Massive Economic Disaster Seems Possible

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Massive Economic Disaster Seems Possible

Postby ninakat » Sat Jul 26, 2008 1:09 pm

Massive Economic Disaster Seems Possible -- Will Survivalists Get the Last Laugh?
By Scott Thill, AlterNet. Posted July 26, 2008.

    With multiple crises on the horizon, survivalist views don't seem as marginal as they did before.
They used to be paranoid preparation nuts who built bomb shelters for a place to duck and cover during nuclear dustups with communist heathens, but their tangled roots go back to the Great Depression for a reason. If you want to get sociological about it, survivalism started out as a response to economic catastrophe. And now, with a cratering stock market, a housing meltdown that has devalued everything in sight, and skyrocketing prices for food, gas and pretty much everything else, survivalists are preparing for -- and are prepared for -- the rerun. In fact, they may be the only people in America feeling good about the prospects of a major crash.

And the interesting thing about the once-fringe movement at this moment in history is that survivalism has now gone green -- at least in theory.

From peak oil and food crises all the way to catastrophic payback from that bitch Mother Earth, there are more reasons to hide than ever. Conventional society as we know it is already undergoing some disastrous transformations. Ask anyone ducking fires in California, floods in the Midwest or bullets in Baghdad. Maybe it didn't make sense to run for the hills, stockpile water and food, grow your own vegetables and drugs, or unplug from consumerism back when America's budget surplus still existed, its armies weren't burning up all the nation's revenue and its infrastructure wasn't being outsourced to a globalized work force.

But those days are gone, daddy, gone.

What's coming up is weirder. Author, social critic and overall hilarious dude James Kunstler tackled that weirdness, otherwise known as an incoming post-oil dystopia, in his recent novel, World Made by Hand, which has since become one of a handful of survivalist classics. And as Kunstler sees it, whether you are talking about gun nuts or green pioneers, at least you are talking.

"At least they're aware that we've entered the early innings of what could easily become a very disruptive period of our history," the Clusterfuck Nation columnist explains. "Most of them are responding constructively rather than just defensively. They're much more interested in gardening and animal husbandry than firearms."

Not that the gun nuts have gone away. Their ranks have just diversified.

"The gun nuts have been on the scene longer than the peak oil argument has been in play," he adds. "They were initially preoccupied with Big Government and its accompanying narrative fantasy of fascist oppression, which is why they adopted a fascist tone themselves. But peak-oil survivalists are different from the Ruby Ridge generation. They don't think that a bolt-hole in the woods is a very promising strategy. We have no idea at this point what the level of social cohesion or disorder may be, but if the rural areas, especially the agricultural centers, become too lawless for farming, then we'll be in pretty severe trouble because there will be nothing for us to eat."

That's not on the to-do list of author and SurvivalBlog owner James Rawles, who has been getting asked more and more questions by a mainstream press finally waking to the consequences of disaster capitalism, climate crisis and the hyperreal dream of bottomless consumption. He has fielded questions from the New York Times, and he has taken an online beating from conscientious pubs like Grist, but he hasn't gone Hollywood. The times, which are a-changin', have caught up to him.

"There is greater interest in preparedness these days because the fragility of our economy, lengthening chains of supply and the complexity of the technological infrastructure have become apparent to a broader cross section of the populace," Rawles wrote to me via e-mail (but only after asking how many unique monthly visitors AlterNet commanded). "All parties concerned may not realize it, but the left-of-center greens calling for local economies and encouraging farmers markets have a tremendous amount in common with John Birchers decrying globalist bankers and gun owners complaining about their constitutional rights. At the core, for all of them, is the recognition that big, entrenched, centralized power structures are not the answer. They are, in fact, the problem."

Fair enough. But that broad brush fails to recognize the complexities of the very community it is purporting to try to establish. Indeed, difference is what survivalists seem to be running from, whether it is historically the difference between blacks and whites, secularists and true believers, or simply the haves and have-nots. It is that latter crowd that the survivalists seem most worried about. Their separation from society at large is arguably a retreat from community rather than a striving toward it.

"I'd say that survivalism is indeed a celebration of community," Rawles asserts. "It is the embodiment of America's traditional can-do spirit of self-reliance that settled the frontier."

But that's also a generalization, especially when one considers that the word "settled" is a coded reduction for a "near-genocidal wipeout of the frontier's native populations," most if not all of whom were perfecting a survivalist ethic by maximizing their skill sets and living in symbiosis with the land that provided them what they needed in food, tools and medicine. In fact, those settlements would have been hard-pressed to exist without what Rawles earlier described as a "centralized power structure," known as the expansionist United States government and its military, paving the road forward. Each self-reliant mythology carries within it grains of complicity in the community at large, which is a fancy way of saying there's nowhere to run, baby, nowhere to hide.

This is especially true today in our hyperreal, hyperconsuming 21st century, where survivalism has become more of a gadget fantasy than an earnest grasp for community.

"It seems a natural human impulse that we are hard-wired to follow as circumstances require," Kunstler says, "although it is constrained by social and cultural conditioning. To some degree, in our consumer culture, survivalism is related to the gear fetishism you see in popular magazines that purport to be about sporting adventures, but are really about acquiring snazzy equipment. America in 2008 has become a cartoon culture of Hollywood violence that promotes grandiose power fantasies of hyper-individualism and vigilante justice. Add guns and economic hardship, and spice it up with ethnic grievances, and the recipe is not very appetizing."

This future cultural, environmental and geopolitical miasma is where the survivalist and the mainstream converge in agreement. Both camps, pardon the pun, are convinced that we're screwed down the road.

"The next Great Depression will be a tremendous leveler," Rawles prophesies. "If anything, life in the 22nd century will more closely resemble the 19th century than the 20th century. Sadly, the 21st century will probably be remembered as the time of the Great Die-Off."

"I don't consider it a total wipeout," Kunstler counters. "It's a very big change, but people are resilient and resourceful. Look, imagine if you were a person who had survived the Second World War in Europe, and you were walking around Berlin in the spring of 1946, a year after the end of the war. A once-magnificent city has been reduced to rubble. Your culture is lying in ashes. Yet, people pick up and rebuild."

That is, if they're sticking together. If they're scattered and fending for themselves, and taking armed retreat defense tips from SurvivalBlog, that makes rebuilding a bit more complicated. Which, in the end, is where survivalism is most ambiguous. Is it a growing population of forward-looking realists who are smartly preparing for the die-off brought on by climate crisis and economic collapse, so they can pick up themselves and their people, and rebuild with that "can-do" spirit, as Rawles calls it? Or are they simply gadget-fascinated fundamentalists afraid of change and challenge, so afraid that they'd rather hide and hoard than join the fight?

The jury is still out. But, according to Rawles, it will soon have its diversity mirrored by survivalism's changing demographic.

"I think that in the next couple of decades," he explains, "we will witness the formation of some remarkable intentional communities that will feature some unlikely bedfellows: anarchists and Ayn Rand readers, Mennonites and gun enthusiasts, Luddites and techno-geeks, fundamentalist Christians and Gaia worshippers, tree huggers and horse wranglers. We welcome them all. Because the threats are clearly manifold: peak oil, derivatives meltdowns, pandemics, food shortages, market collapses, terrorism, state-sponsored global war and more. In a situation this precarious, I believe that it is remarkably naive to think that mere geographical isolation will be sufficient to shelter communities from the predation of evildoers."
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Postby ninakat » Sat Jul 26, 2008 1:19 pm

The Catalyst For Financial Disaster
Posted On: Friday, July 25, 2008, 9:56:00 PM EST
Author: Jim Sinclair

Dear Friends,

A serious event occurred today. This event was the very public international recognition of more off balance sheet so called “assets” revealed as having little, if any, value.

This event is arguably the most serious financial upset ever. If you have not protected yourself, it is getting very late - maybe too late.

Your best hope is that this event is so complex that the herd of self anointed experts has no clue what that vehicle is, how large it is and therefore the profound meaning it has.

Gold, serious junior gold shares (the only seriously underpriced and therefore real value in equities) and non-dollar short term federal currency instruments are your sanctuary. You better get there, and get there FAST!

The meaning of this is not only are Freddie and Fannie’s troubles much costlier than realized, but now there is an entirely new definition of market-less financial entities with off balance sheet assets that undermine primarily the US and now international banking systems. Conduit mortgage OTC derivatives will have to be marked down now that the sun is shining on them.

The U.S. mortgage industry transformed itself in a way that has opened dangerous SIV sub prime real estate conduits to global capital markets.

A conduit loan is priced by swaps and swap spreads, thereby becoming a package of various OTC derivatives generally derived from a formula that would make Einstein look like a kindergarten mathematician.

By turning mortgages into securities, lenders created vast distances between homeowners and their mortgage holders, who can be anywhere in the world such as Australia.

US banks have written down $450 billion in bad housing loans. The revelation from NAB means that they will now certainly need to take provisions to $1,000 billion. Write-downs of $1,300 billion and perhaps even more are in the cards.

That guarantees the USDX at .6200 and more likely at .5200.

That guarantees gold to reach at least $1650 much sooner than I anticipated.

This strongly suggests that my estimate of $1650 is significantly below the price of gold coming soon.

This opens the probability that a modernized and revitalized Federal Reserve Gold certificate ratio tied to the M3 will evolve into the monetary system.

The greatest economic crime ever committed is OTC derivatives. Those that proffered these will have killed more people than most wars.

This is it and it is NOW!

Respectfully yours,
Jim Sinclair
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Postby pepsified thinker » Sun Jul 27, 2008 9:15 am

Two questions--the second because I'm feeling devil's advocate-ishly skeptical at the moment.

FIRST QUESTION: Anyone know about the book Famine and Survival in America by Howard J. Ruff?

I saw it in a $1/book bin and picked it up before realizing its copyright date is 1974.

It gives practical advice about food storage--based on scientific-sounding nutritional information: which nutrients are necessary and which foods provide such and how those nutrients break-down, or don't from one food to another. Is such info from that era still sound advice?

He also outlines why he sees (er, make that 'saw'?) such information as necessary: looming break-down of the economic system, with the Fed as a key factor.

That's as much as I saw from a quick skim.

If the copyright date was 2004, he'd have more standing with me on the second point.

Which brings me to my second, question: Ruff wasn't predicting the current crisis, even though he may have had the focus on the Fed right, he was saying, 'stock-up now'. His 'end is nigh' message being past it's expiration date makes me wonder about the current predictions of doom.

While there's no denying things are, truly, f*cked--BearSterns, Indymac, WaMu, etc. being very real markers, along with the hundreds of thousands (that is the right ballpark, isn't it?) of home foreclosures, how is this crisis different from past scares and crises?

With a federal bail-out (which sucked an obscene amount of tax dollars into it's maw), the Savings and Loan crisis was turned into a still-horrible-but-not-nationally-catastrophic 'event'. I don't mean to minimize the real suffering of those who lost life-savings and such in then, or excuse the higher-ups (like Neal Bush) who skated when they led their institutions to insolvency, but nationally, it didn't have a significant effect on people's daily life (as I recall).

Granted, this crisis is still unfolding, but what about it so far shows it to be more than of the level of the S&L crisis, and what further markers should we watch for as it unfolds that will confirm it as a catastrophy; a '100 year' flood, as opposed to a 20 or 30 year flood?

I don't mean this as a challenge to all, here, who are generously sharing insights and so on, about the current economic melt-down--just trying to understand it better; I'm easily confused by all the levels of institutions and indicators and so on.

[On edit: saw this on Ruff--http://en.wikipedia.org/wiki/Howard_J._Ruff , seems to give basic facts about him. Interesting stuff, too. ]
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Postby ninakat » Sun Jul 27, 2008 2:38 pm

pepsified thinker wrote:While there's no denying things are, truly, f*cked--BearSterns, Indymac, WaMu, etc. being very real markers, along with the hundreds of thousands (that is the right ballpark, isn't it?) of home foreclosures, how is this crisis different from past scares and crises?


The home foreclosures will likely be in the millions.

According to a report issued last month by the Center for Responsible Lending, 1-in-5 sub-prime loans made in past two years will end in foreclosure. That's about 2.2 million borrowers who are likely to lose their homes.

link


What's different this time is that there are a number of factors converging at the same time: peak oil (supply not keeping up with demand), environmental degradation, economic turmoil, species extinction, climate change. Some have said it's the perfect storm.

And just because we've had "false alarms" in the past, is no reason to believe this isn't real now. And "now" can be anywhere from one month to a few years since nobody really knows exactly how this is going to play out.

But there's no denying that the elements of collapse are in play now, in a much more overt way than in previous "scares." For example, the Y2K scare didn't have nearly the number of real world elements in play -- it just required computer programming to avert disaster.

The main point to remember is that modern economic growth is predicated on cheap energy. Those days are gone, forever. People who speak of "free energy" and technological solutions are gambling with their lives because the odds are way against a new fix coming along in time. The U.S. should have been working on becoming "energy independent" during the last 3 decades, but instead we squandered that last opportunity.

Those who make predictions about the timing of all this shouldn't necessarily be discredited simply because they were wrong about when things would happen. The fundamentals are in place for collapse on several fronts, and people need to prepare as best they can and try to avoid be deterred by the lure of the mainstream's denial, understandable as it is.
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Postby 2012 Countdown » Sun Jul 27, 2008 6:01 pm

pepsified thinker wrote:Two questions--the second because I'm feeling devil's advocate-ishly skeptical at the moment.

FIRST QUESTION: Anyone know about the book Famine and Survival in America by Howard J. Ruff?


This guy's name takes me back to childhood. I remember him having a info-mercial special running called Ruff House (I recall). Reason I sort of remember is because my parents bought some gold (what little they could afford), and as I had some grass cutting money saved up, I too with all my savings got like an ounce of gold. It was about $350 +/- at the time (mid 70's-ish). We held it for maybe 5 years before we sold for about the same price -maybe a little more. It wasn't about trying to profit for us though, but about protecting what little we had. I wanted to see if i remembered the infomercial title correctly, and saw this on Wiki, fwiw-


istorians of modern survivalism cite Ruff's 1974 book Famine and Survival in America as influential in the development of that movement. The book was published in the wake of the 1973 oil crisis and predicted massive famine within a year, encouraging readers to store food in preparation. Howard Ruff later repudiated much of that book. He has kept it out of print and claims to have purchased the undistributed copies and destroyed them.
Ruff gained a sizable mainstream audience for a while during the late 1970s until about 1981, because those who had been taking his investment advice and buying precious metals saw large capital gains during that period. The New York Times labeled Howard Ruff "The Prophet of Doom" after his book How to Prosper During the Coming Bad Years reached the number #1 seller in 1979. His popularity fell off after the peak in the gold and silver speculative bubble in 1980.

http://en.wikipedia.org/wiki/Howard_J._Ruff
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Postby Nordic » Mon Jul 28, 2008 2:55 am

July 23 (Bloomberg) -- Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000.

Megie still couldn't sell it. ``There's oversupply,'' he said. The home sold in 2005 for $110,000.


http://www.bloomberg.com/apps/news?pid=20601109&refer=exclusive&sid=aMz0dl3IdwjU

Let that sink in: A house that sold for $110,000 in 2005 now cannot be sold for $5,000.

What's bizarre to me is the other day I looked at an Open House for a townhouse near me, here in Santa Monica, CA, and a 2 bedroom towhnhouse, nothing special, was listed at $1.2 million.

Just fucking insane.

Methinks things haven't caught up with us here in Santa Monica. Either that or the economy here is strong enough ( i.e. enough Rich People) that it won't.

Either way, considering our country literally CREATES MONEY by CREATING DEBT means that Bad Debt = Bad Money.

There's a lot of Bad Money that's been created in the last eight years.
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Postby wintler2 » Mon Jul 28, 2008 6:01 am

Somebody said ‘the future is already here, its just not evenly distributed yet’. If theres still plenty of cashed-up fools near you, gouge (overcharge) them!

The weak link I’m watching is goods transport, if alot of owner-drivers go broke and nobody jumps into their place our just-in-time food system may be just too late. And its only in last few weeks that i've thought such a collapse possible in coming year, mostly due to the rate at which central banks are shovelling cash to banks & other corporations that should've been liquidated years ago. "those whom the gods would destroy..".
"Wintler2, you are a disgusting example of a human being, the worst kind in existence on God's Earth. This is not just my personal judgement.." BenD

Research question: are all god botherers authoritarians?
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Postby chiggerbit » Mon Jul 28, 2008 8:08 am

I'm listening to ABC's economic expert right now, and she's saying that things are so bad that she's pretty sure we've reached the bottom now and things will start to look up. Heh, some logic.
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