The Demise of America July 2014

[Cinjin]

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Cinjin,

It is not often that I regret teaching myself something but 2 things stand out. The first was reading Mark's Gospel - that depressed the hell out of me (on the basis of there being 2.1 billion people who believe in this shit) and the second being economics and particularly macro-economic theory.

All the macro-economic theories currently in use are fatally flawed in terms of managing a global economy. They were all designed on the basis of a national economy and simply assumed to work on a broader scale. They don't. I could show you why but it would bore the pants off you and frankly, I wish I didn't know.

In the meantime there are a couple of reasons why the crash won't actually be that dramatic (or possible far more dramatic but that is highly unlikely).

1. The nature of the global economy means that the US debt has been transferred into foreign ownership. America goes down and it takes huge proportions of the wealth of other countries with it, most notably China and the Middle East. When it comes to the crunch - they will negotiate, big time. They'd start at 50c on the $ and work down from there. I think it would settle at about 30c.

2. Once the debt has been managed the deficit can be addressed. The shock of the crash should ensure the population play ball enough to put taxes up and cut back on state services. Right now your government is running about an 8% deficit.

Until a few years ago I would have said no country has ever gotten that size of deficit into a surplus in less than 5 years. Greece, however, did it and started from 14%. Its possible, painful but possible.

Finally, although I don't want to belabour the point. The US is the global policeman. My guess - you're gonna start demanding payment for services rendered.

The combination of the size of your economy (too big to fail) and that military of yours means that actually, under it all, no real cause for panic just yet. Of course, you need political leaders who can deal with the situation but other than that, no biggie.

The alternative to the above is a global collapse and a reset. In some ways this is the more desirable option but it will be resisted and the above will be adopted as a fudge.

Now here's the final funny thing. When Greece collapsed I told anyone who would listen that Greece was the minor bird in the mine. If the bird is cheeping there's gas - everyone's in danger. DO SOMETHING!

So everyone did - they blamed the bird.

Gotta laugh.

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