What are the ramifications of a totally Financially Busted USA??

[truedelphi]

Those of you who are familiar with my husband's publishing venture perhaps have received his "Seth" predictions, which in December 2007 forecast the fall of the US banking system.

We are now receiving information that by the Summer if not Spring of 2009, the USA will simply be dead broke.

What will that mean? Obviously, no more disability checks, MediCare or Social Security. Veteran Hospitals may have to rely solely on state funds.
(Not an easy thing to do, for as I type this, 23 states are already facing their own financial insolvency.)

But would there be an upside? For example, for years, California cities have been told to toe the line with respect to allowing the DEA to come in and to take over Medical Marijuana clinics. The Feds' big threat was that if local jurisdiction didn't roll over for the "Federales", then there would be no money offered to the state for highways, schools, etc.

The entire federal policy of insisting on the enforcement of obsolete drug laws has allowed for the corruption of city and county officials through the taint of the re-distribution of the asset monies seized from drug cases. These monies are always referred to as "discretionary funds." (This is happening all across the country, not just in CA.) California prisons are full to capacity in part due to marijuana criminals. In turn, this has strengthened the role of the prison guard union, which for decades has held more sway over the CA governor's office than any other single entity. We thus are forced to build more prisons than schools!

But perhaps once the Federal Government has no money, state autonomy will come into play. In California, this means that perhaps the backwater post of Humboldt County, which currently illegally produces one of the largest cash crops in the world, will now be able to go above board with its cash crop. We can free the marijuana criminals, and lay off the guards. We can become a more agricultural society. And perhaps more prosperous than before.

Or we could be headed into a dark decade of street violence and gangs. As it might not be possible to have a police force if there are no paychecks for the police.

What are your speculations along these lines?

[seemslikeadream]

1. You probably know how I feel

:hi:

Two of the best minds on the planet, Nicholas Taleb and Benoit Mandelbrot told NPR this week that this is the toughest period in America's history not since the Depression, but since the American Revolutionary War.

since the American Revolutionary War.

http://www-tc.pbs.org/newshour/rss/media/2008/10/21/20081021_solman.mp3



http://www.urbansurvival.com/


Calamitous Web Bot Predictions
http://www.youtube.com/watch?v=Sdef1yNz2ms


http://video.google.com/videoplay?docid=3261134972282866184&ei=FpUDSfHCJo_o-AGzzaQH&q=web+bots&hl=en

[seemslikeadream]

2. The business first flat earthers licking their wounds

http://www.youtube.com/watch?v=rvWokFcD22E


Until The Day Is Done

The battle's been lost, the war is not won
An addled republic, a bitter refund
The business first flat earthers licking their wounds
The verdict is dire, the country's in ruins

Providence blinked, facing the son
Where are we left to carry on
Until the day is done
Until the day is done

As we've written our stories to entertain
These notions of glory and bull market gain
The teleprompt flutters, the power surge brings
An easyspeak message falls into routine

Providence blinked, facing the son
Where are we left to carry on
Until the day is done

Until the day is done

A voice whispers "Son,
The blessed vision comes."
What have I done
What have I done

So hold tight your babies and your guns
Forgive us our trespasses, father and son

Providence blinked, facing the son
Where are we left to carry on
Until the day is done
Until the day is done
Until the day is done
Until the day is done
Until the day is done
Until the day is done

[truedelphi]

3. I am sad to say I had never heard of these two before your post

I am right now heading off to read the links you listed, and to visit my buddy the "google"

:toast:

[kurt_cagle]

14. Taleb and Mandelbrot

Mandelbrot is a giant in the mathematics field, the creator of Fractal Geometry and one of the key academics in Chaos Theory. That Taleb (who has become very highly respected in the economic field) has him as a mentor says volumes right there.

The podcast is disturbing, especially coming from these two.

[RainDog]

29. thank you for posting the link to the pbs podcast!!!!

I asked for help finding this the other day after I had done various searches - even at pbs.

I suppose my pov at this point is optimistic. If the merde is going to hit the fan, we at least have quite a few Americans who have developed a philosophy of communitarianism, which will help, hopefully, since what happens at a local level will be where all people find the means to survive (no doubt some will be involved in larger systems, but with all the issues we face, I think local is where it's at.)

[Delphinus]

45. I had never heard the word, communitarianism,

so I went and found out what it means. Interesting - thank you for posting this so I could learn something new.

[Jed Dilligan]

48. "Communitarianism" means "quality of life laws" to me

Something I don't support.

[illuminaughty]

43. I was studying web bot predictions on Rigorous Intuition

I think that's where it was. Interesting stuff indeed, but really fuckin' frightening.

[Quantess]

47. Who is that woman? Naomi Klein?

[ihavenobias]

4. K & R. I don't have time to weigh in today, but thank you...

for posting an interesting and thoughtful topic.

[LanternWaste]

5. A long, slow decline into mediocrity....

A long, slow decline into mediocrity; very much along the lines of what had happened to Great Britain and France after their own stints as superpowers. I doubt there would be anything lie what had happened to the Austrian Empire, or the Soviets as we've never been lucky enough to absorb more than one or two languages into our monolithic culture

A doubt there will be anything so dramatic as "The Fall of Rome" (which itself was simply a long, slow decline also). Every superpower's had its days of glory, and each one has fallen into a twilight existence. No reason for me to think that history will be any kinder, or any meaner to U.S. culture.

[diamidue]

35. It won't just be the USA

This thing may be global. Especially with the IMF saying that this economic downturn will add at least 20 million more people to the unemployed (world wide) by the end of next year.

Still, we have a long way to go to reach depression era unemployment levels in the USA.

It could happen very quickly, though. Money could dry up. Banks could close. Shipping come to a halt. I hope it IS a long, slow decline (if it has to be a decline) because it will allow us to adjust to things easier than a sudden breakdown as in Iceland, Argentina, etc.

[Joanne98]

6. The drug war is a huge waste of money.

[Uncle Joe]

20. I second that, not to mention, wasted lives, broken families, a major source of

police and governmental corruption, and cash cow for organized crime.

[Cleita]

7. I guess everybody needs to be ready to adopt an old person or a

disabled one because the streets will be overrun with them.

[truedelphi]

8. If 55 is old, I am readily available for adoption

:-)

I look like fifty, and feel like eighty. But perhaps I will regenerate should Obama take the WH??

As the worst financial crisis hits, I am grateful to be living out in the country.
Community will be more important than ever.

[seemslikeadream]

10. I'm looking to be adopted also

I'm well manered and keep to myself ;)

[truedelphi]

27. Damn! It sounds like you'll be chosen long before me!!

I'm rude, crude and drool!! AND that is on a good day...

[lligrd]

9. How Will I Be Able To Grow Marijuana If I Have No Money

to make my house payment?

[LaPera]

11. No cake after dinner.

[Ezlivin]

12. I will be homeless and on the street

I'm a 100% disabled veteran who relies upon the VA hospital system and a disability pension from the government. If the government goes bankrupt I'll immediately lose my house and end up on the street. While I'm as healthy as a man in a wheelchair can be, it would be extremely tough. And I can't simply go to a friend, neighbor or relative's house: None of them are wheelchair accessible!

There will be a huge spike in suicides if the government goes broke.

[truedelphi]

23. If you own your home and can find someone to live with you

Who has a job and can contribute rent, you might be okay. Especially if the retner is sympatico to your lifestyle and your way of living.

But for the person who doesn't own their home, and is in your shoes, it could well be the end of the line.

[TankLV]

13. Never gonna happen...

you worry too much...

the "USA" has enough to cover everything...the wealth of the country is sound.

Comparatively, we've been in much worse shape during the Depression and after WWII and we came back strong and paid off our debts just fine.

Historically, you're proposition is baseless...

[truedelphi]

25. What you have to look at is not just what "wealth" they are telling us we have

Yes they keep telling us that the wealth is there.

And to reassure us of that, the Powers that Be just added into the limits on the amounts of bank deposits that the FDIC will insure. Those limits are now at $ 250,000 per account.

But since the FDIC has to now siphon off the money from either the US TREASURY or the Federal Reserve (And those two have become almost one and the same, in a deeply symbiotic relationship over the last few weeks) should any additional institutions go belly up, I don't find that pledge to be re-assuring.

Unemployment stands at 9.9 per cent in many places in the country. But I wager it is more like 15% - with many people simply having given up on working. And now we are seeing another segment of the economy going down, so those unemployment numbers will go up. I am referring to the layoffs due to the stock market crash, most pertinent in Chicago, New York and a few other places. But since some of the day trader crowd took a hit as well (they were perhaps expecting the fallout to not come until the third week in October and it came early) the financial trading fallout hits everywhere in the USA where people were trading via their home computers.

Twenty three states in the USA are concerned about their solvency. That situation, of states being insolvent, took several years to occur when the last Great Depression happened - but since so much Federal Money has been diverted to the two wars we are eternally waging and to Homeland Security - state budgets' are already been in decline. Here in California, the June newspapers were full of stories about teachers and librarians that would not be coming back to their jobs in the fall.

The fact of the matter is, what we re facing financially is NOT the sub prime crisis. But the larger crisis of the derivatives related to the SIV's that were traded and the Credit Default Swaps that were insuring those.

Some of these financial instruments were leveraged over thirty-five times a piece. If either Obama or McCain were truly cognizant of the problem, they would have demanded a full accounting before flooding the banking system with money -especially given that the same crooks and liars that saw to the original failures are still in place.

That 770 billion of the BailOut that we taxpayers now have to pay to help the billionaires out - that could well just be the first installment payment on a derivative loss that is 500 to 999 TRILLION dollars in scope. A crisis global in scope and truly beyond the ability of our nation's thirteen trillion dollar yearly economy to ever ever bailout in full.

[soothsayer]

15. we'll default on our debts to the world, pull our jobs back into the US

and have melamine_free food.

[dailykoff]

16. Municipal utilities for sale for a song is one guess.

Privatization here we come, just like in the third world. K/R

[cap]

17. I have an optimistic scenario: Obama sells bonds and rallies the country

we buy our own government bonds to shore up our retirement and we rally on a volunteer basis to shore up the country. We reinvent government.

[Demeter]

18. Although Any Number of Tawdry Little Secrets, and Some Monstrous Big Ones

have been exposed by recent events, there is still so much unknown that prediction is guesswork, not projection of tendencies already observed.

I think there will be a bloodbath, a la Revolution de France. The oppressed will rise up and relieve the Oppressors of their ill-gotten power and wealth.

The US may close its borders to multinational corporations and some real regulation may result for any within its borders. The US will keep its nose out of other country's business.

I see no hope for those of the GOP persuasion. They will be without a game plan, power, and resources. They will be at the mercy of their victims, who will most likely treat them much better than they deserve, much better than they ever treated anyone not like them. They are already afraid, afraid that they will be punished. What they should fear is the crumbling of all their fantasy life.

[PurgedVoter]

19. K&R As long as our leadership is neocon based we are doomed.

Currently the mechanic that broke everything in your car has just been handed your credit card.
Oddly enough it was already known by 1990 that a stock market crash in 2008 was close to inevitable. At the time however, it was also known that recovery would be swift and would assure reasonable prosperity for the general populace, but not Wall Street.

The crash would be caused by the baby boom hitting retirement age and pulling money out of stocks to purchase food. This crash would have, if deregulation had not made us all bubble dependent, broken all the bubbles and rewarded the solid companies with cash flow as goods were purchased out of retirement investment funds. The retirees would not have as bright a retirement, but the market would have been made solid and reinforced.
Since 1990 however manufacturing has been shipped overseas, unions have been hit hard, deregulation has allowed companies based on pure speculation to purchase solid companies who have been honest and reliable.

Deregulation is of course a lying term. Letting companies that lend money decide how much money they have so that they can lend whatever they decide they want to lend is not deregulation. It is instead super regulation allowing a company to in effect print their own money, as long as people put stock in the currency effectively being printed. This means our country's currency is being undermined by independent companies that have created their own currency and mismanaged their affairs to the point that it is clear that they are printing funny money.

Now that the neocons have had their way, not just Wall Street is at risk. The bubble has expanded well beyond the boundary of speculation. The value of the dollar is not just being threatened by the loss of speculative value, the value of the dollar is being threatened by virtual counterfeit money.

Somehow, without taxes on that money, without actual community benefit from that money and without any responsible management of that money, we are as a nation liable for the debts caused by that money not actually existing. As far as I can tell the only ones who benefit from this are the management of the speculative corporations and the politicians who have gotten a share of this money from from the speculators. When people below this level do this sort of thing, it is called embezzlement.

As long as we have embezzlers and embezzler enablers controlling our nation, we cannot help but become less prosperous.

If we lose the embezzlers, the Enron's, the Monsanto's, and the Health Management Companies that suck all extra wealth away, then even from nothing, prosperity is I think assured. As long as we have 'deregulators' deciding that beef cannot be inspected because that would hurt business, we are doomed.

[Canuckistanian]

21. Maybe the IMF and the World Bank will swoop in at the last minute

But then again, they may not exist in a year or two.

You're on your own, it seems.

[truedelphi]

22. IMF and the World Bank -- those two only offer loans at really oppressive

Spiked up loan rate amounts with the people of the nation having to watch their currency devalued and/or their resources gobbled up. And they certainly have no worries ever about the environment.

[HamdenRice]

36. The IMF and World Bank offer loans at lower than market rates, not higher

The problem isn't the rates, it's the conditions, or "conditionality" of the loans from the IMF, which often involve devaluation and privatization.

Also, the IMF and World Bank are completely different institutions. We seem to forget that economist Joseph Stiglitz who is a hero to progressives was chief economist of the World Bank. In his famous book about that he does not harshly criticize the World Bank. Mostly he criticizes the more orthodox IMF and blames the WB for conditioning its development loans to poor countries on their adherence to IMF conditions.

[truedelphi]

42. When I make enough money, I am gonna put a bid in

For your brain.

Not that I will make much money in this economy.

But still, keep up the good posts, Hamden.

[sendero]

24. It's not likely to work like that..

... (no SS, no govt pay, etc)

We will devalue the currency by printing dollars. It will be almost as bad, but not as bad as your "mad max" scenario.

[truedelphi]

26. I am relying on those who are more hopeful than me to keep me cheered up.

It's a big job for you, sendero, but someone has to keep me more optimistic.

[bertman]

28. Even though I do support legalizing most drugs and doing away with the DEA and War on Drugs,

I hope beyond hope that your husband is wrong about the total collapse of the U.S. banking system.

The gain of some degree of sanity in how we treat drugs and drug users would be only a small consolation given the enormous impact of many millions more Americans out of work, our infrastructure crippled, and our government paralyzed. The horrendous ramifications to the elderly and infirm would be a national nightmare.

Also, remember that entities like the Nazi party usually rise from such terrible circumstances such as those you have described.

[RainDog]

30. I think the DEA will lose in CA.

There are too many people who oppose their actions.

Not only that, but marijuana growers have already offered money to help CA with its financial crisis. If times get that bad, they will be welcomed into the mainstream economy, imo.

[bertman]

37. RainDog, I don't know what you mean by the "DEA will lose in CA."

By my count, they've already lost big time. But they are still receiving hundreds of millions of dollars to fund their efforts, not to mention the police-military-fascist mentality that they inspire.

Is there some kind of a contest going on in California that I am not aware of.

[truedelphi]

41. I cannot speak for Raindog's thoughts, but I know I have been inspired by

Situations wherein the DEA shows up to take down the Santa Cruz Medical Marijuana center, and the local activists show up at that street, join hands, and prevent the DEA from getting to the center.

[PatSeg]

31. I've been predicting this sort of financial downfall

for a couple of years now, though the ultimate consequences have varied.

Right now I'm just going to focus on the election, as I don't want to get depressed again. I'll get back to it later! Maybe we can set up some communes!

[earth mom]

32. The North American Union is the plan. They want the U.S. crippled & broken to implement their plan.

Looks like we are almost there. :puke:

[lelgt60]

33. uh...have you noticed the US Dollar is now the strongest currency...

Except maybe for the Yen. That certainly doesn't imply the rest of the world thinks the US will be dead broke.

[truedelphi]

40. All it implies is that most nations have been rocked by the Financial Tsunami rather hard

Themselves. We've not only let the derivatives' failure bring down our EEK-onomy, we have allowed it to take down everyone else's as well.

From a monetary discussion on another blog:

NEVER in history has this happened before.

As of Oct. 23, Non-Borrowed US Reserves and US Bank Reserves equal nearly the entire monetary base.

The Federal Reserve now needs a reserve for the reserves. Hyperinflation, here we come (prior to total collapse.)

10/23 Bank Reserves 328,597 MILLION; Monetary Base 1,143,873 MILLION; Non-Borrowed Reserves (-362,550) MILLION; TOTAL Borrowed 691,147 MILLION

Treasury bills have been written (ie printed up) and more monies from the 770 Billion Bailout funds arriving into the top banks and it is all just sitting there in the banks. With the banks insisting on tightening the credit ratings of most citizens, that money will continue to sit. Except that those with A+ ratings, ie the Upper One Percent, will be allowed to do, as usal, whatever they want.
(YOu say that you are not part of the upper one percent but you have a Triple A rating? Guess again. They are downwardly revising most people's credit ratings as I type.)

These interactions are possibly creating hyper inflation. So any guess when the dollar will come tumbling down in value and the cost of everything going insanely upwards?

Any guesses??

[Cha]

34. I hope it's not true..I'm depending

on Social Security in 2 years to retire to Kauai.

But, what it is what it is and we shall see won't we.

[yodoobo]

38. Put some faith in Obama. He won't allow that to happen

If for McCain somehow steals the election, then what you describe you very likely.

We'll start to see reversals of many of these negative trends by mid December - even before Obama is sworn in as he prepares his transition team and expectations through the nation begin to rise (creating a positive feedback loop)

Its going to be ok.

[truedelphi]

39. The resources are already gone. The stock market is already dying.

The pension funds are losing 20 to 50 %. For people who were going to retire in the next ten years, that is bad news - it could well take that long to recover the pension funds standing. It is even worse for those who already have retired. Working at McDonalds when you are in your early seventies and trying to live on that salary is going to be a catastrophe.

It has nothing to do with Obama - other than if he should not have it stolen out from under him, he will be blamed for the 900 trillion dollars that the global economy is in the hole.

[tendtoagree]

44. Crime would rise

crime is typically correlated to financial hardship. It's natural, unfortunately.

[Hubert Flottz]

46. When your government and it's "Leaders" act like we live in the

Confederate States Of America, like the neoCons have acted...it takes a wheelbarrow full of money to buy a piece of bread, like it did when the last "Confederate Cause" died. Trust is extinct thanks to deregulated ENRON Economics.

It's time now, to "point fingers." I'm pointing my middle one, like I have since 1980!