost of Social Security by 2017 – 1 Trillion Plus Annually (source DebtClock.org)
  • Cost of Medicare/Medicaid by 2017 – 1 Trillion Plus Annually (source DebtClock.org)
  • Interest Payments on Debt by 2020 – 800 Billion (source CBO)
  • National Debt by 2017 – 22.6 Trillion (source DebtClock.org)
  • How the hype around the sequester shows our pending doom
  • Economic expert trump card?  It doesn’t mater because we print our own money!

The Pre Cancer Party

  • Printing money will work as long as your currency is exchangeable
  • The natural gas boom is real, nothing creates prosperity like cheap energy
  • The coming medical care disaster will have its on pre disaster boom
  • The US will gain a large influx of international money
  • Some sort of “amnesty” will pass and bring in a lot of tax dollars

The Cancer Metastasizes and the Patient Goes Critical

  • The boom creates steady inflation, said inflation gains steam
  • Rates must be raised to quell inflation but it is a trap on existing debt
  • Cheap energy isn’t so cheap as inflation eats away at affordability
  • The tea cup and entitlement generations are becoming our main workforce
  • Boomer retirement hits critical mass, most are working past 65
  • The real cost of Obamacare is realized in 2016-2020
  • Rising economies are better able to compete for investor confidence
  • Many crises around the globe are not wasted and the dollar looses reserve status
  • China becomes the largest economy in the world
  • Commodities become the backer of currency, the US is bankrupt

Resources for Today’s Show…

Remember to comment, chime in and tell us your thoughts, this podcast is one man’s opinion, not a lecture or sermon. Also please enter our listener appreciation contest and help spread the word about our show. Also remember you can call in your questions and comments to 866-65-THINK and you might hear yourself on the air.

74 Responses to Episode-1082- Why the Economy Will Boom then Bust

  1. I agree with almost everything here. However, I am worried about China. I believe they are headed for an even bigger real estate bubble explosion than the US experienced. If that economy collapses we could see a world-wide depression that might make the 20′s and 30′s look like a recession!

  2. RationalHusker

    Great! The podcast I’ve been waiting/dreading to hear for a few weeks now. Perhaps one best listened to with your favorate beverage in-hand.

    Jack – I saw that you posted on Greg Mannarino’s YouTube channel. He (and many others) have been waiting for a stock market correction that just doesn’t appear to be in the cards right now.

  3. When you were talking about the baby boomer “perfect storm” of the younger retirees who want their social security added to the older retirees who want more money – you forgot somebody. There’s a crapload of us who qualify for SS but want to work with few jobs for anyone over 50-55.

  4. Great show. Information like this is very useful and I’m thankful for it. Sounds like my dream of opening a button factory is a no go. Probably time to get my foot in the black market, at least it’s honest. Marijuana plant guild? Hell yeah! Thanks again.

  5. Jack, it seems that sometimes a country will go to war to try and circumvent their economic woes…I don’t think I heard you comment on that possibility. You know how the U.S. Government loves its wars…

    • That has always been the way U.S handles the eyes of their people. By focusing them outward. Good comment.

  6. …. like Iran maybe?

  7. One other puzzle piece that might fit here. If the fed raises interest rates it puts the breaks on for the economy but creates other problems the the debt turnover, so what other option do they have? How about all this stupid looking micromanagement of the economy and over-regulation of everything. Those too reduce productivity and slow the economy. 3D space chess move or just greed and stupidity.

    • Modern Survival

      Old school war is dead, it can’t be done now that all developed nations can eliminate all life on the planet. Regional conflicts suck money from economies.

      This is an old world paradigm where big bankers could fund both sides and win as the power structure shifted to either side. Those days are dead, modern warfare is financial.

      The greatest force you should fear now is your own government using force on you and your fellow citizens.

    • You mean like DHS buying massive amount of bullets and tanks and yet trying to forbade the citizens from owning more than 7 bullets? :)

  8. Waiting in the Weeds

    Well it seems to me that my intuition that people have 5yrs or less to pick a damn secure State for their needs / safety is reaching critical mass.
    I’m not waiting around to play musical chairs and see if I win / luck out.

    Thanks for reminding me to kick myself in the butt Jack yet again.

  9. I haven’t listened to this episode of Jack’s podcast yet, but on the topic of China that has been discussed on the blog recently, I read this article today and thought it was very interesting:

    http://www.theatlantic.com/china/archive/2013/03/interview-lee-kuan-yew-on-the-future-of-us-china-relations/273657/

    I’m going to pick up that book for further reading.

    Some excerpts from the article:
    ————-
    Are Chinese leaders serious about displacing the United States as the number one power in Asia and in the world?

    Of course. Why not? They have transformed a poor society by an economic miracle to become now the second-largest economy in the world — on track, as Goldman Sachs has predicted, to become the world’s largest economy. They have followed the American lead in putting people in space and shooting down satellites with missiles. Theirs is a culture 4,000 years old with 1.3 billion people, with a huge and very talented pool to draw from. How could they not aspire to be number one in Asia, and in time the world?

    For America to be displaced, not in the world, but only in the western Pacific, by an Asian people long despised and dismissed with contempt as decadent, feeble, corrupt, and inept is emotionally very difficult to accept. The sense of cultural supremacy of the Americans will make this adjustment most difficult. Americans believe their ideas are universal — the supremacy of the individual and free, unfettered expression. But they are not — never were.
    ….
    From 1945 to 1991, China was engaged in a series of wars that nearly broke them. This generation has been through hell: the Great Leap Forward, hunger, starvation, near collision with the Russians — the Cultural Revolution gone mad. I have no doubt that this generation wants a peaceful rise. But this generation’s grandchildren? They think that they have already arrived, and if they begin to flex their muscles, we will have a very different China. Grandchildren never listen to grandfathers. The other problem is a more crucial one: if you start off with the belief that the world has been unkind to you, the world has exploited you, the imperialists have devastated you, looted Beijing, done all this to you — this is not good.

    • Modern Survival

      One thing I will point out though that I disagree with about the above,

      “Grandchildren never listen to grandfathers.”

      That is FAR less true in all eastern societies then in western societies.

      • As an American Chinese (American first ;), I notice there is teacup-fication(a makup word) in China too. I am surly a teacup when compare to my grandfather who fought in WWII along the British in Hong Kong. Although, eastern culture may respect the eldery more, but you cannot under estimate the damage the One Child Policy of 1979 left behind.

        Generations and generations of spoiled teasups since the 80s…. Some of them may be driven, but they are driven because they can get more reward from their grandparents. The Chinese teacups look like what you would expected – skinny jeans, listen to famous pop stars, wanted the government to feed them, so on and so for.

        The current China is run by the generations before the One Child Policy. The current Chinese generation made the mistake of trading their food sovereignty for a real estate bubble. China would have their few moments on the world stage. When the Chinese teacup generations start running China, it will be time for another country to take the stage.

        As for me, China may be the next super power. But the US has the Bill of Rights and the Constitution, and that is all the reason I needed to call this country my home.

        • Modern Survival

          Well I am glad to have you here. Note that when I speak of China’s rise it isn’t with pride or hope or joy or even resentment, it is just a statement of fact. People need to be prepared for the shift that is coming.

        • CY — Good point. The generation of spoiled Little Emperors in China are used to getting their way. Combine that with a seriously skewed gender ration of many more males than females, and I think we are going to see a very aggressive China in years to come.

          One thing we do have going for us is that our Bill of Rights and the freedoms we have will hopefully continue to attract more folks like you, Jack, me, and the rest of the TSP community to our shores.

          Jack — note that the guy who is saying “Grandchildren never listen to their grandfathers” is none other than Lee Kuan Yew, ethnic Chinese and founder of Singapore. We are exposed to the hardworking, freedom-seeking Americans who come from China, and who are a model of self-sufficiency and hard work in this country. But I think Mr. Yew is more tuned in to what is really going on in China these days; there is a tsunami-like wave of change overtaking that culture as well, and we would do well to recognize it.

        • Modern Survival

          This is all very interesting and VERY disturbing.

        • Jack, I fully understood what you meant. I just wanted to point out how great we have over here in America. If the shift happend, this is the place to be. I cannot image how oppressive the Chinese government can be during the shift.

  10. I know this is preaching to the choir.. but IMO the real long term issue isn’t the solvency of the state, its the poverty of the people.

    We have developed a culture of dependency, with most peoples ‘wealth’ existing in the form of IOUs from the government or their pension fund.

    Dependence on others, whether for food, shelter (mortgages), energy (gasoline, electricity) or even ‘care’ is pricey, and will only get pricier.

    And of course money supply inflation, and the inflation of markets distorted by government dollars (sick care, education, and now the mortgage market) don’t enrich the average man.

    Added to this you have an environment where banks can speculate ‘on the house’.. why pass up a risk free bet to ‘gamble’ on actual businesses?

    Summary: MORE state dependence, and a fall in real wealth, as the state bleeds out. Even WITH the boom.

    You can trade all the natural gas for imported food that you like, and call it prosperity. But it ain’t. Just look at the average citizen of Venezuela, or Saudi Arabia.

    • Modern Survival

      Have you ever been to Venezuela? I bet it would surprise you.

    • =)

      I have visited Venezuela and Saudi Arabia. They have some great infrastructure and all the money sloshing around does lead to some real wealth for the entrepreneurial minded. My concern is that it also allows freedom to bought with more ‘bread and circuses’. The average entertained citizen isn’t ‘wealthier’ he’s just better fed and better dressed. As soon as the bread truck stops rolling, he goes hungry.

      Chavez’s entire platform was ‘more bread for the poor’. Saudi’s are paid a ‘stipend’ for existing, as long as they stay in the cities where they can be controlled.

      Not saying it well.. but, my opinion is:
      last boom = more milk from the government teat
      more milk = more dependence (people getting used to and expecting that level of support, and therefore not seeking self-sufficiency)
      when the teat dries up.. more suffering even than if it stopped now

      I do realize that the US is slightly different in that the government isn’t DIRECTLY receiving the natural gas revenue.

  11. I haven’t listened to the podcast yet, but my big question is what will be the “safe” and “secure” jobs five years from now. I’m 43, a landscaper in Florida, and am feeling it on my body more and more.

    What are the best jobs out there according to age brackets and such? What practice would be the smart training?

    (Possible topic for it’s own show?)

  12. Thanx, Jack. That was some great original thought backed up with realistic practical logic. It would be wonderful if things turned out in most of the many ways you pictured. I’m probably too old to ever see that vision of freedom, but I hope to help you young’uns live that life, someday. Cheers! and thanx to your brain!

    • The moisture map is cool.

      I have a hard time believing the population article for two reasons:
      1) Boomers, on average, don’t have a big pile of money they’re just waiting to spend in retirement. Which is why a lot of them aren’t retiring. On average their largest ‘asset’ is their home. I’ve talked to boomers in my neighborhood who basically took out equity loans during the housing boom, and now have no equity (even without falling property values.. they already spent the equity).

      2) Millennials are leaving college already heavily indebted, at levels equivalent to the median mortgage debt. So where does the money come from for more spending?

  13. Jack, if I remember correctly, you were *tentatively* expecting a severe economic downturn around 2013-14. (Correct me if I’m wrong.)

    How does your analysis in this episode change your timeline?

    • Brian W/NorIDhunter

      @ Jarrod – NOT speaking for Jack, but what time frame/shows are you referring to in the 1st paragraph?
      Fwiw, over the last 300 or so shows since I’ve been listening, I’ve heard Jack’s expectations evolve based on actual events, If we’re playing 3D chess, and you have “x” amount of moves available, I can’t say for certain what the next move or 5 will be; I can only expect what the best probability will be based on the move(s) at hand.
      Life is what happens in between our plans.

      • Brian, I’ve been a regular listener since about episode 50. I recall, oh, I guess around in 2011 or so, Jack *tentatively* expecting a bust sometime in ’13-14.

        Given his recent additional analysis, I was interested in how his expectations changed.

    • Modern Survival

      I was also expecting significant recovery long before that, which never occurred. The statements made based on dates were also always expressed as my best guess I don’t do timelines with any definitive statements.

      As Brian stated below my analysis evolves as the situation evolves. At the time I was only looking out that far we were in what 09-10 at the latest. There was no real understanding of the shale oil and gas boom yet and it appeared that we would have had a much higher bounce back then we did.

      I don’t think people get how bad it would have been if the economy came roaring back the way everyone wanted it to. In many ways the Fed did the best they could have in the current system, they infused money sufficiently to stop the fall but didn’t do it in a way that got the economy going. I don’t know if they got lucky or got it right, I am leaning toward getting it right.

      There is a global issue here as well. My view was the rest of the world would get far more untethered from us then they are by now. No doubt they are working at break neck speed to do so but they haven’t moved far enough yet. China is about 30% to where they need to be, Brazil and India 25%, Russia is more like 40%. The Eurozone slowed things down as well, that I should have seen coming. Watch now as the Russians and Chinese both seem to become more US friendly then anytime in history all while working together to diversify the global economy and separate themselves from the dollar as swiftly as possible.

      Make no mistake though, even with everything playing out this way, it is only the energy boom saving 2013, without it this year would be a blood bath on Wall Street.

      • Jack, I know you weren’t making forecasts like Celente does. You were making the best *tentative* assessment based in available evidence.

        Thanks for your revised assessment. It is interesting.

  14. I enjoyed this podcast a lot more than I thought I would before I actually listened.

    I absolutely think that the entitled teacups are going to be a much bigger contributer to the problem than most think. I’ve been saying this for a long time, and it’s important to realize WHY we have those kinds of folks.

    It seems that the folks who’re most entitled are the ones who’re most removed from the Great Depression. The baby boomers were being raised by folks who lived through that and taught their children how to do for themselves and value a hard day’s work. With each successive generation though, those lessons get diluted and forgotten, and then folks can’t put things into perspective.

    Society’s distance from God also plays a role, I think. I’m always teaching my kids about an “attitude of gratitude”, but most folks who’re 30 or younger don’t truly understand what that means. They’re not being given the moral compass to point them in the right direction, and they don’t have the spiritual tools to “suck it up”, “find a way”, and “be grateful for what you have because it could be so much worse”.

    Add into that the intense breakdown of family, and you have a bunch of folks who’re trying to overcompensate. “I have to be my kid’s friend since his father isn’t in his life.” No, it can’t work that way. All that does is teach folks that they should be pitied, and that makes them feel entitled to everything!

    Even as a blind person, someone who could easily feel entitled, I have a pretty hard-nosed view on things. Admittedly, my views aren’t as hard-nosed as Jack’s, but if I can make lemonade out of sour lemons, there are plenty of other folks who can too. They just choose not to, and that’s going to hasten the “bust” in the end.

    • I really love you attitude. Thank you for sharing and reminding me that in order to want to live, one needs a purpose to live.

  15. Hey Jack you said this:

    “inflation is growth and growth is inflation”

    I just wanted to point out that in monetary theory, the conclusion is basically that for inflation to be totally flat, 0% annual, the money supply should grow at the same rate that the population grows (there are other factors, but this is an approximation). If you do that, prices should stay about the same, assuming other variables stay the same: technology hasn’t improved or that kind of thing. This reflects, approximately, what you would find “in nature”, ie you would have more people digging for gold or otherwise acquiring whatever medium is used for money and the effort applied to that endeavor would reflect the degree to which the value of money increases over time due to increasing pop.

    In that case then, inflation (or, unhealthy “inflation” if you prefer to define all monetary expansion as inflation) is when the money supply grows faster than the pop. I believe, excluding immigration, the U.S. is still slightly better than flat with regard to population growth, but its close. The government relies on inflation to “get away with” its borrowing to some extent (by devaluing that debt), regular money growth that matches pop growth doesn’t really devalue the debt, they need that “extra” growth.

    Anyway, the other thing is the govt also gets to use ALL new money first including the non-inflation portion of money supply growth that I talked about above. Because that money hasn’t really made its way into the economy it’s stronger than it is by the time it gets out into the economy. So even to the extent money would grow naturally, the govt is getting all the benefit of that as well, another reason they want the population growth.

    Finally, in my opinion inflation becomes a sort of levered derivative of population growth, from the perspective of the govt, the higher the pop growth, the higher the base money growth AND the levered inflation introduced over time all of which the govt benefits from first!

    So anyway, yeah I agree the govt is going to have a strong incentive to increase pop growth. Amnesty or some other way to attract new pop will probably be the subjects of experimentation, conceding to political constraints. Don’t forget the chinese are starting to buy land, and they are a LOT less politically a hot-button than the mexicans/latins. I think your call is correct (big picture-speaking), but it may end up being focused toward some other group like chinese/asians…

    Anyway just wanted to add all that for whomever might be interested in one point of view regarding inflation/money supply.

    • Modern Survival

      Saying that is like saying how communism is supposed to work.

      • Not sure how you mean that. One would require some base understanding of money in its traditional form before being able to correctly understand the modern bastardized version. Generally the “informed” people now will refer to all monetary expansion as inflation and degrade it. And that’s a perfectly fine position given the current climate for the most part.

        In reality in a natural monetary system (which have actually existed many times and in many places throughout history, as opposed to some idealization of communism) the money supply will grow in an organic and healthy manner. In our case, that growth isn’t enough or the whole thing collapses. Govt HAS to have the additional levered inflation to make their borrowing work and the amount of “wiggle room” for real inflation will be levered to pop growth, not some flat number that stays the same irrespective of pop growth.

        • Modern Survival

          Again this is like explaining how communism is supposed to work. It doesn’t matter because it doesn’t work, never has, never will and can’t.

          The only way the M supply can grow organically is just that organically, as soon as any group, government or agency can print it, all bets are off. How did M grow during a gold based economy? You dug it out of the ground and the final supply in any event is capped.

        • Well in any respect I thought folks might like to know that a component of money supply growth, even in a fiat currency, is “handled” or nullified or normalized by pop growth. Govt needs something above that to really get the value destruction of money in order to support the debt growth.

          Thanks.

  16. Hey Jack,

    I just listened to this podcast yesterday as I was working my second and third jobs so I can get debt free and better my families situation.

    I greatly appreciate your podcasts and the wonderful guests you have as well as the information you provide. It has certainly helped wake me up to more of the realities of this world and has provided me with more structured ways of articulating my views to others.

    That said, I have to take some issue with something you said in this podcast. You eluded to more jobs in the medical sector and mentioned that somehow less skilled people could be trained to be a C.T. tech because all they do is follow this or that protocol. So, having been an X-ray / C.T. tech for the past 20+ years I will tell you that there is way more to being a CT tech, or an X-ray tech for that matter, than just “pushing buttons”. I think that is one of the great misnomers in medicine.

    X-ray and CT (and ultrasound and MRI) techs undergo some pretty strenuous education. Medical Terminology, Anatomy, Physiology, Physics, Human Disease processes are among a few of the classes that we take, sometimes right next to pre-med students.

    We work intimately with physicians and surgeons performing studies, biopsies, even interventions sometimes right there on our scanner table. Yes, there are protocols and they are followed probably 60-70% of the time. But, part of being a good X-ray / CT / Ultrasound / MRI tech is knowing when to deviate from the standard protocol and provide your radiologist with the best images for the given patient. We also start IV’s, perform CPR, not to mention the fact that we utilize machines that emit ionizing radiation and need to pass a very detailed and comprehensive registry exam before we’re even allowed to work in the field.

    Just a little perspective on what it takes to function in the world of medical imaging. It’s not something you could teach some schmuck off the streets to do. It takes a well- educated, clinically trained and accredited schmuck to do that.

    Thanks for your show and all you do Jack…KEEP IT UP!

    • Modern Survival

      1. I edited your comment and put some spaces between the paragraphs so they could be read more easily. Man many of your guys need to make better use of the return key.

      2. I get what you are saying but I am still saying that it is highly practical that such training could be faster and mostly on the job. Of course you get better over time so does anyone from a meat packer, to a computer programmer to a neuro surgeon.

      The reality is there are many “educational programs” that are mostly fluff and puff and most positions in Medicine and many others could have these programs streamlined, I am saying not only can they but they will. Sadly it will likely be done poorly though and quality of care will suffer, though it doesn’t have to, well with Obamcare it kind of does I guess.

      • If you regard the CT Technologist’s job as “easy” just pushing buttons, and saying “hold your breath” then it is probably because you had a scan at some point in your life and from your limited knowledge and experience, the tech made it seem easy. And that is a good thing, it shows that they were competent. There really is a lot more to it.

        You might want do do some research before putting down an entire profession. If you were wanting to make commentary on the usefulness of on the job training versus “fluff and puff” education, then by all means I support that.

        In fact I actually went to a hospital based x-ray training program which was two strenuous years, and then advanced over the course of my career into CT/MRI all through on the job training. Up until the mid 1990′s these hospital based programs were very common. They are all but extinct now, I do not see them returning anytime soon, and this is why.The colleges put out a steady stream of good quality techs that facilities know are well trained and have already passed their boards. This is beneficial for hospitals as they now have a glut of new grads every year looking for a job, not so good for the tech looking for a job and quite frankly lucky to get one these days. In the 90′s and early 2000′s there was a shortage of CT/MRI techs and hospitals would routinely pay sign on bonus, and relocation money to attract good candidates. So, why would hospitals ever want to return to that model….they won’t.

        I love your podcast and listen everyday.
        Thanks for all you do.

    • I am a veterinarian and have to agree with the imaging techs that it is not a simplistic job. I have some people get on-the-job training with me, but if the technician or myself is not there to do the positioning and technique, there won’t be a readable image produced, even though I have a top-quality digital radiology system.

      It’s true that it’s a technical job and doesn’t require extensive background in biochemistry or physiology. But it does require some understanding of the conditions being imaged in order to obtain all of the needed images and especially to know when to retake them. If you don’t understand what has to come out of the image and send bad images to the doc, the patient would have the entire series repeated. IOW, if you try to speed-train someone because it is cheaper, you will lose so much efficiency that it would cost more in the long run.

      The one area that is an exception IMO is the “passed the boards”. Most professional board exams are not very highly related to real clinical work. The only reason we hire boarded techs in most medical fields is because the government says we have to, and/or the liability issue, not because board-certified indicates quality. If you could get some emergency reduction in requirements, you could train more efficiently. I believe Kentucky has such a bill in their state right now in reference to expanding what nurse practitioners can do.

  17. Enjoyed the podcast and agree with the majority of your commentary.. Seems to fit in well with what James Rickards has been saying about the economy. Wondering what you think of Chirs Martenson’s call of a 40-60% reduction in the market by September over at Peak Prosperity:
    http://www.peakprosperity.com/blog/81049/warning-stocks-likely-crater-here

  18. Horderunner

    Jack,
    Your podcast was a good flyover of the financial world, I appreciate your humility and caution in predicting exact scenarios- a sign of wisdom versus arrogance.

    Not that you have made a big deal of your timeline, but my observations and generally watching of the speeding up of political events suggest the timeline to a financial reset may be much shorter than 2017.
    No one knows the exact timelines, but some food for thought:

    We simply do not have good data that is critical for forecasting from the countries that will pave the way for the next global trading system. Especially and specifically China. They are notoriously either inept (unlikely) or intentionally deceptive (more likely) regarding economic data reporting. I and others believe gold reserves will be a key if not the most important data point for China being “ready” to hit a reset button. We do not know what their target for gold holdings is, nor what they actually have. Ditto Russia, India, Brazil, all the key “new bloc” countries.

    While I share your view and see the value in the “production-based” or “commodity-based” monetary systems, to me they are too complicated and hard to measure- subject to fraud and distrust. That’s why gold and silver have worked throughout time- all the qualities of money (rarity, fungibility et al), plus simplicity. Most times simplicity works better.

    Reports from insiders involved in the actual OTC gold wholesale market (not the spot market that the MSM and we mere mortals deal with) say that the movement of gold to the East is 5X or more what is reported to official agencies like the World Gold Council. We have to be honest enough to admit that, though very frustrating, we simply do not know how much gold China, Russia, Brazil, and many countries, including and especially the U.S., actually have in their vaults (the U.S. won’t audit and China won’t say).

    More importantly, the factors to consider while watching events is that:
    1) We live in a very connected, almost hyper-connected world, not just physical goods and services, but most importantly, financial relationships (AKA future dominoes). I know you have covered this well. Creates a very fragile system subject to great dislocations from small events.
    2) Small events, sometimes called black swans, can trigger much larger events. Things as small and singular as one person and their action can make huge effects- please google “London Whale” as an example of one trader that destabilized JPM. With the internet, news travels instantaneously and incredibly widely. News shapes consumer confidence. Consumer confidence shapes markets. Yes, the financial managers have lots of techniques. None of them is greater than Mr. Market or Mr. Resources. Silver prices can be suppressed, but when silver runs out, silver runs out, regardless of how many synthetic pieces of paper the bullion banks create.
    3) There are many people and many scenarios that could serve as black swans, some human-caused, some natural events. While you will correctly point out, that any single, specific event is low probability, we need to consider that with many possible black swans within a very fragile system, this may not be that unlikely if you add up the probabilities. And not compatible with a >4 year timeline.

    I don’t claim to know exact timelines (I have a bit of wisdom too). But the current situation with rapidly degrading financial and social systems in Japan, Europe, the U.S. and probably China, I am personally not ruling out a reset-type event in the next 1-2 years. I don’t think you are either, but I heard a tone of moderation in your podcast, as in, don’t worry about the near term, this is going to go on for a long time. Please stay 360 vigilant (and live that better life while doing so).

  19. Listened to the show today. Thanks for all the work going into it.

    Pretty depressing though. Many things to talk about.

    First, like you, I do see another bust. To me this recession is similar to that before the depression. (The stock market defibbed back then too) If it does bust as bad as you think it will, look out! It’s gonna be worse than anyone realizes.

    We are very devided as a country right now and any collapse will divide the people even more or introduce a much tighter controlling governemnt.

    I do see a way to kick the can down more. Africa.

    There isd no way we are going to let China have the continent to themselves. We already have a C&C there and will let businesses go there and make those people work at slave wages while all the taxes from the products will be used against the debt. Even if the entire US was on food stamps, the quarter a day wage paid for a product that will sell for $10.00 (in other countries, of course) will delay things for a few more years.

    Add in a few wars over there to make China and Russia spend some of their money and it delays the crash even more. (You can add Korea, Syria, and Iran to the target zones as well.)

    It’s just my opinion, but there are still many ways to kick the can down the road. Who knows, the bust might not happen until 2025.

  20. Karen Papandrew

    This is the best podcast yet, and I’ve been listening for a couple years now.

  21. What scares me about the teacup generation is IMO, they line up with the 1930s German citizenry attitude. I worry they will put true evil in charge because that group has a plan. Especially since are kids are being schooled as goverment will solve everything. Of course, our education system has strong routes to that of the German system, who put it in place to create obident citizens.

    I understand the teacups somewhat. As a society gets richer the following generations stray from the hardworking values of the previous generations. Dan Carlin has a good hardcore history podcast talking about the Mongols and how their dominance fell because of the rich empire being handed down and the disconnect from Ganges Kahns belief system.

    I’ve been a father now of my daughter for over two years and a step dad for 4. My daughter is very independent. We like her fall and get banged up she might have bruises but she gets right back up. We let her try almost anything and encourage to do things. I was watching a couple the other day spoon feed their child who looked a few months younger than our daughter. I asked my wife why that looked odd. It was because we let our daughter try and use a spoon early and she figured it out before she was one. My stepson, 8, was coddled by his dad we he was young, in fact has dad spoon fed him at 4. It has been a struggle to get him to try new things, accept failure, share with others and just believe in himself. He would throw fits when he cut himself playing and would demand a bandaid. It’s a work in progress, now he’s proud when he does cry at a cut. Funny enough our daughter is teaching him better than we are.

  22. never knew you were a hockey player jack. best part of the podcast though.

    this whole “teacup” awakening is what neil strauss went through at the outset of his journey which eventually became the book “Emergency”

    think this step is part of the process for most of us: “Hi, my name is Dan, and I am a teacup.”

  23. On a lighter note I loved the hockey story. I grew up in Pittsburgh in the 70′s. We played hockey in the street with parked cars on both sides. (That’s back when a car could take having a kid body checked into the side of it without caving in!) I remember many a game that we had to take a quick break to let someone get over the fact they had been checked into a side mirror. Good memories! Thanks for bringing them back. Great show.

  24. In your podcast, you said something about the Social Security money being stolen and wasted, but it was actually handed out to people who paid in little to nothing. A newspaper report I read two years ago said the WWII generation paid in on average $500 in their entire life and got back on average $500,000, mostly in healthcare costs. The same report said it was estimated the 78 million boomers will each cost taxpayers on average, from the time they retire until they die, from one to two million bucks. What is 78 million times two million? Many economists say the boomers (along with government employees and vets) have been promised between $140 trillion and $202 trillion

    For decades, I’ve been checking the yearly IRS report on where the federal funds go. (There used to be two pie charts in your instruction booklet we got from the IRS in January. One had the income and one had the expenditures for each year. Now, you must go to the IRS site to see those pie charts.) Under Reagan, Bush Senior, and Clinton 2.5% of the federal budget went to run the federal government, 15% went to defense, 15% went to interest on the debt (which was a fraction of what it is today but interest rates were higher then), and 99% of all the rest went to social programs, mostly to retirees. Today, 20% goes to defense, 4% to the VA, and only 2% to run the federal government. Interest on the debt (as a percentage of the budget) is about half what is was, despite the debt being many, many times higher, so we still have most of the budget going to social programs.

    To show how bad it is, in the early 80s, the entire federal budget was one half of a trillion, now we have twice that, one trillion, on the student loan books alone! The Heritage Foundation says most tax filers are negative taxpayers, getting more from the feral government than they pay in taxes. You have to earn close to $100,000 a year before you will pay in more than the federal government spends on you. This is variable because of all the deductions for children, IRS, 401Ks, SEP, SIMPLE, etc, but most tax filers do not pay in as much as they get back, and this is BEFORE they retire.

    The entitlement mentality actually started in the 30s under FDR and has gotten worse with each generation. We started down the road to ruin with the New Deal. Our Founding Fathers warned that allowing voters to commit armed robbery by proxy through the vote has destroyed every democracy in history and did all they could to limit the power of the federal government to the enumerated powers, but FDR threatened to destroy the SCOTUS when they ruled 10 times against him, and they backed off. He was allowed to destroy nearly all the safeguards put in place by our founders and end the concept of a federal government limited to the enumerated powers. James Madison wrote that charity is no duty of government and the federal government should almost never deal with domestic matters at all. Today, people see the government as their father and caretaker. Millions of single women have replaced husbands with government; it is their sugar daddy, and they vote for the social program party every time. That’s not to say millions of men don’t vote for OPM (other people’s money) every chance they get.

    • Modern Survival

      That isn’t what I am talking about, SSI would have NO PROBLEM being fully self funding if the money collected was used for SSI but all SSI taxes immediately go into the general fund and have for many years.

      Oh and if you really believe that the average person in the WWII generation only paid 500 dollars lifetime in SSI, it is pretty easy to LIE TO and have you believe it. People who were 5o years old during WWII may be but the WWII generation paid SSI on average from about 1935 – 1985 some longer. Sure a few retired before 1985 a few before 1975 but if you look at the men and women that really fought the war and ran the factories most where in their 20s during the war, that had them paying in for 40-50 years on average.

      The people who only paid in for a few years are all dead now. A guy who fought the war and was say 22 in 1943 would be 90 today, there are very few of those guys are left.

      Putting it this way there are perhaps what 40-50,000 centurions (over 100) in the US today. Even a person 100 years of age right now would have been 22 in 1935 when SSI was established, said person would have paid until 65 minimum. That would have been 43 years, but I guess it is all those greedy life pigs that only paid in for about 40 years breaking the system right?

      Trust me those “evil people” who only paid in for 5-10 years and then collected are all LONG DEAD. Someone who paid in 10 years and retired at 65 in 1945 would be 143 years old if still alive today, met anyone that old lately?

      Don’t believe shit like this, it is just to keep us divided, old and young, black and white, immigrant and native born, etc, etc, etc, all while your leaders get away with screwing up the country.

  25. So, what do you think the WWII generation paid in?? My parents were “WWII generation,” and I know what their incomes were. My father was 17 when Japan attacked. He retired in 1985. As late as the late 50s, he was making $35 a week working as a prison guard for the Sheriff Department. Even in the mid 70s, he was making only about $8,000 a year and so were teachers in the county. As the father of 7 children, his taxes were zero to a few dollars a year. That little income was enough we never felt “poor.” SS tax started out at 1% AFTER deductions and exemptions, half that paid by your employer. The MAXIMUM you could pay was $30 a year. Most paid less than 30 cents a year in. In the 30s, there were large families living on less than $100 a year. Even by the late 60s, the MAXIMUM SS tax you could pay, even if you made $100 million was $240 A YEAR. If you REALLY believe the WWII generation only got back what they paid in, you must believe anything people tell you.

    As a business owner who retired on my own money in my early 50s, I have paid in the max self-employment tax for decades, but even I could EASILY cost the taxpayers more than I have paid in ALL taxes in my entire life just from ONE hospital stay if I live long enough to go on Medicare. Half of tax filers pay ZERO federal taxes. The simple fact is, weather you want to admit it or not, past generations did not pay enough into SS and Medicaid. As for the SS revenue going to general revenues, if it had just sat in a fault, it would not have received the interest it did from the federal government (other taxpayers) and SS would have LESS money in the “trust fund” than it does now. The law that set up SS forbids the money being invested anywhere but the government.

    • Modern Survival

      Now see those numbers show the real blame do they not? Seriously can you pull back and use your own numbers to figure out who is really responsible for this mess? Is your dad that busted his ass? No, the problem here is about the devaluation of the dollar, not SSI itself. Connect the final dots please.

  26. BTW, I didn’t post a thing about anyone being “evil,” just mathematical FACT. Just as it’s fact the Constitution does not allow for ANY social programs at all at the federal level, and the SCOTUS ruled so many times before FDR threatened to destroy it. NO country has been able to make Socialism work and wealth redistribution IS Socialism. This country is broke because people do not pay their own bills. 75% of the budget over the last two or three generations has been socialism and interest on a national debt that would not exist if not for those social programs.

    • Modern Survival

      That isn’t the point here, you are making your parents the enemy. The system exists, they paid in, they were made a promise and there is FAR more then enough money to cover the promise. You are also mixing Medicaid with SSI, SSI can work, I don’t want it but your parents are not why it doesn’t work, period.

      Medicaid is a complete disaster and cannot survive.

      Just stop calling total bullshit mathematical fact.

      No one wants SSI done away with more then me (with a phase out based on age) but I am not about to buy the bullshit that it is the fault of old people taking from the young. It is about our government who took the money and left an IOU in its place.

  27. Where did I post my parents are the enemy? My mother is still alive, but my WWII vet father died long ago (He still got back MANY times what he paid in). It still doesn’t change the FACT people paid in little to nothing and only a fool would have believed they could do that and get back enough to retire on AND get free healthcare too. When SS was started, few black men lived past 50 and few white men past 59. Many Americans were not covered, including most women and nearly all black Americans. The head of the NAACP complained that FDR had managed to design a safety net with holes large enough to allow almost every “negro” to fall through. Veterans were not covered either. FDR never intended for it to be a real retirement system. As to who to blame, that would be everyone who ever voted this stuff in and voted for politicians who promised them these leech programs.

    My retirement income includes what the IRS calls “earned” income, and when I’m old enough for SS, they will take out in matching dollars, what that income is, meaning I will get nothing anyway because I actually took care of myself. Am I whining about it? No. The money I paid in went to my parents as far as I’m concerned, and EVERYONE should take care of their own families and not expect the government to rob some stranger instead.

    SS and all other social programs are unconstitutional. You may say “that is the system we have,” but some said the same thing about black slavery too. We had that for about 90 years after the Constitution was ratified. Today, we have tax slavery through social programs and have had it for 77 years. Since the country is broke, we will not have it much longer, no matter who is in power and no matter how people vote. With 78 million boomers (like me) retiring (except I’m retired on MY money and don’t need or want SS or Medicare), SS and other programs are not long for this world. There will soon be over 100 million on SS and with only 140 million workers now (fewer when the boomers retire), there is no way to tax the few taxpayers enough to keep the scheme going. Not blaming anyone, just posting facts.

    Have a good day.

    • Modern Survival

      Right here when you said,

      “In your podcast, you said something about the Social Security money being stolen and wasted, but it was actually handed out to people who paid in little to nothing.”

      You don’t get it do you? Who did this? It isn’t even really the politicians, there is a clue. Why can’t your mom live on say 5k a year in SSI very well? Who devalued the money?

      Stop buying into the bullshit.

  28. SirLordBaltimore

    Sorry, to hop in this a little late in the game….You’ve gotta wonder if in some way we are living through a mirror of the late 70′s-80′s on steroids.
    You know the original survivalist culture took off during the Carter years and what was going on with the deindustrializtion of the US economy. Not to mention that little OPEC thing. I’ve got old survival related mags from that era that were calling for a full blown economic depression to come to pass by 1980 mass starvation etc. etc.
    The can got kicked a little further down the road.
    Everyone my age now (mid 30-40 year olds) remember the 1980s as a golden era much like previous generations remember the 1950s.
    When I was still in high school I remember reading a book Bankruptcy 1995. This books main point was that federal debt levels would become unsustainable by 1995 and the US and in turn world economy would collapse.
    Well wouldn’t you know it that can got kicked again….
    I am under no impression that this tomfoolery can go on in perpetuity. It is only prudent to prepare for what surely are (understatement of the century) tough times ahead.
    One of the ways in which I am “prepping” is to try and enjoy things while times are relatively good. We live in an era of cheap transportation and abundant food. Who knows how long that will be the case.

  29. My mother lives well and her income is a lot more than $5,000. Also, I’m just about old enough to be your father and have accomplished more than a survival blog on the Net. How about a little respect?

    SS was NOT advertised by the FDR administration (or any other) as a total retirement plan. No one was SUPPOSED to be able to live on it. But in the 70s, when the WWII generation started retiring, there were reports about old people eating dog food, and both the payments and the SS tax skyrocketed. The children of the WWII generation (me and my generation) were paying in more SS and Medicare taxes in ONE DAY by the mid 70s than the WWII generation paid in in 35 YEARS. That’s NOT inflation; it’s jacking the taxes up and changing the purpose of SS. Until the 70s, EVERYONE but idiots knew you were not supposed to plan to retire on SS alone. There is NO WAY to call SS anything but intergenerational armed robbery. Again, there is no blaming anyone, it’s just fact.

    If there was anyone to blame, it would be the generation (the First World War generation) that voted FDR in over and over again and applauded his using the Constitution for toilet paper, and not just as far as the New Deal goes. My father was not old enough to vote (while he fought in the Pacific) until FDR was already dead, same for my mother. The New Deal was the beginning of the end of America. We are just now starting to pay for it in ways besides taxes, but you ain’t seen nothing yet.

    • Modern Survival

      Don, frankly screw off, you think all I have accomplished is a blog? I have founded and co founded multiple companies many still in business employing people, to the tune of perhaps 40 or more current jobs due to my efforts.

      I will help you since you can’t get there, the Federal Reserve devalued the currency.

  30. Good economics discussion. It’s hard to imagine this dragging out several more years, but I surely don’t know. Two thoughts/comments:

    Is it reasonable to say that the tipping point ccmes when China is unwilling or unable to buy our bonds at current rates? And there seems to be little agreement as to the real economic state of China. I also wonder why they wouldn’t just keep slowly loaning us money and gaining their own superpower without ever threatening military force: they can threaten economic armageddon by stopping bond purchases and/or dumping American currency. Cheaper control of the world than military might???

    Another comment: If I understood correctly, you suggested that the union health insurance policies will be up to the cadillac level (defined as $27,500) by the time the 40% tax kicks in. I would say that’s quite an underestimate. Our family plan provided largely by the company my husband works for increased to $24K this year (employer portion went from $15 to $19.5K, our portion went from about 3500 to 4500). I’m grateful that we have decent coverage and little worry about major medical expenses, but it’s definitely not Cadillac. We have some significant deductibles and more providers are now listed as “out of network” with Anthem. My submission for $500 orthotics was just denied (and they certainly won’t pay for cosmetic surgery!) I think the CBO just projected that the CHEAPEST family policy will be $20K next year.
    The Cadillac healthcare tax has inflation-adjustment in the taxable level, but as I understand it the government has the option of tying that to regular inflation rate, and is not obligated to use the medical cost inflation. So I think the tax starts to hit most private plans, not just a few.

    Of course, with costs skyrocketing this fast, I’m not sure this planned mandate is going to last until 2018. For example, I don’t see my husband’s company soaking up another $5K increase next year. And I’m not sure we will either. We are about 50 and have paid health insurance since we left our parents’ homes. But there may come a point where it makes no sense. It may become more prudent to save the cash. If a person underpays their withholding/estimated tax for a tax year, the IRS cannot come after you for a penalty. In such a case, it might be prudent to have prepared insurance applications to fax/email the moment someone in your family is sick or injured, and by law you are accepted. I’m not saying that’s a great plan, but I don’t believe a “catastrophic only” policy will be legal, and we can’t spend 50% of our incomes on healthcare.

    I’d like to believe this craziness will implode the insurance market and 3rd-party pay so quickly that both docs and patients will use cash and private clinics (such as at the Surgery Center of Oklahoma…. there’s a good interview for you BTW if you haven’t talked to them yet). More likely, though, it will be like our education system wherein you pay once through the government then pay again if you want to get good care for your family.

  31. My last post proved that you are simply wrong. You cannot say that SS tax going from the average person paying from ZERO to a few pennies a YEAR in the 30s and 40s to people like me paying over $10,000 a year just for SS, not including Medicare (there has been no cap on Medicare tax since 1994) and income tax by the 2,000s is due to inflation and the monster from “Heckle and Jeckle” Island. I can buy 100 acres of AG land (paper tree farm) in my state right now for $75,000 and in 1926 it sold for $40,000. If your claim was correct, that land should cost over $133 million today, and that’s comparing the Max SS tax of $30 a year to the max. SS tax of today, not the zero to pennies a year the average worker paid in the 30s and 40s. In this case, the “Fed” didn’t do it. The VOTERS who refuse to save for old age and take care of their own bills did. And the politicians were more than happy to destroy this country to buy votes from leeches and gain power. The game was changed in the 70s and all of a sudden an old age insurance (that’s what they called it) system that was designed to keep old widows from starving (men were not living long enough to collect a penny of it in the 30s), that is pay their grocery bill ONLY, suddenly became a full-fledged socialized retirement system, and the payments (now averaging $1400/month and some getting several thousand a month) skyrocked, and the tax had to skyrocket with it. The system is still broke even with sky-high taxes because it REALLY needs a tax rate of about 35% of everyone’s income (including low income people) to fully fund it. And that’s on top of all the other taxes. When the Clintons said the average American would someday be paying 84% of their income in taxes, they were telling the truth and that was before Obamacare. Keep in mind that today most Americans pay ZERO federal taxes! All of the burden is on those who make over $100,000 a year, so the lower 50% who now pay ZERO are facing a massive increase in taxes if SS and other social programs are to survive. There is not enough wealth owned by the “rich” to pay for it. In reality, there is not enough wealth in the US.

    All of this is the end result of the New Deal and Great Society. Economists are telling the American people that the real national debt is between $140 and $202 trillion and the entire worth of the US is only $75 trillion, I think people should take a look at what they are talking about and not follow someone on the Net who hands out advice on anything and everything with no showing of qualifications at all. I retired at the age of 51 on my money, but that doesn’t make me an investment expert. I can carry a 75 pound pack and a rifle all day for a week while sleeping on the ground every night (and I’m pushing 60), but that doesn’t make me a physical fitness expert.

  32. Ronnie in Iowa ~Veronica Deevers

    My leftist liberal daughter who lives in ILLINOIS and is a PUBLIC SCHOOL TEACHER asked me this: “Do you REALLY believe half of the crap you send to me?” . After a short conversation with her she said: “And what is it about the year 1913 that makes you think so much changed?”. OMG.

    O M G.

    Just how do you start with someone who is SO terribly in the dark that you wonder if you can even find a crumb to work with??? I did email episodes 538 & 539 to her. Hard telling if she’ll listen to them but I keep trying. She’s the type that won’t get it figured out until they’re stuffing her head in a guillotine. And then it’s too late. BTW….she’s 30 and thinks the union is simply wonderful, OweBombA is wonderful and that we should all turn in our guns. So Jack….or anyone else….what on God’s green earth would you do if this were your daughter?

    • I would say you probably pushing too hard with that kind of response. First of all I can tell something is wrong because you should remove leftist, liberal… she is your daughter first and foremost. Every kid pushes back on their parents. As the child they believe they are much smarter then their parents because their parents way is old fashioned. She is trying to prove herself. You as a parent can only slightly hint at things and find common ground that you both agree on. She has to put the puzzle together herself and hast to figure out what she believes is based on fallacies.

      If it was my daughter I would prepare to help her out if we fall on hard times. If she is not very prepared, you being able to support her, might show her that there is something to what you were telling her. I would first of all just take an interest in her life. Ask her about the kids in her class, ask her how she likes her school. The opportunities to open her mind will come, you can’t just ram emails into her inbox. You have to be a dad first, support your daughter, if you just push, you are going push her away and she will never be open. If a topic comes up, just ask questions, like why do you think this way, what makes you feel this way, what would you change, then offer a light suggestion of what if it was like this. “Such as she says my job as a teacher is guaranteed by the union, I don’t have to worry.” I would then say something like, well as a dad I just worry with all this online education and classrooms, that the classroom might move to the digital classroom and you will be competing with teachers from other states and around the world. Which makes me kind of curious, how is your school incorporating digital technologies into your classroom. — You just need to get her mind turning a bit. Always use I feel or this is how I think and ask how she feels.

      Maybe if talking about school shootings just ask how she feels about drugs with her students. Do they perform better or worse on these drugs. Do they just site their mindless or are they actively engaging. She has the real world experience. Does she feel big pharma is pushing these into classrooms?

      When you do talk about topics important to you, take it to a non-threatening conversation. Instead of talking guns I would talk about maybe taking a self defense class because as a dad you worry about her being safe. If guns come up, express it as I worry they will never be able to take the guns away from the criminals. Ask her how they will guarantee that. Express it as I enjoy shooting, it is a fun hobby for me. Ask her if she believes the Chicago ban on guns is working and what she would do differently.

      Instead of talking 1913, which is just a year in which bad laws are passed like any other. Does that year really matter anymore? What’s done is done. Ask her what her unions pension invests in, ask her if she is okay not knowing especially after 2008. Tell her you worry because it seems like other pension systems like Stockton, CA is broke and the huge fraud scandal that just hit IL’s system. If she says everything is great just leave it there, don’t push, you’ve already planted a seed. She might see an article like the one I read the other day, about the scandal with pensions and the downgrade of ILs debt, I wouldn’t send this to her, but it might sprout the seed if she sees it or if there is talk about it somewhere. http://www.chicagotribune.com/news/opinion/editorials/ct-edit-sec-20130313,0,3082543.story

      If she is pro-union and pro Obama, hers will not be the head in the guillotine. More likely her “contract” will be broken and she will learn the hard way.

    • Modern Survival

      Just ask her if she can explain how money is created and what happens when it is created. Don’t give her the answer and just stick with that one question, can you tell me exactly how every dollar is created and what it means when a dollar is created. When she finally gives up and can’t do it (it may take days, weeks, etc) ask her if she will please just listen to this

      http://www.youtube.com/watch?v=-HtqCsFpXw4

    • I’ve been listening to Harry Browne’s radio shows lately (the ‘Permanent Portfolio’ guy) and I think a lot of his thoughts on investing are applicable to the rest of life..

      - Nobody has any idea what will happen in the future. Everyone is just guessing. Some people, IN THE PAST, have guessed better, so people listen to them. But that doesn’t mean the guesses they make today will be right.
      - People like to look at the PAST and use it to explain where we are in the present, with the idea that this explanation will then allow them to forecast the future. But.. it doesn’t.

      I’m saying this because it doesn’t really matter HOW we got where we are.. and none of the ‘guessers’ (no matter how many listeners they have) know where we’re going or how long it will take to get there.

      The only things that are important is where WE are, where WE want to go, and what WE are going to do to get there. The rest is just noise.

      Its not within our control to change the past, nor does it predict the future. So lets stay in the present.

      Knowing that the FED is ‘evil’ will not feed your daughter if the grocery store shelves are empty. So maybe you’d be better off talking to her about gardening.. ;-) hey! it’s green! (and its the gateway drug)

  33. I’m a little skeptical about the natural gas energy and economic boom. They’ve limited oil production, nuclear and are squashing coal, which seems to be consistent with a Cloward-Piven crush the system approach (see also the Fabian Socialist motto “Dear love, couldst thou and I with fate conspire
    To grasp this sorry scheme of things entire,
    Would we not shatter it to bits, and then
    Remould it nearer to the heart’s desire! ” Why will natural gas receive the blessings of the oligarchs?

    • Modern Survival

      Everything you just said

      1. Opens the way for gas
      2. Isn’t even true, coal yes but US Oil production is at an all time high, the assclown has to appear to appease his greenie supporters you know
      3. Ignores how much of the boom will be based on exports of LNG, not so much domestic use. Gas isn’t like oil it isn’t priced the same in the wholesale market everywhere, it sells for a lot more in the East then in the West
      4. Tells me you need to turn off Glenn Beck once in a while

      Don’t get me wrong the long term plan is shattered to bits but Cloward-Piven seriously, they and their ilk are nothing but useful idiots to those really in control of the entire global financial system.

      Seriously US oil production is growing right now faster then anytime in history. You would never know that though right? I mean with everything you hear in the media I am talking out of my butt right? I mean I just made that up out of thin air everyone knows Obama is hard on oil and not letting us pump it, really?

      Hmmm

      http://www.alaskadispatch.com/article/us-domestic-oil-production-reaches-highest-level-20-years

      and um even during the last elections

      http://www.bizjournals.com/sanantonio/news/2012/12/19/us-sets-record-for-domestic-oil.html

      Oh perhaps this is an easier one to accept

      http://news.investors.com/ibd-editorials/022813-646276-obama-shuts-federal-land-oil-not-private.htm

      See despite Obama, ah yes I see.

      Oh then you know how we were never going to let the Keystone pipeline in and some wacko named Spirko said it was all BS just to shore up big Os base? Well here you go http://thehill.com/blogs/e2-wire/e2-wire/287157-house-foreign-affairs-panel-jumps-into-keystone-pipeline-fray it is just the beginning of a dog and pony show so Obamanation can have to yield to the evil republicans and the crowd on one side of the WWE arena can cheer while the other weeps for their injured champ and everyone is so dim as to believe it is all real instead of decent acting.

      There are two problems when it comes to politicians, most of their supporters believe everything they say and the second is most of their detractors do as well. The truth is they say what is best for them at the time.

      You know who really hates coal? Nat Gas and Oil producers, that’s who and if you start connecting dots, look at lobbyists the whole picture is a lot more clear then a Glenn Beck blackboard about two washed up socialists. One by the way who is long dead and the other who is 77 and likely more concerned with avoiding adult diapers then chaining the world as she dreamed about while on dope in the 60s.

      On your final question of “Why will natural gas receive the blessings of the oligarchs?” The answer is simple, it serves their interests. The global wealthy can’t afford for us to fall yet, it would bankrupt them all. They have new empires to build, they need us to get that done, they need at least one more loading up of the tables at the Casino US Royal. They want all the wealth from high rollers at the Wall Street Craps table to the pension funds of the old ladies playing nickle slots and bingo.

      Um and the other answer is doesn’t matter why it already has. Despite massive resistance LNG is being pumped out from under hundreds of suburban neighborhoods right now. Fracking is even supported by Hollywood efforts as “bad but the best we have”, it was recently worked into the plot line of “Last Man Standing”, Tim Alen’s new show and presented exactly that way.

      Beck is a good window into what is going on but frankly one window, there are a shit load of windows in this massive house and if you want to understand what is going on you have to look out of as many of them as you can find.

      • Thanks for the thoroughness of your response, including links. You obviously care about informing your audience. I will reread your reply and explore the links provided this evening. It’s very difficult today to discern what is true and what isn’t, and, as you said, these windows through the facade are extremely valuable. Thanks again.

  34. Ronnie in Iowa ~Veronica Deevers

    Adam thank you for your response.

    Yes she is my daughter. I asked her if she has a spare tire and a jack in her trunk. Well of course….is the answer. I ask then why it is that she finds it strange to have at least 3 mo of food, water and medical supplies tucked away for other types of emergencies. No answer on that one. Sadly, some simply have to learn the hard way. And yes, I would share what I have without the “I told you so” attitude.

    I told her that I do NOT want her to believe anything I send her. She was stunned. I explained that I want her to research it for herself and then if I am wrong to please bring it to my attention.

    Sadly, as for the school shootings, she truly believes that if America were to be disarmed that would all just go away.

    When she first started teaching she was a “I will save the world” kind of person. Then reality hit. Her first year was spent in a very low income junior high and she was one of the few white people in the school. Two 7th grade girls broke her wrist and dislocated her shoulder. She said that VERY few parents come to parent/teacher meetings and if they do show up they’re coked up and/or smell of alcohol. From there she went to a very high class all white high school where black people are detested. She had the kids write about their real life hero and one student’s hero is the head of the KKK. When she asked another teacher what to do about it, the response was:” NOTHING. YOU WILL SHUT UP AND JUST GRADE THE PAPER. We have a lot of KKK in the area here.” My daughter had NO idea they still existed. Another wake up call.

    As for the year 1913, I was stunned that a person with a masters degree knew NOTHING about this history. It is her country too. But she is far FAR from alone on that subject. She is merely one of the dumbed down who has a piece of paper from the dis-education system.

    The one common ground we have is her frustration at being a teacher who is not allowed to teach. The coddling era that Jack was talking about is what she is dealing with now. Everyone needs to be a winner…no losers allowed. If she grades a paper fairly and a parent complains that little Johnny was upset that he didn’t get an A, then she is reprimanded for it and forced to ‘re-grade’ the paper. BTW, she is an English teacher (journalism, composition, etc). She spoke of one student that should not have been allowed to pass her class but the principal made some threats that made her change her mind. How tragic.

    And you are most correct. Her head will not be in the guillotine. She is 30 and of able body. Plus she is already indoctrinated. You are right, she will be spared.

    I did send her this: http://youtu.be/tQvLn-4DaNQ Dr. Benjamin Carson’s speech at the National Day of Prayer. I hope it will bring shed some light….

    Again, my thanks.
    Ronnie

    • Thank you Ronnie, that provides a lot more insight than the first post. I took the first post as more bombarding her with article so she was shutting you out. It sounds like you have the right approach going, and I’m sure it’s being filed somewhere in her head.

      I know things I dismissed as a teenager from my dad, are coming back now with parenting my kids. I find myself telling them same things and they do the same things I did as a kid. Then I realized, I really did learn that from dad and it stuck with me. I do things in my own way but his core principles stuck. That gives me hope with them.

      I find it very interesting that she still holds some of those beliefs with all those personal experiences. Maybe she feels stuck in the system and acceptance is coping. I would think she had the shock events with all that to make her question; then again, we all wake up on some different event, where our mind says I just can’t accept this anymore. Maybe its when her kids get into school and get a “bad teacher”.

      No one in this country learns history in school, it’s all propaganda for some agenda. Unless you have an interest, you really don’t research things to uncover the truth. Yesterday, I learned about Claudette Colvin. All those black history month lessons in school and college history classes; no mention of her name. Then I drove under Rosa Parks Way last night (road in our city) on the way home from work and had a chuckle. Not to take anything away from Rosa, I mean she did do a courageous act, just others had blazed a trail for her and her story was selected because of image; therefore, we honor her and not the ones before her.

      A few weeks ago the “Pledge” came up at dinner with a new law Oregon is trying to pass. I quizzed my 8 yr old stepson (2nd grade) on its roots and what things like allegiance, republic, and indivisible mean. He didn’t know. So, I asked him why he would pledge to a flag a bunch of things he didn’t understand. Then we did a history lesson on the pledge. Probably going to get a lot of flack for that on this board. In my mind we were given the freedom to think and question things, and if we don’t do that, we really aren’t free. Pledging to uphold freedoms is pointless, especially to the republic which doesn’t, while forced to be in a classroom seems odd. Plus, it doesn’t seem to work because congress says the pledge then figures out ways to remove freedoms :) Anyway at the end of the lesson I told my stepson now that you know the origins and what the words are, it is your choice to say it and that he is no more or no less patriotic if he doesn’t. That’s the problem with “schooling” versus “education.” Teachers just say I am authority, memorize this stuff and repeat it because the text book says so.

      I do wish you luck in your journey and just keep at it. Again, as I learn a bit more it seems like you are on the right track and she will figure it out when she is ready.

  35. Ronnie in Iowa ~Veronica Deevers

    Thanks Jack and I will keep working on her. She is not only my daughter….she is a teacher of children of the future. She did call me one day and said they had a pretend election (prior to the recent election) in the high school she teaches at and that Ron Paul won! So there are some people who are awake in that area. She just isn’t one of them.

    I had even made it possible for her to PERSONALLY talk to Michael Badnarik and he was willing to give her as much time as needed. I offered to make it possible for her to attend one of his constitution classes since he was in her general area at the time. She refused to go. You can lead a leftist liberal to the fountain of knowledge, liberty and freedom but you can’t make them drink.

    Again my thanks,
    Ronnie

  36. Ronnie in Iowa ~Veronica Deevers

    Adam, you’re super! Always good to have somewhere like this to bounce things around.

    You may be correct in that she is like a dog on a chain that has simply accepted its doom. It may never know freedom and can only hope that a bowl of ‘something’ and some water will be plopped down in front of it each day so long as it doesn’t rock the boat.

    Deep down I know she is a very intelligent person. She just has some misguided ideas. She did make a comment to something I had posted on FB at one time stating she thought I would WANT democracy and I told her NOOOOOOOOOOOOO…I don’t. She was stunned. I asked THE question: tell me the difference between a republic and a democracy. She did not know. Slowly…..oh sooooooooooooooooooooo slowly, she is learning.

    The roots of evil can only grow if they are fed and the gov’t has been feeding hers with a lot of shit…er I mean fertilizer. I’ll keep up with the ‘permaculture’ techniques and will hope to create some new ground for her to stand on.

    You sound like a very good dad. Your (step)son is a very lucky young man.

    Ronnie