The Ground Gives Way - Eric Janszen

[we_are_toast]

Re: The Ground Gives Way - Eric Janszen

I leave you with this from his Capitalism, Socialism and Democracy, and a view of the future that strikes us as unfortunately prophetic.

Schumpeter's theory is that the success of capitalism will lead to a form of corporatism and a fostering of values hostile to capitalism, especially among intellectuals. The intellectual and social climate needed to allow entrepreneurship to thrive will not exist in advanced capitalism; it will be replaced by socialism in some form. There will not be a revolution, but merely a trend in parliaments to elect social democratic parties of one stripe or another. He argued that capitalism's collapse from within will come about as democratic majorities vote for the creation of a welfare state and place restrictions upon entrepreneurship that will burden and destroy the capitalist structure. Schumpeter emphasizes throughout this book that he is analyzing trends, not engaging in political advocacy. In his vision, the intellectual class will play an important role in capitalism's demise. The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for which they are not directly responsible and able to stand up for the interests of strata to which they themselves do not belong. - Wikipedia

I am a bit concerned with this paragraph. This implication that the end of capitalism and the beginning of socialism may come about due to the "intellectuals", could very easily add fuel to a fire that we may not want to be stoking right now.

One could argue that there has been an anti-intellectual trend in this country since 1980 when "intellectualism" was related to "elitism" in many political campaigns. The culmination of this trend resulted in the past 8 years which led to a purging of governmental expertise for political and religious loyalists. Factual data and reasoning skills were not only ignored, but discouraged, contributing vastly to the enormous problems we currently face. The more repressive form of government we currently have, due to the latest wave against "intellectuals" is more totalitarian than socialistic.

Even here on iTulip there are some who reject reasonable argument and factual data in favor of political rants and mysticism.

EJ
For these readers I will continue to share the manufactured rumors, grand fantasies, desperate wishes, and gnawing fears that pass for investment advice in these peculiar times under the title “Playing in Traffic” with my usual warning that all short term market price movement predictions should be regarded with grave suspicion, particularly those with charts attached with lines on them showing support levels, double tops, head and shoulders formations, and other assorted mumbo jumbo bullshit.

FRED:
This clearly expressed explanation of Astrology, PHI, Fibonacci and other fraudulent magical thinking based "systems" of market prediction is the final word on the topic. All future references to these will be linked here and the threads closed. We have serious issues to discuss in 2009. This is a waste of iTulip community brain power. I'm closing this thread.

History has shown that in times of great economic stress, the anti-intellectual/elitist fervor can lead to very unpleasant and violent consequences. No matter how you may try to clearly define "intellectual" the anti-intellectual crowd will redefine it to meet their own emotional needs.

I would hope that the class warfare speech will be cautiously approached. The last thing I want to see right now is Joe the Plumber, with a pitchfork in one hand and a bible in the other, down at the entrance of the local university calling for the heads of the "intellectual" socialists.

[Rajiv]

Re: The Ground Gives Way - Eric Janszen

Methinks that Fred is whistling past the graveyard!

[Southernguy]

Re: The Ground Gives Way - Eric Janszen

LW: I agree, there´s surely tons of gold to be sold at the right price.
With your other assertion, about oil, I also agree, buy there is a "little" practical problem, how do you store oil?
How safe are oil based ETF´s, noting that there´s always some kind of counterparty risk in futures transactions?
I bought some GSG, then sold it, making one of my very rare trading profits, but I hesitate to commit a very large amount to those instruments.
Comments are welcome.

[Sharky]

Re: The Ground Gives Way - Eric Janszen

Look, inflation 10% real i-rates per year x 5 years will NOT turn North America into Argentina.

What makes you think it will average only 10%?

As of Nov 2008, the adjusted monetary base was growing at 75% year over year. I'm not a doom-and-gloomer, but the odds of inflation only being 10% per year after that kind of input would seem to be pretty small -- and it seems like the worst spikes are probably yet to come.

[FRED]

Re: The Ground Gives Way - Eric Janszen

I am a bit annoyed with the "doom and goom" and 02.

Look, inflation 10% real i-rates per year x 5 years will NOT turn North America into Argentina.

It will be bad no doubt, but what about the 70s, the 30s? No civil unrest then: so please lets keep things grounded here.

Agree. The US will weather the storm, better than others. No ox drawn Mercedes. No digging for cans of tuna under the rubble.

[LargoWinch]

Re: The Ground Gives Way - Eric Janszen

Forget about getting your precious metals in a timely fashion-

"High Activity Market Alert
The precious metals industry is experiencing a substantial surge in activity which may cause delays. We apologize for this inconvenience and are working hard to get you your package as soon as possible. From the date of your confirmed order to the time you receive it can currently take as long as 3 to 4 weeks."

https://online.kitco.com/bullion/completelist.html

pwcmba, there is TONS of gold waiting to be sold to you at the right price, make no mistakes about it.

In my book, crude oil is alot more attractive now given that one ounce of gold buys you roughly 24 barrels of crude oil.

It is time to remember that gold is not the only currency or thing going up in nominal value during inflation.

[LargoWinch]

Re: The Ground Gives Way - Eric Janszen

I am a bit annoyed with the "doom and goom" and 02.

Look, inflation 10% real i-rates per year x 5 years will NOT turn North America into Argentina.

It will be bad no doubt, but what about the 70s, the 30s? No civil unrest then: so please lets keep things grounded here.

[Slimprofits]

Re: The Ground Gives Way - Eric Janszen

Forget about getting your precious metals in a timely fashion-

"High Activity Market Alert
The precious metals industry is experiencing a substantial surge in activity which may cause delays. We apologize for this inconvenience and are working hard to get you your package as soon as possible. From the date of your confirmed order to the time you receive it can currently take as long as 3 to 4 weeks."

https://online.kitco.com/bullion/completelist.html

It depends where you are. I'm in a mostly rural, sparsely populated county in California and the one coin shop has been been stocked up with US and Canadian minted gold since the beginning of December and he's selling at a lower premium than Apmex.com for example. Not to many buyers around here, but lots of and lots of people are unloading their jewelry.

[pwcmba]

Re: The Ground Gives Way - Eric Janszen

Forget about getting your precious metals in a timely fashion-

"High Activity Market Alert
The precious metals industry is experiencing a substantial surge in activity which may cause delays. We apologize for this inconvenience and are working hard to get you your package as soon as possible. From the date of your confirmed order to the time you receive it can currently take as long as 3 to 4 weeks."

https://online.kitco.com/bullion/completelist.html

[BadJuju]

Re: The Ground Gives Way - Eric Janszen

pretty, pretty bad:

http://www.youtube.com/watch?v=Y6yq5...eature=related

You could also have a more positive outlook about it. The level of wealth destruction that is sure to ensue will do a lot to remove conspicuous consumption, which is bleeding the world of its resources. Live frugally, live happily.

[vanvaley1]

Re: The Ground Gives Way - Eric Janszen

How bad are things going to get? Have you watched the Detroit Lions or St. Louis Rams play football? One a more serious note, http://jessescrossroadscafe.blogspot.com/
has an article and video that seems to infer that we should be alert as things could get ugly. The article is "Weekend Viewing:The White House Coup of 1933- BBC4". Perhaps a hint at an ominous future if we're not vigilant?

[BadJuju]

Re: The Ground Gives Way - Eric Janszen

You must simply be prepared for what is to come. I am building a stockpile of food.

[audrey_girl]

Re: The Ground Gives Way - Eric Janszen

Just HOW BAD are things going to get?
Mike

pretty, pretty bad:

http://www.youtube.com/watch?v=Y6yq5...eature=related

[Mega]

Re: The Ground Gives Way - Eric Janszen

Just HOW BAD are things going to get?
Mike

[vinoveri]

Re: The Ground Gives Way - Eric Janszen

The Ground Gives Way

Words heard from Henry Paulson July 2008 compelled us to note That dreaded phrase: ''The system is fundamentally sound''. Our observation is that every time in history during a financial crisis that a Treasury Secretary or other government authority utters that phrase it means that the system is fundamentally unsound -- head for the hills. Continuing our historical perspective, this week's business and economic news recall an excerpt that we first ran in 1999, from the brilliant economist Joseph A. Schumpeter's (1883 - 1950) classic book, Business Cycles, published in 1939. His theories on the relationship among firms, credit creation, and money in booms and busts are unmatched -- and prescient. First, today's headlines.

• Circuit City to close 567 remaining US stores
• ConocoPhillips to Take $34 Billion Charges, Cut Staff
• Intel's Net Plunges 90% as Demand Dries Up
• California delaying tax refunds and welfare payments amid cash crisis
• Nearly 40K job cuts announced as weakness persists
• Deflation concerns grow as consumer prices shrink
• Shipping rates hit zero as trade sinks
• Trichet Vision Unravels as Italy, Spain Debt Shunned
• Baltic Protests Erupt as EU’s Worst Economies Shake
• German Bond Auction Fails to Attract Enough Demand

May an analysis of our current crisis eight years from now read like this?

....
...
...
Are we are seeing data "swamped by the torrents of a process of readjustment corresponding in magnitude to the extent" of the FIRE Economy of the preceding 30 years? Was the FIRE Economy a form of corporatism, much as Schumpeter forecast? I leave you with this from his Capitalism, Socialism and Democracy, and a view of the future that strikes us as unfortunately prophetic.

Schumpeter's theory is that the success of capitalism will lead to a form of corporatism and a fostering of values hostile to capitalism, especially among intellectuals. The intellectual and social climate needed to allow entrepreneurship to thrive will not exist in advanced capitalism; it will be replaced by socialism in some form. There will not be a revolution, but merely a trend in parliaments to elect social democratic parties of one stripe or another. He argued that capitalism's collapse from within will come about as democratic majorities vote for the creation of a welfare state and place restrictions upon entrepreneurship that will burden and destroy the capitalist structure. Schumpeter emphasizes throughout this book that he is analyzing trends, not engaging in political advocacy. In his vision, the intellectual class will play an important role in capitalism's demise. The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for which they are not directly responsible and able to stand up for the interests of strata to which they themselves do not belong. - Wikipedia

What groups are representative of Intellectuals of today?

A good part, probably a majority of the Academics especially in the social sciences, no? University Profess and Admin are very powerful forces when they choose to be. Expert opinion by peer reviewed organization is relied on by the public and the political establishment, and perhaps well it should be ... well if it doesn't blatant violate common sense AND the purveyors of the knowledge and wisdom are not incentived by power or wealth.