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Economic Apocalypse! Lube Up!

THURSDAY JULY 3 2008 6:00 AM

Submitted by FearTheReaper. Edited By erin_broadley.

TAGS: Housing Bubble, Credit Bubble, Inflation, Economy

The American economy is about to come to a grinding halt. You are totally fucked if you buy food, gas or anything. The U.S. economy is not just slowing down, but crashing, switching from strong positive growth to negative growth. This shit ain�t going to be pretty.

Obviously, housing prices are plummeting. Homes are sitting unsold and vacant in every neighborhood, as the grass turns brown and the plants die. Pools are turning into birth stations for mosquitoes. Many people are just walking away from their mortgages because their home is worth far less than what they owe. Thankfully, our government is bailing out the companies who made all the shady deals. It�s socialism for the rich! Yay!

You want to know how bad the housing market is....

Two for one houses! Oh, my God! We're fucking screwed!

Meanwhile, inflation is here and it�s a bit of an asshole. Prices on everyday products are going through the roof. Gas and milk are up to over $4 dollars a gallon. Just walking down the aisle at my local grocery story, I see product after product up around 25%. And the containers are smaller. It�s less food for more money. That�s how inflation works. But I can lose weight, so it�s pretty sweet!

The difference between this recession and past recessions is we are at a point where there is nothing left to squeeze. We�ve been experiencing inflation for years. No, not the economist bullshit technical term for inflation, but the kind you live through. Rising prices of non-traded goods, like insurance and health care, have been kicking the shit out of most Americans since the early '80s. And dollar-priced traded goods, like energy, for which we don�t have a substitute, have also been steadily rising for 10 years. Now we can expect cheap products, like the ones China sells to Wal-Mart, to shoot through the roof as the China yuan appreciates to avert domestic inflation. Suck it, America.

Now people are selling their gold jewelry, heirlooms and coins to get by.

A tough economy across much of the country is pitting memories against much-needed money. Rita Wallace, 50, has collected coins for 30 years, a hobby she inherited from her grandfather. Selling the coins as scrap gold, destined for melting, was never her intention.

Sounds fun. At the same time, there is a credit crunch. It is now harder to get loans and credit cards, because the banks fucked up and gave loans to a bunch of idiots who shouldn�t have gotten them. So, household access to credit is declining. People use credit to get through the hard times, but they are maxed out and the hard times aren�t even here yet. Seriously, they are not even here yet.

Just as Americans grow more reliant on credit cards to help pay monthly bills, they�re being hit with a one-two punch: Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores.

Those facing this predicament might not even know it until they apply for a loan or another credit card, and then get denied because their credit score has dropped.

And people are losing their jobs as the economy slows. As it stands right now, the median U.S. household, if deprived of credit and income loss, has enough savings to last 18 days. That�s down from 30 days in 2001. We have been told to buy, buy, buy on credit for years. Now that incredibly moronic philosophy is coming to a quick and brutal end. That�s why people end up selling their gold watches and their children.

Where�s all that gold going? Shouldn�t the price drop if people are selling gold? Nope. The rich guys are snapping it up. Hedge funds, mutual funds, ETFs, investment banks and financial advisors, who have clients living the sweet life in the top 5% of net worth, are grabbing that gold. Since 2005, only the top 5% of American income earners have experience any real gain. It�s getting a little top heavy up in this bitch, like France 1790 top heavy. Get some scrap wood together and build a guillotine in that garage!

In the '70s, when we were in the same sort of economic situation, people lined up to buy gold and silver. They were converting their savings into gold and silver to protect it. But now, those people in the same income bracket are selling, because they don�t have savings, they have debt. So, they are buying dollars instead. At the same time, the Fed is printing money to fight the debt deflation unleashed by the housing bubble collapse, which causes the price of the dollar to drop and drop. It�s an epic disaster!

Debt deflation is a fucked up situation to live through. Here�s Dr. Steven Keen, an economist for the University of West Sydney who specializes in debt deflation, explaining what goes down.

A debt deflation is where you have an unsustainable level of debt in an economy, so a level that has already caused a crisis and therefore the types of affects we�re seeing with a credit crunch start to occur. And those are regarded as threefold. First of all people try to reduce their debt. Secondly, banks that were allowing a large rate of creation of new money are no longer willing to allow the creation to occur, certainly not at the same rate. And thirdly the banks are tempted to in turn reduce available funds for re-lending that in particular drops drastically.

So those combinations come together and you�re going to have a downturn driven by those factors of reduced credit and tightened credit plus the excessive debt level and the basic elimination of investment due to people trying to pay their debt down rather than trying to invest. If there is distress selling taking place people who are in debt are trying to move their product more rapidly to improve their cash flow and reduce their debts. You can bet they can actually cause a cascade over from falling asset prices into falling consumer prices with the impact of that, and very visibly this is what happened in America in the 1930s, this actually increases the ratio of debt to GDP because two factors of price declines and debt repayment occur simultaneously.

Uh oh. That dude said 1930.

Hey, lookey! The stock market is tanking!

This was the worst first half for the Dow Jones industrials since 1970, when the country fell into recession.

Yikes.

U.S. markets continued their descent, with the Dow Jones industrials on the brink of their worst June in 78 years.

This is a train wreck. There has never been a period in the history of the world when the people carried the amount of debt we are carrying today. The lenders just finished lending out to the bottom of the barrel Americans: The sub-prime borrowers. Now it is biting them in the asshole. (Except, of course, the government is giving them tons of cash to make up for it.) And those borrowers were the end of the line. They were the people who did not deserve and never should have received loans. The problem is, they had to be doled out, because our economy is now a credit economy. We don�t make things anymore. We make our money from finance, investment and real estate. Or we did, anyway. That shit is coming to an end.

Gas is the tipping point. The United States was not constructed for high gas prices. As a country, we quite simply cannot function with such high prices. People who drive the greatest distances are those who can least afford the rise in price. The janitor who drives 50 miles to work in his SUV is completely fucked. He can�t sell the car, or afford the gas. Public transportation you say? There is not a city in this country that can handle the load of so many people making the switch to public transportation. There aren�t enough buses or trains. And if Bush bombs Iran, well, you can kiss the America you know goodbye. Think Mexico.

Even if situation does not get worse from here on out, this current mess will not work. When the vast majority of people are suffering and the rich are getting richer, the politics change. We are now there. Just take a look at the approval polls of Republicans. A shift is coming and it will change the way predatorial finance companies do business � but it will be ugly getting there.

People are beginning to understand that they are being lied to on a daily basis. You can�t tell us the economy is humming along; when we know it is not. And it hasn�t been for years. Every president since Reagan has changed the way economic information is collected and reported � Clinton was the worst of all. So, when the reality on the ground does not match what people are seeing, they stop believing you. There has always been a disconnect between politicians and the populace, but now that disconnect is just as large between the media and the people. That is where we are now and people are angry. America is a lit fuse.

Americans are fine when they are able to just scrape by. We took the years of working long hours or two jobs to afford that 100-mile a day commute to get to our overpriced house. America listened to the news, and the bogus economic statistics for years. Something didn�t seem right, but everyone went along. Now, with the housing disaster, insane gas prices, a plunging dollar and big time inflation, people are at their breaking point. It�s going to come very, very, soon.

In a report that underscored the economy's persistent weakness, the Philadelphia Federal Reserve Bank said its business activity index dropped to minus 17.1 in June from minus 15.6 in May, well below Wall Street's forecasts around minus 10.

Prices paid soared to their highest levels since 1980.

"They are pretty bleak numbers," said David Sloan, economist at 4Cast Ltd. "There is not much to be said in favor of it."

Some analysts are hoping the weaker dollar's boost of exports could help the economy skirt recession, despite a teetering housing market and soft consumer spending. The latest figures indicated otherwise.

We're going down.

The Labor Department said producer prices over the last 12 months were up 7.2 percent in May, the eighth consecutive month prices rose more than 6 percent on a yearly basis.

The last time PPI produced this many straight months of above 6 percent year-over-year readings was the period between 1977 and 1982, a Labor Department official said.

Johnny can�t afford $1000 a month in gas. And he can�t afford the rise in food prices. And he�s got no savings. And he can�t afford health insurance. And he�s in massive debt. Who is Johnny going to get mad at? For every action there is a reaction. You can�t fuck over the poor the way this country has for 28 years without massive blowback. Time for the big boys to start watching their ass.

And that�s only the beginning. Periods of financial instability always lead to war. They always have. Wars begin because of debt. Oh, and some big country seems to be taking our oil�.

64 Comments

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gcash056

Orlando, FL

October 2004

JUL 03, 2008 03:30 PM

> We don't make things anymore

Bingo. We've exported all the jobs that actually make things, and making things and selling them to other people is how you grow an economy.

This is like Britain in the '60s where they pretty much shut down their entire manufacturing capability, and you see what shape they're in now. Pretty damn crap.

We're heading that way now at a pretty good clip.

PixieDuzt

Cincinnati, OH

February 2004

JUL 03, 2008 05:29 PM

Why don't we Americans revolt? We haven't revolted since the revolution, maybe the civil war.... The europeans revolt. Why are we all so apathetic? Bothered by something? Someone else prolly is too. Get together with them and protest. Maybe more people will join you and you may just get heard. No need for anyone to get hurt, just listen to us for once motherfuckers!

bean

STAFF

Los Angeles, CA

JUL 03, 2008 07:15 PM

PixieDuzt said:
Why don't we Americans revolt? We haven't revolted since the revolution, maybe the civil war.... The europeans revolt. Why are we all so apathetic? Bothered by something? Someone else prolly is too. Get together with them and protest. Maybe more people will join you and you may just get heard. No need for anyone to get hurt, just listen to us for once motherfuckers!

You do realize that "revolt" and "protest" are two different things, that suggesting that there is "no need for anyone to get hurt" in a revolt is folly, and that the sentiment "just listen to us for once motherfuckers" is pretty much the driving force behind successful participation in a democratic republic... don't you?

scylis

Seattle, WA

November 2004

JUL 03, 2008 07:24 PM

we can either keep getting fucked in the butt or tear some shit apart. Iam shank me a whole lot of fucking kunt bagged dick faced assholes.

iam go spray paint something or someone now peace. mad

SPOILERS! (Click to view)

realistic67

Vancouver, BC

August 2005

JUL 03, 2008 08:07 PM

Sadly, This has been a long time in coming. Look back to the height of the Reagan years for the starting gun to this current death spiral fall from economic superpower status.

Way back when gas was 50 cents per gallon. America started to try to out spend the Soviet Union on weapons production and trillion dollar farcical defense ideas that, for the most part.... came to nothing ( Star Wars anyone??? ) While the Soviets were locked into a losing guerrilla war in Afghanistan. And borrowing money from third world sphere countries, desperately trying to keep their basic infrastructure intact.

the late 80's arms race was for the most part pointless. The American government knew the russians could barely keep making soldiers rations, and feed their populations. Let alone field the huge armies that Reagan said where just over the hill. Threatening American civilization

Once they were a basket case country. America's politicians just kept inventing adversaries to justify a huge military, which was where most of your manufacturing base had survived. ( your arms manufactures, oil companies, The Saudis, and the Carlyle Group happy. ) Sucking on the U.S. government Tit.

Which now finds you in Iraq, Afghanistan, and recently your Texas Caesar is looking at Iran as his next, last great oil Crusade. While all the real, good union jobs were long shipped off by your corporate boss elite to south east Asia. So that international investors could make their dime.

Leaving, for the most part, only three things: "Volunteer" Military service for a chance of college. In hopes you can get a good career in management or repairing the tanks and planes. low paying service jobs. Or, the promised dream of fame, fortune and maybe a cushy end gig in Las Vegas in their wake.

However, the world economic forces were different then. back in the 1980's and 1990's America still owned most of America. Now, your staggering multi trillion dollar government debt and soon much of your economic infrastructure is owned by China, India, and Europe. While your armed forces is strained to the breaking point far from home. So, doing the old trick of finding allies to world war your way out of this spiral is going to be tricky at best.

How can you fight when they all call your loans. And all the international banks won't lend your government money to keep going.

What happened to the Soviet Union, during it's balkanization in the 1990's looks like it's going to repeat itself in North America.

I just hope Canada can divest itself from the American economy fast enough not to fall all the way with you....

dholokov

Toronto, ON

April 2003

JUL 03, 2008 08:12 PM

I figure around 2011 I will be able to buy Montana with my Canadian dollars...

Colinism

Atlanta, GA

July 2005

JUL 03, 2008 09:21 PM

It will be ugly as sin but if it ultimately leads to the return of our manufacturing base then so be it.

ardour

Ottawa, ON

March 2006

JUL 03, 2008 10:47 PM

Bad time toor pay for an education I guess, hey? About the only time I'd ever get into debt. I wanted to next year, I guess I still will, but I'm a lot more reluctant now. Ugh. It's actually pretty maddening that if you don't have parents who'll pay for your education, or want to join the military, you have to borrow money to get an education which is all but essential in today's society to become a functioning citizen. I really really hate the borrowing culture.

Also a bad time to suddenly find yourself sick and unable to work. But you know, people needed their huge houses and SUVs, and banks were happy to lend that money.

Greybeard

Los Angeles, CA

December 2006

JUL 03, 2008 11:22 PM

Colinism said:
Actually pennies are also worth more as metal than they are worth as pennies, copper prices are steadily rising.

Pennies made since 1982 are Zinc, thinly plated with Copper. Prior to 1982 they were made of solid Nickel Bronze (10% Nickel, 90% Copper).

Trahern

United Kingdom

March 2003

JUL 04, 2008 12:00 AM

Still glad I don't live over there anymore.

vermicious_knid

Shreveport, LA

February 2008

JUL 04, 2008 12:34 AM

People have been trying to warn you for years about this shit - the tyrannical design of this system and its enslavement endgame.

That has been the only salvageable nugget, the only consolation prize - literally the "nannynannybooboo" and "I told you so" of knowing that you decadent, sneering pieces of shit who could have joined us and politically mobilized to halt this shit in its infant stages - is the pre-positioning to laugh at you the people who will be the most affected and take it in the teeth the worst. When you get the tyranny that is sitting in the queue for you, and its suffocating weight rolls down on you - you earned it out of stupidity, decadence, posturing, and emulation. You were warned. You had a chance. Now you get your punishment.... I hope that sense of humor warms you, and that you can cling to it, when you are suffering and this system plays itself out.

It felt better to peer at each other, gaining approval from the gallery, then snicker ------ than it felt to listen to truth, educate yourselves, and take action.

For every time that you laughed and posted a picture of a black helicopter, a tin foil hat, made a Ron Paul joke, defended the Federal Reserve system, denied the reality of the last gasp 2001 propping up attempt/kabuki theatre show/complete inside job 9/11 farce, heckled the concept of globalists preparing a regionalized interim intercontinental system to replace your country (North American Union) as it collapses, thought Obama would save you and fix it, etc... you are gonna get your medicine. Its gonna be a double dose.

He isn't going to stop it - he is going to facilitate, intensify, and oversee it. That is why the globalists and banking dynasties pre-positioned him to appeal to you. It is their next phase. Do you really think that a consolidated, corporate media (reigning over a 9 trillion dollar a year economy) would trip over themselves to endlessly promote a candidate who actually threatens their status quo? or who is going to "change" or shake things up?

NO! He represents NO CHANGE!!!! That is why they love him and are betting on you being so dumb as to think that he is "opposition" to the structure that is destroying your nation.

He is going to tell you "yes, we can make it through the tough times" and will demand austerity and sacrifice when the entire economy collapses in his first term.

They are putting a smiling face - a transitional figure - a quasi-Churchill/quasi-tickle me elmo image - out there. It is a Madison Ave. advertisement campaign. He is a packaged product and a puppet to facilitate the final phase of global government and oversee the destruction of this country while reassuring you so you don't struggle. You are getting sucked along for a ride.

I have no doubt that you will collectively drag us down that path.

See you in hell. May your chains rest upon you lightly...

abbicon

Antarctica

September 2007

JUL 04, 2008 02:46 AM

sad-sad, but true-true. things have been needing to change for a loooooong time. it's too bad that not only americans, but any other "wealthy" countries citizens are too fucking stupid, to make the obviously necessary changes to a bad situation before it's way, way too late. thankfully, albeit for fucked up reasons, i'm one of those poor people america has been fucking over for years(generations even), and in my neighborhood, there are more guns than people. we'll be okay, in the long run, and, you're 100% correct, we're so fucking tired of it, we can't sleep anymore...

vermicious_knid

Shreveport, LA

February 2008

JUL 04, 2008 03:32 AM

abbicon said:
we're so fucking tired of it, we can't sleep anymore...

Which is why the elite in control of all of this are trying to co-opt and manage our hatred toward the system and make it be, not about them but rather about the turnstyles processing us.

They have no desire to stop it, so in a manipulation of momentum type of "judo move" they have turned their machinery into convincing us that the turnstyles moving us en masse through the gears and grinds are good and that anyone against their machines and designed processing are bad.

We are being coaxed into our own bindings. The elitists are smart, are committed to long term goals, and are willing to work, which is why they're in control over us who are none of the above.

Until you buck all of it - no more poison pills and fake solutions - you won't be free. If you accept their fake system and streamlined opposition / dead end / tea kettle / pressure release / naval bulkhead containment zones / steam valves / you are a filed subject.

We had the freest nation in the world. We got hijacked by sick fucking people who consider the subordination of us as their crown jewel.

We've got to wrest control of the vessel called humanity away from the suicidal malthusians, force centralizing socialists, and the banking dynasties / "new-genecists" / human elimination faction who have bankrolled them, while convincing most of us that we have a shared destiny with their nihilism, that includes crashing the entire species upon a rockface - even if they've gotta lie to trick us into going along with it and building their centralized extermination infrastructure for our progeny.

We are being farmed. There is a reason people like Huxley wrote shit about getting us all on drugs, addicted to TV, our children in government schools, and then concluding that it is great and cool, capping it off with sentiments like this bullshit :

"A revolt of the plebs would become as unthinkable as an organized insurrection of sheep against the practice of eating mutton."

You're not in the meat business so you don't know about the farming and methodical execution of living things with survival instincts ....

Even a fucking cow kicks, screams, and charges the exterior of the chute once pushed toward its inevitable execution at the slaughterhouse. I've been there. I know what happens. I've sourced meat and secured "exclusives."

Any animal reacts violently and struggles when presented with the specter of piled up carcasses at the end of a predictable chain of events that they suddenly find themselves thrust into. That is why the executioners place flaps, screens, and false runs, employ non-executed rams that walk through unscathed, the trusted "judas ram" who guide the flock into the chambers, every animal that is killed experiences it in isolation. They feel like pioneers and surprised loners. They can't come to grasps with their own farming and that their lives were lies meant to feed the predators who feast upon them and the systematic design.

There are some who see it, hear the moos and squeals way ahead of themselves, and start trying to struggle free prior to being sent through the industrialized pre-determined gauntlet. That is what the shock rods are for.

You are meat.

You turn the cranks. You have the capacity to halt the process. But you won't.

That is why you are meat...

Oskar

United Kingdom

February 2005

JUL 04, 2008 11:35 AM

This thread brought out the crazies.

FellOnEarth

Temecula, CA

April 2006

JUL 04, 2008 01:41 PM

realistic67 said:

SPOILERS! (Click to view)

We may be goin' down, but we're takin' y'all with us. Yee-haw!

Honestly speaking, though it may be a bit condensed in your commentary, you seem to have gotten your head around the entire situation. I'm just about ready to trade in all my dollars in exchange for loonies instead.