Episode-769- Listener Feedback on the Economy 10-24-11 — 39 Comments

  1. I have a few comments about the article on the document released today by an office of the Vatican. I should let everyone know I am a deacon in the Catholic Church, and spent four years of intensive study by the time I was ordained nearly 14 years ago. Part our preparation was to study the social justice teachings of the Church, so I am familiar with the language of the document released today. I have read the document, and am very disappointed with it. I would also caution those reading commentary in the MSM, as they rarely correctly understand what is being said, and tend to spin the communication for their own purposes (which is no surprise to us).

    I was most disappointed that the document did not mention anything about the crushing level of debt held by developed countries and people in general, and how we are heading toward the cliff and eventual ruin. Instead of ranting some more about the document, I’m including a link to an article published today that does a very good job of ranting about this document:

    Please don’t use my comments as a forum to discuss what you may like or dislike about the Catholic Church, as I don’t see how that would serve to help our community.

  2. The Vatican has always been against the possession of private property and for redistribution of wealth around the world. Doesn’t surprise me one little bit. Interesting times ahead.

    • I guess that’s why Pope John Paul II was so supportive of communism and socialism, right?

      Don’t mistake an emphasis on spiritual concerns over the material with endorsement of a redistribution program. They are two very different things.

  3. Okay, I just finished reading the actual Vatican document and NOT someone in the mainstream media’s analysis. They have it ALL wrong, like the do often when it comes to the Church. I suggest you read it for yourself and see how it fits with the teachings of Jesus and the Church. The Vatican has stood against communism and still stands against that.

  4. 1. Is that Vatican paper really calling specifically for a VAT? OR are they calling for a tax on what I call “money churning”? I have no problem with that part of it. Churning money creates no jobs or anything of value — except for those taking their cut off the top.

    2. Thanks for the Charles Schumer info. Already made my voice heard in his office on that little piece of insanity. For what good that will do 🙂

    People — you can’t just listen to these things and shake your head. DO SOMETHING. Even if its only a phone call or email. Complacency or not speaking up is implied consent. I write to the president every single week, CEOs of corporations that sell mostly imports, my state representatives. It feels like spitting into the wind at times, but I feel it’s our civic responsibility, especially when this selling off of America to the highest bidder continues.

    3. Every person listening to your podcast should take the time to read The Economic Collapse blog. Your podcast and that blog are among the first things I connect with every day (being unemployed…).

  5. Pritchard is way too optimistic in my opinion. Aside from what Jack already covered re: global wage normalization, the Bakken is often cited as energy nirvana & the basis for business as usual sailing along smoothly. A little research shows estimated discovered + not yet discovered extractable reserves at 24B barrels given the latest fracking technology. The US uses about 20M barrels/day, so that’s about a 3 1/4 year supply. Big whoop. Never mind the detail that fracking uses massive amounts of water & energy, produces pollution & toxins (levels are arguable, but they’re not zero), and is expensive. It will not be cheap to extract; for the exponential growth paradigm to continue requires not just oil, but cheap high net energy oil.

    • @metaforge, dang it you and all your pesky facts. LOL, can’t we just all stick our thumbs in our mouth and levitate the way bugs bunny did on tv back when cartoons didn’t suck. Or I know can’t we get one of them emodium p32 explosive space modulators that martin the martian had, that should power things for a decade or more.

      • Life’s a bitch, ain’t it? Your interview of Lund was really startling to me because I also am a physicist by training, and I had a similar path to what he did. Science is science, and fact is the hydrocarbon goo is not replacing itself at anywhere near the rate we are depleting it, so we are on borrowed time folks. The bit about the Star Trek future & dilithium crystals? Also spot on to what I used to think. Now? Very unlikely. You always say not to prepare for specific disasters, and peak oil is no doubt one of them, but it is one that we know has already happened and is only going to get worse. It’s like seeing a meteor coming right at Earth from earth from Pluto that’s probably going to hit – sure it’s low probability from the get go, but now we see it, and avoiding it has become what is the low probability. Does it mean TEOTWAWKI? I dunno… maybe? I plan for a low energy future and hope for the best. Mr. Pritchard is way out in left field to preach his energy euphoria nonsense.

  6. I’m a huge fan Jack and I have a lot of respect for you, but how can you be so sure of your predictions? I’m not saying your not right, it’s just that you seem so sure. When I was a kid I had read something about the end if the world or economic doom or something and I was talking to my grandmother about it. She said it was the same when she was a little girl. There was always someone saying the end was near. The way people talk about China today is the same way people talked about Japan in the 80’s. There were lots of books on how the US was in decline and how Japan would be the new economic super power. Look at Japan even before the tsunami. I’m also reminded of the guys who use to write books like “The Coming Wall Street Collapse Of 79” and then “Of 1980” and so on and so on, but it never happened. For all I know they may still be writing them. Anyway, I’m just asking. Maybe “Why I’m Sure” would make a good show topic.

    • @Warren,

      1. Because I have been dead on 100% right up till now, that has given me confidence.

      2. I can do math, I know 110 trillion is missing from the puzzle and there is no way to fix that with out a burn down. Simply because I can do math and understand what a trillion is, I know what the results must be.

      Lastly please realize I WANT TO BE WRONG, I PRAY THAT I AM WRONG, I make that prayer every night before I go to bed.

    • Warren, you don’t really say why you think Jack might be wrong. That would really be helpful so that we can help you explain why Jack’s predictions are most likely right – to break up those preconceptions that you have so that you can unlearn what was drilled into you. The fact is the country has been living on borrowed time and borrowed/printed money for over 40 years now. The bill is coming due. If we pay it, that will cause us pain, and the debt party is over. If we tell our creditors to go screw, that will cause us pain, and the debt party is over. Those are the only two choices. Either way, pain & the debt party being over is the consequence, and what Jack predicts is the result of that.

    • I should also add, and this is something Jack didn’t mention at least in this show, that money is a proxy for energy. And so if there’s a $110T hole in money, that’s a hole that can only be filled by future energy. Why? Because money is a proxy for energy. Every $1 you spend is to compensate someone else or something else for spending energy. This is the tie between the virtual and the physical – sort of like browsing the web is virtual and the physical is the wire & fiber backbone that actually sends the signals. Once the virtual (money) makes promises that the physical (energy) cannot provide, the game is over – and it is over very quickly. Ties in with my earlier post.

  7. The Catjolic Church does believe in private property right. Please google Rerum Novarum Written by Pope Leo XIII in 1891. Here are some of the sub headings: Private property gives workers hope…..Private property:A Natural right….Divine law protects property rights. Just to name a few. These beliefs are still a cornerstone of true Catholic Social thought. Unfortunately we are like the rest of society as we too have been over run by wacko socialist leftests. Difference is now we are onto them and they are on borrowed time.

    • @Carey, really then do tell me, why can’t priests get married, the real reason.

    • Wow, ok, that’s an entirely different subject and not the least bit related to the article in question. I would refer you the first commenter’s post (the deacon) where he has a link to a priest, Father Z. There you can search and find your answer in a much better explanation that I can give in a comment/posting forum. You might note that Father is interested in liberty, preparedness, and knows his stuff way better than I. I am a long time listener, just never felt like posting til now. Your question concerns a deep theological question that we can disagree upon. The vatican document is not theological, but economical and liberal leaning. It doesn’t represent the body of what the Church has said over time. Married priests versus unmarried has nothing to do with the current discussion any more than if the Episcopalians came out with a hair brained idea on economics and someone asked about their views on infant baptism. Can we just accept that this docuement is a liberal crazy collection ideas, end of story? Married priests, our view of the sacraments, our views on marriage, etc. are all theolgical in nature. In then end, no one forces someone to be a priest or nun. They go into it knowing what they are agreeing too. If they want to get married, they could belong to a different faith. Like the deacon, I ask that you not use this forum to address everything you don’t like ot understand about the Catholic church. I once was Presbyterian. I didn’t ask the Presbyterian church to change its beliefs to suit me. Most Christian denominations have a set of beliefs the members subscribe to. If you don’t agree, you leave. You go where you believe the truth is spoken. All I did was post a response to another post addressing the Church and private property rights. I gave a direct citation. I regret that I bothered to post. Seriously, I’m sad that my first interaction with you is one of an attack, one I didn’t ask for or want. Sounds like you already have a pre conceived answer for why you think priests can’t marry and by virtue of me posting, I am somehow responsible for answering such a question? If you truly want to know the Church’s rational for unmarried priesthood, then look at Catholic Answers website, or NewAdvent’s searchable website. Wholly unfair of you.

      • @Carey, I like Father Z but let me give you the actual answer to the question.

        Reality, in the middle ages the eldest son inherited the father’s land at his time of death, he could then keep it all and provide for the family or divide it up among his brothers. The key was nobles owned land and it was passed down.

        Priests and specifically bishops and up were nobles (why do you think there is a bishop on the chess board?) and owned land, over their lives they often acquired a LOT of land. Problem was the church lost control of said land if the eldest son choose not to be a priest (often the case). This was true for centuries and centuries after the death of Christ and well into the establishment of the modern Catholic Church.

        Eventually the church put a stop to the loss of these lands by coming up with the idea of chastity for priests and men of the cloth.

        So when you say, the church supports and has supported private property rights I just don’t fall in line with that view. The above is 100% factual, the right of chastity in the priesthood has absolutely nothing to do with Christ being or not being a chaste man, only with the desires of the Church to acquire wealth via the direct control and ownership of large amounts of land.

        Clearly that was a far different time but it is an accurate historical record of what happened and why. I again, grew up as a Catholic, I found a lot of beauty in the Church, I also learned many of my questions about the way of things led me to truths that most Catholics never know.

        • Yes, what you say is true regarding an impetus for the Church’s RETURN to the discipline of celibacy. The 2nd Laternan Council in 1139 restored the celibate priesthood partly because married priests were leaving Church property to their heirs. But there was also a general decline in morals and in following Church doctrine among the clergy that needed to be addresssed. Celibacy was the norm in the early Church. All of this is detailed quite explicitely in Michael Coren’s book Why Catholics are Right (pp. 37-38). It is quite a logical leap to infer that the Church’s discipline of celibacy is evidence of a stance against individual ownership of property. Again, read Rerum Novarum.

        • @Traditionalist Catholic,

          Personally I feel an organization that doesn’t respect the individual property rights of its own members isn’t likely to respect the property rights of others. Again as a man who was born and raised Catholic I respect the faith, I am also very aware of this and many other things the church did I consider abusive.

          It is also interesting that the stance is yea we want the land but we also blame marriage for a decline in morals. Really, that is a defense of the action?

  8. Hi Jack-your analysis regarding you dads starting pay I think at 14.50 way back when and that those same jobs pay that currently was excellent. Thanks for that. I had not thought about it that way and it really helped me to hear you describe it as such.

    Regarding Hank Williams Jr -just because you can say something does not mean you should say something. He used poor judgement and ESPN has every right to fire him. He should think before opening his mouth (we all probably should)

    • @Gary2, My belief based on your comments about Hank are you don’t even know what he said, because your conclusion doesn’t match what the man said. He didn’t say anything “stupid” and despite what the TV told you he did not again DID NOT call Obama Hitler, not even close.

      • My point was that because someone can say something does not mean someone should say something. The best comment on the whole Hank WIlliams was that he is a good example of what too much alcohol can do to a person.

        I have a general prepper question and I ask it genuinely.

        I hear folks advocate stocking up on guns/ammo etc in case things get real bad. as I see it there are way more people who will fairly easily overrun any compound as there are more people than you have ammo. They will then take from you what they want. Numbers are not on your side period. You loose! You can not kill everyone. You will kill/wound a few but you still loose. game over. All your stocking away stuff will be for the hoards to take when they kill the preppers. , Again you. can not win. simple math.

        It would seem to me that one should try to blend in more than a strict defend the castle.

        Am I looking at this the wrong way? Obviously prepping to some extent is a good thing and being prepared is key.

        • Fact is he didn’t say anything wrong, and the only reason people think he did is because the media flat out lied and claimed he did, and most people are too stupid to see things for themselves.

          As for the guns and ammo preps you are completely missing the psychology of the matter. Yes if a mob is single mindedly motivated to kill you, you have zero hope of defending a compound much less a house. Such is NEVER the case with riots. Never has been, I doubt it ever will be. Not likely to be the case even if there were roaming bands of looters. You’d pretty much have to be an American soldier in Mogadishu before you’ll see that type of determination. In LA during the Rodney King riots, I guarantee you there were more rioters than the Koreans had bullets, but take a wild guess what happened when the first rioters got their melons popped? The rioters went elsewhere. So yeah, I guess if things got to the point where a large mob got so desperate that they were ALL determined to take whatever you had or die trying, you might end up with the problem you are thinking of. Otherwise, when melons get popped on a first come first served basis, the mob goes elsewhere.

          Aside from all that, ammo supplies aren’t just for killing two legged varmint. A whole lot of four legged critters might as well be lunch boxes on legs if you have the ammo and the ability to put it on target. Ya think that might come in handy if food gets hard to come by?

        • Also, along the vein of “when times get tough or even if they don’t” having ammo for your guns, means you can hunt, practice and be prepared for two legged varmint during good times too. During the height of the housing economy, there were massive numbers of home invasion robberies of recent move ins. I’m willing to bet having guns, ammo, and the ability to use them effectively was a factor there and no regional or global disaster was needed.

      • PS-the truth is not as important as peoples perception of the truth. People believe he called Obama Hitler and he got canned. Sucks to be him!

  9. Hey Jack,
    Thanks for the show…as an overseas listener of yours, I thought I’d put in my five cents.
    1) I don’t know anyone who would welcome a world government/currency/tax, in my opinion most countries are getting more nationalistic and rearing against the so-called threat of globalization, traditionally by US corporations. I’m not sure, but I think if you asked most foreigners about a world government, they would associate it with America trying to interfere with them. In fact a lot of countries, a bit unfairly if you ask me, blame America for their current economic woes.
    2) Most foreigners who have visited America or lived there for a short time, think America is far from the land of free. I stopped travelling via America when they introduced the rule saying that every foreigner would have to get fingerprinted upon arrival, even if I was didn’t step out of transit. Part of the problem is that you are always afraid someone will sue you, if you say the wrong thing or someone through (generally) their own stupidity injures themselves. Think of all the disclaimers you have to give on this show that in other countries would be unnecessary. In fact a lot of the rules that affect my liberty, which countries I can safely travel to (as a person who could be mistaken for an American, ( English speaking white person), whether I have to take my shoes off at the airport, take liquids on the plane, etc, are the result of American actions.
    3) For the reasons above, not everyone wants to live in America…and you would have to be pretty brave as a foreigner to invest in the American housing market at the moment…wouldn’t you? Also, would you rather have broke immigrants come in to your country or those bringing half a million of much needed cash. Also, have look at the top twenty cities to live in the world, and American cities won’t feature in them. O.K, you don’t like cities, neither do I, but they do provide an indication of which countries the majority of people want to live in.
    Please understand me, I do like Americans that I have met, I really enjoy your podcast, but try looking at it like this. Think of how much of your time is spent on telling us about the stupidity of American laws and lawmakers, the financial institutions and the American sheeple, and then don’t counter that view with the patriotic pride from being a descendent of hard working immigrants and soldiers who did manage to build something great. That is how the majority of the world see America today. IMHO

  10. Jack,

    While I will certainly agree that you have a pretty darned good track record when it comes to seeing what is coming in the economy, I have to say that you have a grave misunderstanding of other social forces at play in society-at-large. The comments you made today regarding the Vatican’s recent document is again an example of those misunderstandings. At one point I actually felt as if I was listening to the reincarnation of Senator Joseph McCarthy calling out “socialists” hiding under every rock that has yet to be overturned. I’ll just lay out my argument below — and even if you don’t agree with it because it goes against your sensibilities, at least others might read it and have food for thought….

    1. The Roman Catholic Church, like all other major religions and religious institutions, is first a source of social cohesion through moral authority. Anything having to to with political power is secondary to that, because any political power that the Church has is gained through that moral authority. For evidence of what happens to the Church’s political authority in times where its moral authority is questioned, look no further than the Reformation.

    2. The Roman Catholic Church does NOT desire socialism. Any inquiry into the recent history of the Church, as well as the POLITICAL doctrines of socialism and communism, demonstrates quite clearly that the two are not compatible.

    3. The foundation of the Church’s moral authority is the teachings of Jesus as laid out in the gospels. Central to these teachings is an abandonment of the material in pursuit of the spiritual. This is quite different from a wealth redistribution program.

    4. Part of the moral viewpoint of the Church is the responsibility of people to share their surplus with those who are struggling. Again, this is not a redistributivist program, but rather one founded in the idea that people are living closer to the example of Jesus by doing so. From a purely historical/sociological perspective, this also helps to create community ties and social cohesion. Think of it in terms of the potlatch practiced by Native Americans — those who had a surplus gained standing in the community and created social capital by giving their surplus away. The more you gave away, the higher your standing in the society. Contrast that with the greed and selfishness that lay at the heart of the modern financial system.

    5. The moral view that the Catholic Church is taking here is actually quite close to that espoused by… Adam Smith. Yes, you read that right. Smith, while saying that a free market economy worked best in the economic/financial sphere, also was quite clear that people participating in that economy should act morally at all times. This part of Smith’s theory has been jettisoned by neoclassical economists, who have perverted this version of self-interest bound up in a community with others into a vision of pure selfishness.

    6. The tax on financial transactions is against “churning”, not the productive economy. Since churning is a means by which wealth has been consistently transferred UPWARDS from producers to rentiers and speculators, I fail to see how actions discouraging it can be considered bad in and of themselves. The perversion of those incentives to further the means of the moneychangers is a separate discussion that in no way takes away from the Church’s overall point.

  11. One more point regarding your jeremiad against the Catholic Church — the developed nations of the world, at least the US and Western Europe, did not become prosperous because they were “free”. They became prosperous because they were able to exploit geography and unrequited slave labor in order to amass vast fortunes of capital. It is generally agreed among historians that the large fortunes of the early republic were ALL connected with the slave trade, in one way or another. For example, although the Brown family of RI (think Brown University) didn’t personally own any slaves, the fortune they made as merchants was predicated upon the shipping of molasses and rum — which were made possible by the West Indies sugar plantations worked by slaves. Likewise, the capital that allowed England to embark upon the industrial revolution had been laid up by that same sugar trade. And if anyone thinks that the rise of the American textile industry wasn’t directly tied to the use of slave labor on Southern cotton plantations, then I have a bridge to sell them.

    I’m not saying that having personal freedom isn’t a good thing. I’m just saying that the view you’re presenting (our economic success is founded in our freedom) is an overly simplistic one that can lead to some very mistaken conclusions.

  12. First question: The authors of the book Aftershock advise people not to pre-pay or accelerate their fixed-rate mortgages, because, they say, you can easily pay off the mortgage with hyper-inflated post dollar collapse dollars. However, cost of living raises will not magically match the inflation rate. Even though my mortgage debt will be worth-less so will be my income, if I even have a job at all. Should I still put an emphasis on accelerating debt payments, in my case, mortgage and student loan debt? Or should we put more of an emphasis on creating currency crisis proof assets and investments?

    Second question: The authors of Aftershock say that with chaos in the financial sector and, after the chaos, so many foreclosures evictions could take several years. They strongly imply that this means you can stay in your house even if you loose your job and can no longer pay your mortgage. I was recently in California where I was shown an entire neighborhood that was repossessed by a bank and bulldozed to the ground because they owners could not pay and the banks couldn’t resell them or pay the property tax and maintenance costs. Because of this I tend to doubt that banks will be so lenient in the post-dollar-economy. What do you think?

    • @Ryan, I recommend the book more for the time line and what would happen than for the advice they give, while most advice is pretty good you know where I come down on debt. Your instincts on the reality are right, their advice is great if your net worth is a few million bucks, to a joe sixpack it may cost them their home when they need it most. Though if you could pay say 3x the mortgage and decided instead to pay the base and put the 2/3 into savings I would not find fault with that choice in many ways it is a better decision.

      On the second one, you nailed it, don’t bet on living in your home for 9 months without paying it can happen but it won’t often especially going forward, that scam is no well known and yep banks will bulldoze the house before letting you hang out in it in an extreme circumstance.

  13. @Metsforge

    I’m not saying Jack is wrong. He’s just scarring the crap out of me and I’m trying to figure out how much weight to put to his prediction. If he is 100% right, most of us probably need to make drastic changes in our lives even if we are already preppers. That’s a big deal.

    • I guess I don’t see the changes as drastic because it is what I for largely religious reasons grew up doing, and for reasons that negatively impact me even in good times, I kick my self when I get away from that type of living. The whole bit about if times get tough or even if they don’t resonates for a reason. You don’t need to make drastic changes just in case he is right, you should want to anyways because if you are living life like the TV tells you to (in the words of Sam Walden) you can do more with less.

      Then if the doom predictions are right, you are as ready as anybody effectively could be anyway. A lot of “preppers” are people with a ruck sack stuffed with crap they have no idea how to use, a couple buckets of wheat, a $10k gun and ammo collection and a bad attitude in general. Yes, they have a lot of changes to make if the doom prediction pans out. For how often I hear them rant publicly about just robbing people to get by, I’m not optimistic about their survival. Thankfully, that is not “modern survivalist” as Jack calls it or a responsible human being as I call it.