What Recovery?
Posted on July 14, 2011 by Rock
Recently I bumped into an old acquaintance at the grocery store. Our conversation quickly turned to how much higher food prices suddenly seem to be getting, and I mentioned the urgency I felt to get more food storage.
?Food storage?? he asked dumbly, ?What for??
I looked at him like he had been living under a rock. ?Because of what we were just talking about -because of the economy,? I replied.
My friend looked at me blankly. ?The economy?s recovering,? he said.
My friend wasn?t kidding or being ironic. He was dutifully informing me of news he thought I had missed.
I spend so much time immersed in the actual signs of the coming catastrophe that I don?t realize not everyone is awake to the situation. Here was someone I thought I knew, blissfully parroting something he has heard blabbed about in the media for the past three years, when his own personal situation proves it false on its face.
My friend, you see, has been out of work for almost two years. Because his wife still has her job with the state, they are able to hold on -barely. Yet he firmly believes everything will turn right side up for them any day now.
Why? Because he?s been hearing it on the news.
He?s been fed these same promises for the past three years and things have only been getting worse for him and his family. Yet when I mentioned my intention to buy extra food now so I?ll have some in the future, he thinks I?m the one who?s screwy. And this right in the middle of a conversation about how grocery costs are climbing every month.
I?ve long maintained that aside from any threat of a natural disaster or other catastrophe, even if you manage to keep your job, the one overriding reason to buy all the food you can this year is because next year it will cost you a whole lot more. That?s the only reason you need. No matter what else happens or doesn?t happen, price inflation is a certainty.
Yet here was my otherwise well-educated friend thinking there was something kooky about thinking smart. He didn?t understand the connection between government debt and price inflation. He believed prices were going up because grocers were getting greedy.
Perhaps my friend is is the one who hasn?t heard the news, because even those sources that were keeping him in a constant state of optimistic bliss have very recently been forced to eat crow. The New York Times, for instance, reported Saturday that ?for the second consecutive month, employers added scarcely any jobs in June, startling evidence that the economic recovery is stumbling.? (Feeble Job Numbers Show Recovery Starting to Stall -7/09/11)
Most economists had been cheerily forecasting 125,000 new jobs in June, but when the numbers turned up only 18,000 mostly low-paying service jobs, there was no way to spin that into good news. As Gerald Celente put it, ?Virtually overnight, one dire employment report unraveled two years worth of government spin and media complicity.?
People like my friend have clung to these empty hopes for so long that they simply refuse to believe their situation could not improve. Haven?t they been hearing over and over that it most definitely will?
I spent considerable time with my friend explaining why an economic crisis is unavoidable. At this stage, a recovery is simply not possible. It?s too late to turn it around. Even if everyone in government suddenly came to their senses, we would still have to suffer through the earthquake of a correction that might last as long as ten years. We are not climbing out of a recession, we are falling into a depression.
I asked my friend, ?hasn?t your own wife watched as her colleagues have been laid off all around her? Isn?t that because the the state of California just doesn?t have the money to pay them??
?Yes,? he conceded, ?but eventually the federal government will step in and bail out California.?
He had his ready answers for everything. He had been well schooled. Never mind that any federal bailout could only occur by way of more inflation, resulting in the higher skyrocketing of the price of his groceries.
I was reminded of something Frederick Bastiat wrote, ?Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.?
In the end, nothing I said mattered. Am I an economist? Then what did I know? Who was I compared to all the experts in the news?
Most of us already know too many people just like my friend. They believe that even if things get really bad, it can?t get that bad. ?The system? will figure it out. The politicians will save us.
In the end, all we can do is what we can do. Some of us will continue to scrape and scratch and sacrifice and do what we can to prepare, no matter how feeble or hopeless our efforts may seem; while others will make no effort at all.
Posted on July 14, 2011 by Rock
Recently I bumped into an old acquaintance at the grocery store. Our conversation quickly turned to how much higher food prices suddenly seem to be getting, and I mentioned the urgency I felt to get more food storage.
?Food storage?? he asked dumbly, ?What for??
I looked at him like he had been living under a rock. ?Because of what we were just talking about -because of the economy,? I replied.
My friend looked at me blankly. ?The economy?s recovering,? he said.
My friend wasn?t kidding or being ironic. He was dutifully informing me of news he thought I had missed.
I spend so much time immersed in the actual signs of the coming catastrophe that I don?t realize not everyone is awake to the situation. Here was someone I thought I knew, blissfully parroting something he has heard blabbed about in the media for the past three years, when his own personal situation proves it false on its face.
My friend, you see, has been out of work for almost two years. Because his wife still has her job with the state, they are able to hold on -barely. Yet he firmly believes everything will turn right side up for them any day now.
Why? Because he?s been hearing it on the news.
He?s been fed these same promises for the past three years and things have only been getting worse for him and his family. Yet when I mentioned my intention to buy extra food now so I?ll have some in the future, he thinks I?m the one who?s screwy. And this right in the middle of a conversation about how grocery costs are climbing every month.
I?ve long maintained that aside from any threat of a natural disaster or other catastrophe, even if you manage to keep your job, the one overriding reason to buy all the food you can this year is because next year it will cost you a whole lot more. That?s the only reason you need. No matter what else happens or doesn?t happen, price inflation is a certainty.
Yet here was my otherwise well-educated friend thinking there was something kooky about thinking smart. He didn?t understand the connection between government debt and price inflation. He believed prices were going up because grocers were getting greedy.
Perhaps my friend is is the one who hasn?t heard the news, because even those sources that were keeping him in a constant state of optimistic bliss have very recently been forced to eat crow. The New York Times, for instance, reported Saturday that ?for the second consecutive month, employers added scarcely any jobs in June, startling evidence that the economic recovery is stumbling.? (Feeble Job Numbers Show Recovery Starting to Stall -7/09/11)
Most economists had been cheerily forecasting 125,000 new jobs in June, but when the numbers turned up only 18,000 mostly low-paying service jobs, there was no way to spin that into good news. As Gerald Celente put it, ?Virtually overnight, one dire employment report unraveled two years worth of government spin and media complicity.?
People like my friend have clung to these empty hopes for so long that they simply refuse to believe their situation could not improve. Haven?t they been hearing over and over that it most definitely will?
I spent considerable time with my friend explaining why an economic crisis is unavoidable. At this stage, a recovery is simply not possible. It?s too late to turn it around. Even if everyone in government suddenly came to their senses, we would still have to suffer through the earthquake of a correction that might last as long as ten years. We are not climbing out of a recession, we are falling into a depression.
I asked my friend, ?hasn?t your own wife watched as her colleagues have been laid off all around her? Isn?t that because the the state of California just doesn?t have the money to pay them??
?Yes,? he conceded, ?but eventually the federal government will step in and bail out California.?
He had his ready answers for everything. He had been well schooled. Never mind that any federal bailout could only occur by way of more inflation, resulting in the higher skyrocketing of the price of his groceries.
I was reminded of something Frederick Bastiat wrote, ?Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.?
In the end, nothing I said mattered. Am I an economist? Then what did I know? Who was I compared to all the experts in the news?
Most of us already know too many people just like my friend. They believe that even if things get really bad, it can?t get that bad. ?The system? will figure it out. The politicians will save us.
In the end, all we can do is what we can do. Some of us will continue to scrape and scratch and sacrifice and do what we can to prepare, no matter how feeble or hopeless our efforts may seem; while others will make no effort at all.
