Economist Richard Duncan: Civilization May Not Survive 'Death Spiral'
http://moneymorning.com/ob/economist...-death-spiral/
Read the rest of the article at the linked page.Richard Duncan, formerly of the World Bank and chief economist at Blackhorse Asset Mgmt., says America's $16 trillion federal debt has escalated into a "death spiral, "as he told CNBC.
And it could result in a depression so severe that he doesn't "think our civilization could surviveit."
And Duncan is not alone in warning that the U.S. economy may go into a "death spiral."
Since the recession, noted economists including Laurence Kotlikoff, a former member of President Reagan's Council of Economic Advisers, have come to similar conclusions.
Kotlikoff estimates the true fiscal gap is $211 trillion when unfunded entitlements like Social Security and Medicare are included.
However, while the debt crisis numbers are well known to most Americans, the economy hasn't suffered a major correction for almost 4 years.
So the questions remain: Is the threat of collapse for real? And if so, when?
A team of scientists, economists, and geopolitical analysts believes they have proof that the threat is indeed real - and the danger imminent.
One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:
"We found an identical pattern in our debt, total credit market, and money supply that guarantees they're going to fail. This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.
"And what's really disturbing about these findings is that the pattern isn't limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well."
According to Martenson: "These systems could all implode at the same time. Food, water, energy, money. Everything."
A little mid-week economic doomer porn for you.
Marc Faber has been fairly upbeat as of late so when he sees someone trying to outdo him well doom sh*t is gonna fly keenly pursued by a continent sized swarm of black flies.
Oh and Richard Duncan is promoting a new book and Chris Martenson is currently enrolling folk in his fiscal doomer courses.
This article is as vague as anything fvcking piece of "we're all gonna die" article out there.
What is predicted "the big event" anyways? I'll just assume that it's gonna be super stagflation, where you have a high unemployment rate and hyperinflation. If that's the problem, than indeed it might lead to civil unrest and a total collapse of the economy. One thing that tends to cause stagflation is a lack of ressources that raises costs, raises prizes, creates unemployment and all.
They do have a point.Originally Posted by Mr Gently Benevolent
Marc Faber has been fairly upbeat as of late so when he sees someone trying to outdo him well doom sh*t is gonna fly keenly pursued by a continent sized swarm of black flies.
Oh and Richard Duncan is promoting a new book and Chris Martenson is currently enrolling folk in his fiscal doomer courses.
Exponential growth in a finite world.
Old Ross Perot told the electorate in 1992 that the US debt was the biggest issue facing the country, he got 19% of the vote and lost.
1992 US national debt: 4 trillion dollars
2012 US national debt: 15.8 trillion dollars
1992 price of gold: $337 / oz
2012 price of gold: $1,656 / oz (as of Aug. 22)
1992 price of gasoline in USA: $1.14 / gallon (comes out to $1.86 in 2012 dollars)
2012 price of gas in USA: $3.79
So yeah we have a very very serious problem with the national debt. Ross Perot said he could have us out of it in 5 years with his plan back in 1992. Too bad that we didn't tighten our belts back then.
It appears if you believe this, that the radicals may have won already.
Exponentials dont go on forever my friend, and thats simple fact.
Realistically speaking, I can see the US going the way of Latin America. Our inflation is going to skyrocket, infrastructure is going to crumble, and maybe, just maybe, foundations of democracy will be threatened by our own "Presidante", because poor people will elect anybody. It's going to get ugly, gentlemen. If we're lucky, the government will remain stable.
But I'm optimistic at the same time because when the US is knocked off the Economic world throne, we'll probably start revisiting the basics; agriculture, mining, and manufacturing; the stuff that made our country great in the first place. We'll probably be answering to Chinese, Brazilian, or even Russian investors, but the US will recover to something decent.
Except if we go full frontal recycling and renewal energy.
By Latin America I assume that you mean the 1980s, when they had annual hyperinflation rates of up to 20 000 percent. IMHO unless the whole government, from the President to the finance minister, to congress, to the Federal Reserve fvcks up royally, that isn't gonna happen. The only real way to create hyperinflation is by constantly printing money, which will royally devaluate it and cause prices to rise. The US government isn't that dumb. High inflation rates, on the other hand, can be a more scary thing to deal with, especially if stagflation arrives. On the other hand, I think that the US, and most other Western countries, are fairly well protected against a long-lasting dictatorship. You got people like Congress and the Senate who, despite their general annoyance and reputation of stalling everything. I'm fairly confidant that any President trying to pull a Julius Caesar and declaring himself "dictator for life" or whatever will quickly be removed. Incompetence, on the other hand, can be something more worrying.
That's gonna be hard, because many, if not most Americans can't to work in those fields. The US is at an economic stage where it's main production supplies are high tech/heavy machinery, and hence most people tend to work in those latter fields. Agriculture and mining and stuff did make the US the US, but that was 236 years ago, even more considering that much of the foundations were from the Brits, and technology has evolved. What was state-of-the-art then wasn't anymore. Today, most whose economies depend on exporting natural ressources tend to be the poorer, weaker countries.
Maybe it is the time for the US to step down. Funnily, the center of economical activity and world might always tended to shift from East to West. From China to the Greeks and Egyptians to Rome to France to the UK to the US. It seems natural that it turns back to Asia again, and it's already starting.
Its true too.
Its like the whole, remember history so you can learn from others mistakes has been forgotten.
Unfortunately, they may see hyperinflation at the best way to kick the can down the road. There wont be many other ways to cover debts and entitlements.
Lets see....
Radical tax increases or reform. Nope
Radical budget cuts and a balanced budget . Nope
Radical cuts to entitlement programs. Nope
Radical increases in Bond sales ? (can the market handle that?, let alone the rest of the world continuously funding the US lifestyle ? )
Money printing.
IMO will be a mixture of the last two. Until the interest payments or unsustainable Bond rates swamp the system. Then its good old printing.
At an accelerated pace.
You left out one option.
War - to crank the economy up, total war.
Sweet fvck all. War is very, very, very expensive. Total war is even more expensive. Just think about it: you need to invest heavily in the arms industry to build a huge amount of weapons. And you'll to invest in the human ressources: soldiers, training and everything. And all this "investment" won't generate a single penny in return. After WW2, most major players were quite bankrupt. Germany was, the UK continued rationning for quite a while. The US was running huge debts too. They managed to catch up due to a better economy due to better understandings in how economics worked, mainly through the works of John Maynard Keynes. The war wasn't the direct factor that led to the "glorious thirties".
...............We already spent that money!!!!!!
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