Is Denninger right about the coronavirus?

[vnatale]

Started reading his book the other night and only got up to reading about 25% of it.

Was initially disappointed that the book was so old - 2011. But it' standing up fairly well other then wishing, of course, information was more up to date.

Started reading it again a short while ago and am now at 36%.

So far it's getting an A from me. I've been passing on excerpts from it to others. And, since I've already got the one below all set up, I'll also put it here.

I assume that almost all here will agree with it (as do I)?

Vinny


Turning to postsecondary education, we have all heard that success in life is reached through a college degree. This mantra is drummed into us from childhood, and like most of what we?re spoon-fed when it comes to matters that have a financial component, the foundation of the claim is largely true. It?s the omissions that are troublesome.


Before and into the 1970s and 1980s, it was quite possible to work your way through school with a part-time job at most state colleges. Dormitories were cinderblock-wall affairs with a Formica-topped plank at desk height and a shelf above for your books, along with a pair of beds. There was no air conditioning or cable TV service in the room, and heat was typically provided through central hot water or steam radiators. Food was school cafeteria standard and served in what would be described as a mess hall. Educational buildings were relatively utilitarian affairs, with the money spent in places where it counted, primarily in the labs for the hard sciences.


This is no longer true. Universities have gone on a building spree, constructing housing better thought of as luxury apartments and various emoluments to the educational process that are extraordinarily expensive. Staffing levels have been dramatically increased. Has the quality of education improved? The former environment was sufficient to produce graduates that were behind NASA landing men on the moon, among the many other accomplishments of that time.


But what these increases in spending have done is drive up the cost of postsecondary education to ridiculous levels. And once again, the financial industry and government stepped in to offer a solution to ever-escalating costs via loan programs that can be reasonably described as predatory and abusive.


The first step was, as with housing finance, to petition the government. After all, financial firms wouldn?t want young Americans to figure out that they could take out a huge student loan and then default on it! The student?s credit would be ruined, and the graduate might have to file bankruptcy, but how could the bank repossess a degree? The answer to that problem was to get Congress to pass a law so that student loan debt was nearly impossible to discharge in bankruptcy. In fact, the only other type of debt that holds the same status in the law as a student loan is child support. Of course, in the case of child support, there?s an actual child that requires food, shelter, clothing, and medical care. For student loans, it?s just a bank or the government that requires that feeding.


With banks and the government smug in the knowledge that they could hound students forever, cheap, below-market interest rate loans showed up literally everywhere, including direct government-subsidized programs, such as the Stafford student loan. The flood of cheap money caused more people to apply to go to college than there were slots in colleges for incoming freshmen. That shortage of available student capacity led colleges to construct new buildings, renovate dorms, and, of course, raise prices. The basic economics of supply and demand asserted themselves as the creation of artificial demand through cheap-money policies drove tuition and fees higher. This was all to everyone?s benefit, since we now had more students going to college, right?


Not quite.


Median family incomes, despite more and more kids going to college, did not rise in inflation-adjusted terms. In fact, the entire 2000?2009 decade was spent with median household income right near $50,000.11 But colleges were happy to sell you an education that was rising in price at 10, 15, 20 percent or more a year, and it wasn?t just tuition and fees that were skyrocketing. Books, housing, food, and everything college related went up in price at outrageous rates. Behind it all were banks and the federal government willing and able to give Junior a ticket to a great education. Whether Junior graduated with tens of thousands or even over $100,000 in debt, and in many cases was unable to find a job upon graduation, didn?t matter to them at all.


Part and parcel of this abuse is what is known as the Free Application for Federal Student Aid (FAFSA). This document demands not only information of the would-be student but also of their parents! Without full disclosure of parental income and assets, the student is effectively cut off from all grants, scholarships, on-campus work opportunities and federal student loans. Although our youth in college are typically legal adults, if their parents make too much money, there?s no aid forthcoming for that student, only debt.


High school and college counselors still claim that college is a good investment. For some people, it is, even at today?s ridiculously bloated price, especially if you can qualify for an academic scholarship. But for other students, it is not a good investment at all; graduating with $100,000 in debt when your job pays $50,000 a year and you have to pay off those loans within 10 years is a serious problem. Remember the rule of 72: For most student loans and a 10-year repayment period, it is not uncommon to pay a 30 percent premium for your education once you include the interest charges. If your blended interest rate includes some subsidized Stafford loans and some unsubsidized or private loans, the interest rate charged may be 6 percent or more. On a 10-year amortization schedule, $100,000 in debt costs about $1,100 a month, and on a $50,000 annual salary, you gross only $4,167 a month before taxes. Any hope such a graduate had of buying a house and starting a family is gone instantly with this debt load, as the student loans alone consume a quarter of their income. It?s quite easy to wind up destitute in this situation, especially if the graduate has trouble finding a job, and many graduates these days do.


Why did this happen in the market? First, if you have more people getting degrees, there will be more competition for the available jobs when you graduate. Basic economics tells us that if there is more supply than demand, the price, in this case the wage offered, goes down. Second, our corporations started importing people like crazy from foreign lands via H-1B visas and offshoring whatever labor they could to parts of the world with lower costs of living, driving labor demand and salaries in this country even lower. As a result, not only did the expense of an education go up but also the available return on that investment decreased dramatically.


In the general sense, student loans are never a good idea. Those who are academically talented should be incentivized to go to school with scholarships and other forms of noncash aid from endowments and private sources of assistance. But for the student who is just average, loan programs, especially where the student intends to study in a field where quick and certain salary advances are not realistic, are financial suicide. Our young people are frequently deceived by counselors, and there?s no evidence that the high schools in this nation spend any amount of time on this subject or speak to the cost-benefit analysis that any prospective college student should engage in before attending school. There is no clear disclosure in the various financial aid packages explaining how to work the financial ratios that apply to these loan programs, what happens to you when you graduate with a mountain of student debt, and the likely salary range you will have to pay it back with. There is even less disclosure about the fact that such a debt load will make you instantly ineligible for a standard home mortgage. Finally, some private educational institutions are under investigation over allegedly misleading their students with overly rosy claims of salaries earned and successful college completion statistics.


Arguably the worst problem in this regard is that our youth in high school, as they approach the college decision, are not informed clearly and unambiguously of the traps that await them in the financial aid office. We should not accept their remaining uninformed of the fact that if they go into debt for their college education, that debt is not dischargeable in bankruptcy due to those very lenders and schools demanding special status under the law.


There are exceptions, of course, to the general rule that student debt is a bad idea. Owing $5,000 coming out of college after four years with a job paying $50,000 won?t break the bank. The payments on that loan total about $60 a month. But as soon as you start talking about financing more than $20,000 or so for a four-year degree, beware. The required payments are real, and they don?t go away; if you default, the lenders sell your loan to a collection agency that will immediately hit you with penalties you can?t negotiate away, nor can you file bankruptcy to avoid them.


For many students in high school today, learning a trade makes much more sense than a college education. A trade returns income immediately and typically does not involve taking on any debt at all. It is quite difficult to offshore many trade skills, as they must be performed for the customer at the point where that service is purchased. While trades may not be prestigious vocations, they do pay a decent living wage and, wisely chosen, will always be in demand in some form or fashion. In the 1970s, it was common to have a required shop class in which one learned how to work wood and metal, including welding and the operation of a lathe, as early as junior high. Those students who showed desire and aptitude in these classes were encouraged to pursue their passions, whether in woodworking and fine carpentry, auto repair, or metal fabrication. These classes and facilities have largely disappeared over the last 20 years in favor of pushing every child toward college. There are also many trade skills that have grown out of the technology revolution, such as web design and computer repair, along with the traditional trades such as plumbing. When considering the allegedly better salary prospects that come with a college education, students must include not only the cost of the education itself but also the financing, if necessary, to attend, along with the student?s aptitude and love of the field of study. While there are many well-paying professional careers that do in fact require a college education, a student should always keep in mind that a job you hate, even if you make good money doing it, will never be something you look forward to when the sun rises in the morning.


If college makes sense for you or your children, after careful consideration of the options, find a way to achieve that goal without the use of debt and save your financial future.

[Kriegsspiel]

• High school and college counselors still claim that college is a good investment. For some people, it is, even at today?s ridiculously bloated price, especially if you can qualify for an academic scholarship. But for other students, it is not a good investment at all; graduating with $100,000 in debt when your job pays $50,000 a year and you have to pay off those loans within 10 years is a serious problem.
• if you have more people getting degrees, there will be more competition for the available jobs when you graduate. Basic economics tells us that if there is more supply than demand, the price, in this case the wage offered, goes down. Second, our corporations started importing people like crazy from foreign lands via H-1B visas and offshoring whatever labor they could to parts of the world with lower costs of living, driving labor demand and salaries in this country even lower. As a result, not only did the expense of an education go up but also the available return on that investment decreased dramatically.
• In the general sense, student loans are never a good idea. Those who are academically talented should be incentivized to go to school with scholarships and other forms of noncash aid from endowments and private sources of assistance. But for the student who is just average, loan programs, especially where the student intends to study in a field where quick and certain salary advances are not realistic, are financial suicide. Our young people are frequently deceived by counselors, and there?s no evidence that the high schools in this nation spend any amount of time on this subject or speak to the cost-benefit analysis that any prospective college student should engage in before attending school.
• There are exceptions, of course, to the general rule that student debt is a bad idea. Owing $5,000 coming out of college after four years with a job paying $50,000 won?t break the bank. The payments on that loan total about $60 a month.
• For many students in high school today, learning a trade makes much more sense than a college education. A trade returns income immediately and typically does not involve taking on any debt at all. It is quite difficult to offshore many trade skills, as they must be performed for the customer at the point where that service is purchased. While trades may not be prestigious vocations, they do pay a decent living wage and, wisely chosen, will always be in demand in some form or fashion. In the 1970s, it was common to have a required shop class in which one learned how to work wood and metal, including welding and the operation of a lathe, as early as junior high. Those students who showed desire and aptitude in these classes were encouraged to pursue their passions, whether in woodworking and fine carpentry, auto repair, or metal fabrication. These classes and facilities have largely disappeared over the last 20 years in favor of pushing every child toward college. There are also many trade skills that have grown out of the technology revolution, such as web design and computer repair, along with the traditional trades such as plumbing. When considering the allegedly better salary prospects that come with a college education, students must include not only the cost of the education itself but also the financing, if necessary, to attend, along with the student?s aptitude and love of the field of study. While there are many well-paying professional careers that do in fact require a college education, a student should always keep in mind that a job you hate, even if you make good money doing it, will never be something you look forward to when the sun rises in the morning.
• If college makes sense for you or your children, after careful consideration of the options, find a way to achieve that goal without the use of debt and save your financial future.

God damn, me and this dude share extremely similar ideas. I was going to say "especially about the scholarship part," but really, with everything.

I remember a discussion with one friend about the market aspects he talks about. I likened it to the Prisoner's Dilemma. Right now, it seems that people want the generalist white collar corporate/non-profit type jobs, which all advertise their jobs as requiring a bachelors degree (some of them even specify what type! lulz).

The defect-defect choice, where both prisoners lose, would look like what we see now, with all those people getting college degrees at a needless detriment to themselves.

Defect-cooperate is probably also happening, but the cooperate people just get screened out by HR without a look.

A lot of those jobs don't require a college degree for the work they want you to do, so if everyone "agreed" to stop going to college, those places would just take people they could get. That's the cooperate-cooperate scenario for the prisoners.

[Libertarian666]

• High school and college counselors still claim that college is a good investment. For some people, it is, even at today?s ridiculously bloated price, especially if you can qualify for an academic scholarship. But for other students, it is not a good investment at all; graduating with $100,000 in debt when your job pays $50,000 a year and you have to pay off those loans within 10 years is a serious problem.
• if you have more people getting degrees, there will be more competition for the available jobs when you graduate. Basic economics tells us that if there is more supply than demand, the price, in this case the wage offered, goes down. Second, our corporations started importing people like crazy from foreign lands via H-1B visas and offshoring whatever labor they could to parts of the world with lower costs of living, driving labor demand and salaries in this country even lower. As a result, not only did the expense of an education go up but also the available return on that investment decreased dramatically.
• In the general sense, student loans are never a good idea. Those who are academically talented should be incentivized to go to school with scholarships and other forms of noncash aid from endowments and private sources of assistance. But for the student who is just average, loan programs, especially where the student intends to study in a field where quick and certain salary advances are not realistic, are financial suicide. Our young people are frequently deceived by counselors, and there?s no evidence that the high schools in this nation spend any amount of time on this subject or speak to the cost-benefit analysis that any prospective college student should engage in before attending school.
• There are exceptions, of course, to the general rule that student debt is a bad idea. Owing $5,000 coming out of college after four years with a job paying $50,000 won?t break the bank. The payments on that loan total about $60 a month.
• For many students in high school today, learning a trade makes much more sense than a college education. A trade returns income immediately and typically does not involve taking on any debt at all. It is quite difficult to offshore many trade skills, as they must be performed for the customer at the point where that service is purchased. While trades may not be prestigious vocations, they do pay a decent living wage and, wisely chosen, will always be in demand in some form or fashion. In the 1970s, it was common to have a required shop class in which one learned how to work wood and metal, including welding and the operation of a lathe, as early as junior high. Those students who showed desire and aptitude in these classes were encouraged to pursue their passions, whether in woodworking and fine carpentry, auto repair, or metal fabrication. These classes and facilities have largely disappeared over the last 20 years in favor of pushing every child toward college. There are also many trade skills that have grown out of the technology revolution, such as web design and computer repair, along with the traditional trades such as plumbing. When considering the allegedly better salary prospects that come with a college education, students must include not only the cost of the education itself but also the financing, if necessary, to attend, along with the student?s aptitude and love of the field of study. While there are many well-paying professional careers that do in fact require a college education, a student should always keep in mind that a job you hate, even if you make good money doing it, will never be something you look forward to when the sun rises in the morning.
• If college makes sense for you or your children, after careful consideration of the options, find a way to achieve that goal without the use of debt and save your financial future.

God damn, me and this dude share extremely similar ideas. I was going to say "especially about the scholarship part," but really, with everything.

I remember a discussion with one friend about the market aspects he talks about. I likened it to the Prisoner's Dilemma. Right now, it seems that people want the generalist white collar corporate/non-profit type jobs, which all advertise their jobs as requiring a bachelors degree (some of them even specify what type! lulz).

The defect-defect choice, where both prisoners lose, would look like what we see now, with all those people getting college degrees at a needless detriment to themselves.

Defect-cooperate is probably also happening, but the cooperate people just get screened out by HR without a look.

A lot of those jobs don't require a college degree for the work they want you to do, so if everyone "agreed" to stop going to college, those places would just take people they could get. That's the cooperate-cooperate scenario for the prisoners.

There's another plan that would fix this issue in no time.
1. No federal guarantees for student loans
2. Allow student loans to be discharged in bankruptcy after a waiting period, say 7 years.
(The waiting period is to prevent doctors and the like from graduating from their professional schools and immediately declaring bankruptcy, which was the supposed reason for the bankruptcy bar in the first place)

Voila!

[WiseOne]

Great ideas, tech.

Student loans are truly a scourge. I've been wondering if the shift to online learning is really going to reverse completely after all this is over. Once students have been introduced to it, I can see a new cottage industry in online universities - at a fraction of the cost of the real thing - cropping up. Plus, there's nothing like a recession/depression to get people to question whether these astronomical tuition bills and loans are worth it.

[shekels]

There's another plan that would fix this issue in no time.
1. No federal guarantees for student loans
2. Allow student loans to be discharged in bankruptcy after a waiting period, say 7 years.
(The waiting period is to prevent doctors and the like from graduating from their professional schools and immediately declaring bankruptcy, which was the supposed reason for the bankruptcy bar in the first place)

Voila!

Maybe also
Zero interest.
If paid off within a set number of Years, depending on the amount owed.
Say 50,000 or less 10 yrs.
100,000 or less 15 yrs.
The unintended consequence from Doctors filing Bankruptcy has crippled many people with a student debt burden.
If that is the reason.
They could of just as easily suspended the License of the Doctors for a period of time.

[Kriegsspiel]

Great ideas, tech.

Student loans are truly a scourge.

Student loans are a great example of the road to hell being paved with good intentions. It makes great sense for a government to incentivize student loans. It wants to increase the education of its citizens. The rub is that you can't financialize intelligence. A sub-rub (mmmm) is that a high school education really is good enough for most people.

I've been wondering if the shift to online learning is really going to reverse completely after all this is over. Once students have been introduced to it, I can see a new cottage industry in online universities - at a fraction of the cost of the real thing - cropping up. Plus, there's nothing like a recession/depression to get people to question whether these astronomical tuition bills and loans are worth it.

We can hope.

[shekels]

There's another plan that would fix this issue in no time.
1. No federal guarantees for student loans
2. Allow student loans to be discharged in bankruptcy after a waiting period, say 7 years.
(The waiting period is to prevent doctors and the like from graduating from their professional schools and immediately declaring bankruptcy, which was the supposed reason for the bankruptcy bar in the first place)

Voila!

Maybe also
Zero interest.
If paid off within a set number of Years, depending on the amount owed.
Say 50,000 or less 10 yrs.
100,000 or less 15 yrs.
The unintended consequence from Doctors filing Bankruptcy has crippled many people with a student debt burden.
If that is the reason.
They could of just as easily suspended the License of the Doctors for a period of time.

What would that accomplish? No license -> can't work -> can't pay bills including loan.
Also, how would you extend that to people who don't require a license to do their job? Or would this great rule only apply to professionals such as doctors, lawyers, CPAs, teachers, etc.?

Yes it should be extended to all Professionals if you file bankruptcy immediately after finishing school.
Harsh i know.
But it just means if you are filing bankruptcy the debt will be discharged.
So you will need to find other employment.
Edit to add .
This may not be the best solution but look what we have now with People in debt Peonage.

[vnatale]

I've been wondering if the shift to online learning is really going to reverse completely after all this is over. Once students have been introduced to it, I can see a new cottage industry in online universities - at a fraction of the cost of the real thing - cropping up. Plus, there's nothing like a recession/depression to get people to question whether these astronomical tuition bills and loans are worth it.

We can hope.

I have been reading several bloggers who several years ago already had proposed that higher education would be almost exclusively online within a decade or two. There are probably some things that require physical presence (anatomy lab, chem lab, etc), but the vast majority can already be done this way. Jeez, my ex-wife got her masters degree (education) online around 20 years ago. Although archaic compared to technology now, it was quite doable even back then. They mostly used some IMAP feature in Outlook Express to have 'group conversations'.

I studied for the CFP (Certified Financial Planner) designation from 1985 to 1988. Obviously way before any form of online access for ANYTHING!

There were six course and for each one had to go on a designated day (along with all the other CFP aspirants) to a testing location to take a test(s) on each course we were testing for.

Since during that time period I was always working full-time (sometimes more than full-time) I'd only study for one course at a time. I remember one time at a test I heard one woman say to another, "I had to study two days for this one!" Like that was a lot! For me since I was not in the field and each course of study was all new to me (except for the taxes one) I'd spend 70 to 80 hours of studying in preparing for each exam.

For each course I'd get via the mail one binder full of al the paper and a book. I needed to study both and master the material so as to pass the exam for that course.

It perfectly fit my preferred style of learning (kinesthetic with aural being by far my least style). So many times in high school I'd complain, "Why do I have to go to these classes (in which I learn nothing!). Why can't they just give me the book??!!"

I learned in the self-study for the CFP in one of the modules they had about how to deal with clients and their preferred learning styles and best ways to take in information why I hated classes so much. They were primarily aural, which is as I stated by far my least preferred mode of listening.

Vinny

[Libertarian666]

Great ideas, tech.

Student loans are truly a scourge. I've been wondering if the shift to online learning is really going to reverse completely after all this is over. Once students have been introduced to it, I can see a new cottage industry in online universities - at a fraction of the cost of the real thing - cropping up. Plus, there's nothing like a recession/depression to get people to question whether these astronomical tuition bills and loans are worth it.

Yep.

[Libertarian666]

There's another plan that would fix this issue in no time.
1. No federal guarantees for student loans
2. Allow student loans to be discharged in bankruptcy after a waiting period, say 7 years.
(The waiting period is to prevent doctors and the like from graduating from their professional schools and immediately declaring bankruptcy, which was the supposed reason for the bankruptcy bar in the first place)

Voila!

Maybe also
Zero interest.
If paid off within a set number of Years, depending on the amount owed.
Say 50,000 or less 10 yrs.
100,000 or less 15 yrs.
The unintended consequence from Doctors filing Bankruptcy has crippled many people with a student debt burden.
If that is the reason.
They could of just as easily suspended the License of the Doctors for a period of time.

Zero interest would make the problem worse, not better.
The reason why college is so expensive is because of the ready availability of student loans.
Anything that makes them cheaper or more abundant will force prices even higher.

[shekels]

There's another plan that would fix this issue in no time.
1. No federal guarantees for student loans
2. Allow student loans to be discharged in bankruptcy after a waiting period, say 7 years.
(The waiting period is to prevent doctors and the like from graduating from their professional schools and immediately declaring bankruptcy, which was the supposed reason for the bankruptcy bar in the first place)

Voila!

Maybe also
Zero interest.
If paid off within a set number of Years, depending on the amount owed.
Say 50,000 or less 10 yrs.
100,000 or less 15 yrs.
The unintended consequence from Doctors filing Bankruptcy has crippled many people with a student debt burden.
If that is the reason.
They could of just as easily suspended the License of the Doctors for a period of time.

Zero interest would make the problem worse, not better.
The reason why college is so expensive is because of the ready availability of student loans.
Anything that makes them cheaper or more abundant will force prices even higher.

I meant to say Zero interest on the Loans outstanding now, if they were repaid within the allotted time.
This would be for only those who can not discharge the debt.
I see this as a better option than Student Loan Forgiveness.

Going forward I agree allow Bankruptcy as a option.

[Smith1776]

My first college degree started in the year 2006. About a decade later tuition for certain courses in my second degree has increased by as much as 50%.

I am so glad to be done formal education this year. It's gettin' bad! Monnneeeeehhhh!

[vnatale]

My first college degree started in the year 2006. About a decade later tuition for certain courses in my second degree has increased by as much as 50%.

I am so glad to be done formal education this year. It's gettin' bad! Monnneeeeehhhh!

Wouldn't that be a fairly low rate of increase for education expenses? Less than 4% compounded?


Vinny

[Smith1776]

Wouldn't that be a fairly low rate of increase for education expenses? Less than 4% compounded?


Vinny

You and my dad were both right...

It feels like more when you're the one paying it.

[vnatale]

Wouldn't that be a fairly low rate of increase for education expenses? Less than 4% compounded?


Vinny

You and my dad were both right...

It feels like more when you're the one paying it.

I paid for every cent of the cost of the last 3 1/2 years of my college education - junior / senior years for undergraduate and then master degree. I was certainly a lot more motivated having my money on the line.

Same as the way it was with food. I used to be known as the fussiest eater around. If a friend invited me for supper before responding I'd always first ask what his family was having. With my mother's terrible cooking I was always an "only three more mouthfuls" type kid. But once I started paying for the food there is NEVER anything that gets thrown out.

Vinny

[vnatale]

More from his book--related to going back to a gold standard...

Vinny


History bears this out, and it also demonstrates that when you have a hard currency, you have just given the people who own that resource, such as gold mines, an enormous amount of power. Those who have control over a small resource can cause inflation and deflation at will by either holding back or flooding the economic system with their commodity. Those people can and will do so, first inflating the money supply to make it seem that credit is very easy and reasonable to obtain, and then pulling the rug out from under those who are foolish enough to take loans through intentional deflation. The bankers ultimately seize all the collateral that was pledged for those loans and throw the people into the street.


If you look from colonial times in the United States to now, you’ll find that before the Federal Reserve, there were tremendously disruptive bouts of inflation and deflation, and in some cases, the change in the value of a dollar in terms of goods and services reached 20 percent or more within a single year’s time. It is true that the average value of a dollar from the start to the end of that period did not change much, but you don’t live your life in a manner that allows you to cherry-pick the start and end dates of your monetary experiment. Instead, you have a time when you want to get married, start a family, build a business, and plan your retirement and a time when you ultimately expire. Changes in the value of the currency over short periods of time leave you with a terrible choice. If you borrow to buy a home or build a business, only to see the value of the currency rise 20 percent in the next two years, there’s a fairly decent chance you won’t be able to pay and will become bankrupt, simply from the deflationary pressure and not from whether you made a good or bad economic decision.


The real problem in all economies is the lending of capital with interest and the inherent leverage and compound function this introduces into the economic system. Attempting to grow credit and money to meet the demand of interest due on lent funds inevitably must, if continued on an indefinite basis, result in runaway inflation and destruction of the currency. Failure to do so must result in recession and in lender and borrower bankruptcies. This requirement for economic balance is a constant, and whether you’re living with a hard or fiat currency system is immaterial.


Hard money doesn’t solve the problems we face and in fact introduces new ones. Those advocating for this change are mostly individuals with glimmers of instant wealth in their eyes. Some have even claimed that the fair price to convert the U.S. money and credit stock to gold would be in the $20,000 per ounce range or more. The first question to ask someone who wants to return to the Gold Standard is “How much gold do you have, and will you forfeit all of it, without compensation, to get the gold standard you want?”


Make sure you duck when asking that question.

[vnatale]

Now 63% through the book and it continues to be fascinating...Just read this page...Note what he has to say about owning gold. Libertarian666! A possibility??!!

Vinny


Part Two: A WAY FORWARD


Chapter 5


The Folly of Avoidance


Normally in a book of this sort you would find a discussion of how you can shield yourself from the certain-to-occur disaster. Some authors would advise you to buy gold, others to invest in foreign currencies, and still others to engage in a diversified strategy involving common stocks, bonds, and currencies across the globe, along with various commodities.


You will find no such recommendations here, for the simple reason that none of these strategies will prove effective to protect your wealth if our society does not change course. If you are one of the few who has the ability to pull on the levers of power in government, you might be able to become a pick-and-shovel seller in a sea of ever-increasing and unstable pyramid schemes. But unless you can amass billions and disperse it all over the world—and have the means to get to any of those locations on a moment’s notice and abandon those assets in places inhospitable to you—it won’t matter.


The issues we face as a nation are not limited to the United States. Since the dollar is currently the world’s reserve currency, if we hit the wall in the United States, economic repercussions around the world will be extremely severe. Becoming an expatriate may appear alluring, but it is fraught with danger; foreign nations are likely to become extraordinarily hostile to Americans, should we cause their economies to collapse as a result of our foibles. Large amounts of money can buy security, but do you really wish to live behind a barbed-wire fence and 10-foot-high concrete wall for the rest of your life? Travel to Jamaica and drive a few kilometers away from the tourist traps where cruise lines come into port, and you will see exactly what sort of fortress-style structure you will have to construct to be reasonably secure.


Likewise, if you follow the advice of many to buy gold, and the dollar collapses, you might believe you have successfully sheltered your wealth. Nothing could be further from the truth. While the government is unlikely to again attempt confiscating gold as it did in the 1930s, it is trivial to slap a 95 percent capital gains tax on the metal and demand that you document your purchase price for tax purposes. If the government takes such an action, your stash of $10,000 per ounce of gold turns into $500 in your pocket. The choice to deal in the black market will exist, but the risk of going to prison for tax evasion is hardly an attractive option.


For this reason, what you will find here are policy paths forward for our nation. These suggestions will not be painless for anyone in the Unites States, and there are powerful financial interests that align against all of them. They are designed to return the financial markets to a place that functions as a means of clearing payments while matching buyers and sellers, stripping the ability of various interests to blow Ponzi-style bubbles. They will require recognition of the insolvency of major financial institutions and government programs that have in fact been bankrupt for years but are trading on the premise of ever-increasing amounts of debt.

[vnatale]

On the next page he is loudly singing to THIS choir (of one!)…

VInny




Chapter 5


The Folly of Avoidance


Normally in a book of this sort you would find a discussion of how you can shield yourself from the certain-to-occur disaster. Some authors would advise you to buy gold, others to invest in foreign currencies, and still others to engage in a diversified strategy involving common stocks, bonds, and currencies across the globe, along with various commodities.


You will find no such recommendations here, for the simple reason that none of these strategies will prove effective to protect your wealth if our society does not change course. If you are one of the few who has the ability to pull on the levers of power in government, you might be able to become a pick-and-shovel seller in a sea of ever-increasing and unstable pyramid schemes. But unless you can amass billions and disperse it all over the world—and have the means to get to any of those locations on a moment’s notice and abandon those assets in places inhospitable to you—it won’t matter.


The issues we face as a nation are not limited to the United States. Since the dollar is currently the world’s reserve currency, if we hit the wall in the United States, economic repercussions around the world will be extremely severe. Becoming an expatriate may appear alluring, but it is fraught with danger; foreign nations are likely to become extraordinarily hostile to Americans, should we cause their economies to collapse as a result of our foibles. Large amounts of money can buy security, but do you really wish to live behind a barbed-wire fence and 10-foot-high concrete wall for the rest of your life? Travel to Jamaica and drive a few kilometers away from the tourist traps where cruise lines come into port, and you will see exactly what sort of fortress-style structure you will have to construct to be reasonably secure.


Likewise, if you follow the advice of many to buy gold, and the dollar collapses, you might believe you have successfully sheltered your wealth. Nothing could be further from the truth. While the government is unlikely to again attempt confiscating gold as it did in the 1930s, it is trivial to slap a 95 percent capital gains tax on the metal and demand that you document your purchase price for tax purposes. If the government takes such an action, your stash of $10,000 per ounce of gold turns into $500 in your pocket. The choice to deal in the black market will exist, but the risk of going to prison for tax evasion is hardly an attractive option.


For this reason, what you will find here are policy paths forward for our nation. These suggestions will not be painless for anyone in the Unites States, and there are powerful financial interests that align against all of them. They are designed to return the financial markets to a place that functions as a means of clearing payments while matching buyers and sellers, stripping the ability of various interests to blow Ponzi-style bubbles. They will require recognition of the insolvency of major financial institutions and government programs that have in fact been bankrupt for years but are trading on the premise of ever-increasing amounts of debt.


The core of where our economy is today and where we have traveled from has come about due to the Wimpy syndrome. We began by eating a single hamburger today that we promised to pay for next Tuesday. But then next Tuesday came, and we didn’t have the money to pay for both the previously eaten hamburger and a new one for our empty belly. So we borrowed once again, and again.


All of this has pulled forward demand but has not led to actual prosperity. It has instead led to financial harm, as all borrowing comes with interest attached. The car we would have bought three years from now if we had saved was instead purchased today. Had we saved and waited the three years, our insurance bill would have been half of what it was, and there would have been no car payment. Yes, our car for those two or three years would have been scratched up and consumed a bit more gas, but it would have gotten us to work, and we would have spent the interest payments ourselves instead of giving that money to the banks.


The cell phone we bought on credit would have been purchased six months later, and we would have less expensive cellular service as well. We would have paid $600 for our cellular service over the last year instead of $1,200.


The college our kids are attending today wouldn’t have come with a crushing cost that is impossible for any young adult to work their way through, consigning them to massive amounts of debt if they can’t get an academic scholarship. The dorms would still be cinder-block buildings, there’d be a TV down the hall in a common room, and the awful food would be served cafeteria-style. But our sons and daughters could flip pizzas part-time to attend school, and they would still be learning calculus, computer programming, physics, or the practice of law.


Our houses wouldn’t have ever cost $500,000 in a middle-class neighborhood. They would have cost $150,000 instead. Sure, they wouldn’t have fancy granite countertops, measure 2,500 square feet, and be adorned with Viking professional kitchen appliances, but you’d be able to afford to buy one on a common $50,000 household income with one parent staying home and raising the kids. We’d probably have fewer teen pregnancies, gangbangers, and other miscreants for good measure, simply because someone would be there when Junior got home from school to make sure he did his homework.


We wouldn’t have stolen the Social Security taxes in the 1980s and beyond. We could have decided in the 1980s to instead put each person’s earnings into an account with their name on it. A true trustee arrangement, which many people think we have for Social Security but in fact never existed, could have been put in place. To do that would have required an actual zero inflation target that was enforced, and when the first signs of the leverage explosion showed up in the late 1970s and early 1980s, along with deterioration in the GDP/debt imbalance, that was the time to do it.


But we did none of these things. We chose to promise to pay tomorrow for the hamburger we insisted on eating today. We elected people to Congress who sang a great song about balanced budgets and fiscal responsibility. But as soon as they were elected, they did nothing but borrow and spend money we did not have. To make matters worse, they nodded pleasantly while the Federal Reserve and our banks abused the monetary authority vested in Congress by the Constitution.


Now the bill for more than 30 years of our economic, fiscal, and monetary foolishness is on the table, and the waiter is tapping his foot.


Our history is one of serially blowing bubbles in an attempt to evade the consequences of the previous collapse. In 1980, there was $4.4 trillion in total debt outstanding in the United States. In 1990, that figure reached $13 trillion, triple the 1980 figure. In 2000, systemic debt reached $25.8 trillion, double the 1990 amount. And in 2010, we reached $52 trillion, yet another double.1

[vnatale]

PAGING KBG!!!!!!!!!

Vinny

If we refuse, as a nation, to take our medicine and proceed down the path you will find in the following pages, there is only one piece of advice that can be offered and one safe investment that has a reasonable chance of success. You need to own enough arable land outright to raise a subsistence level of crops, such as vegetables and fruit. You need sufficient livestock, such as chickens and goats, to provide protein and milk. You need the skills to successfully raise both crops and animals. You need a way to produce sufficient energy for your own needs without the trappings of modern civilization and distribution. You need guns and ammunition, because plenty of people will try to take your crops and livestock from you by force. Finally, you need neighbors who will protect and defend each other, because no matter how well armed you are, there is always someone with more and bigger guns, and everyone needs to sleep.


Even assuming you manage all of this, it does not guarantee success. History is replete with nations that have gone through government and economic collapses. There is a high probability that should we undergo such a collapse in the United States, we will emerge with a very different form of government than what we have now—a government marked by tyranny and brutality, much like the Third Reich, where simply being of the wrong race, color, or creed could consign you and your children to death.


For the future of the United States, let’s find a better way.

[vnatale]

He continues to attack and hit hard! Love it!

Vinny

Chapter 7


Reforming the Fed, Lending, and Derivatives


The Federal Reserve Act contains the following in Section 2A:


The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.1


Where in that passage do you see “stable prices” defined as “2 percent inflation?” Stable means, in the dictionary sense, “firmly established; not changing or fluctuating.” Stable prices are essential to economic stability. When prices are increasing, actors in the economy are urged to spend money unnecessarily to avoid debasement of saved funds. The precise intent of the interventionist actions that have been undertaken from 2007 to 2010 is fundamentally dishonest for this reason in that it seeks to deplete savings and thereby destroy the foundation of capital formation.


It is essential to avoid distortions of this sort to remove the need for people to participate in asset bubbles, whether directly or via Ponzi-style proxies, to save for their retirement, for education of their offspring, and for their own personal needs and desires. Forcing individuals and corporations to either spend or invest savings lest they be debased creates speculation where it would otherwise not exist.


We often hear it argued that 2 percent inflation is a normal rate of inflation. This sounds quite innocuous, but in fact it is not. Remember the law of exponents and that you work, on average, from age 18 to age 65, or about 45 years. That is, your earnings at 18 are worth in real terms 2.44 times as much per dollar as they are on your retirement date with a 2 percent inflation rate over that entire period.


This makes the premise of saving for retirement a bad joke. You should be able to simply sock away 20 percent of your income and retire with reasonable comfort. If you earn a median $50,000 a year for 45 years, you will have earned $2.25 million. If you saved 20 percent of that income with no growth whatsoever, you would have $450,000. Assuming your home is paid for by that time, and remembering that there is no appreciation and thus no tax due on this accumulated wealth as it is pure savings, you could spend $25,000 a year for the next 18 years, allowing you to live to 83. Note that Social Security, if it was simply put away for you instead of being a massive accounting fraud, would be 13 percent of your gross income, meaning you would have to save just 7 percent on a personal basis to have a retirement fund good to your mid-80s. Further, your home, being unencumbered, could be sold or the value extracted as you age to provide a further income boost.


Who wouldn’t like that system? This is what the Federal Reserve Act promises and has in fact promised since 1913. And it is what every Fed chairman from that date forward has serially and intentionally failed to deliver.

[Kbg]

PAGING KBG!!!!!!!!!

Vinny

You need to own enough arable land outright to raise a subsistence level of crops, such as vegetables and fruit. You need sufficient livestock, such as chickens and goats, to provide protein and milk. You need the skills to successfully raise both crops and animals. You need a way to produce sufficient energy for your own needs without the trappings of modern civilization and distribution. You need guns and ammunition, because plenty of people will try to take your crops and livestock from you by force. Finally, you need neighbors who will protect and defend each other, because no matter how well armed you are, there is always someone with more and bigger guns, and everyone needs to sleep.

LOL Vinny. By nature I am an optimist through and through, though for whatever reasons it gets harder to be an optimist as you get older. I don't like it, but my brain does it. I read and listen to a TON of history so the above is my conclusion for sure as to what you need for a semi serious crap hits the fan event.

Unfortunately, if it is bad enough most people simply get mowed down by events if they are in the wrong place...better to be lucky than good as they say.

Just a side note; in every historical period I have studied/read about and over almost 30 years of off and on in some not great places, if there is one skill that is immeasurably important to surviving in my view it is an excellent ability to read the winds of shifting power and align to strength. This is the stuff that will actually keep you alive (maybe).

[D1984]

On the next page he is loudly singing to THIS choir (of one!)…

VInny




Chapter 5


The Folly of Avoidance


Normally in a book of this sort you would find a discussion of how you can shield yourself from the certain-to-occur disaster. Some authors would advise you to buy gold, others to invest in foreign currencies, and still others to engage in a diversified strategy involving common stocks, bonds, and currencies across the globe, along with various commodities.


You will find no such recommendations here, for the simple reason that none of these strategies will prove effective to protect your wealth if our society does not change course. If you are one of the few who has the ability to pull on the levers of power in government, you might be able to become a pick-and-shovel seller in a sea of ever-increasing and unstable pyramid schemes. But unless you can amass billions and disperse it all over the world—and have the means to get to any of those locations on a moment’s notice and abandon those assets in places inhospitable to you—it won’t matter.


The issues we face as a nation are not limited to the United States. Since the dollar is currently the world’s reserve currency, if we hit the wall in the United States, economic repercussions around the world will be extremely severe. Becoming an expatriate may appear alluring, but it is fraught with danger; foreign nations are likely to become extraordinarily hostile to Americans, should we cause their economies to collapse as a result of our foibles. Large amounts of money can buy security, but do you really wish to live behind a barbed-wire fence and 10-foot-high concrete wall for the rest of your life? Travel to Jamaica and drive a few kilometers away from the tourist traps where cruise lines come into port, and you will see exactly what sort of fortress-style structure you will have to construct to be reasonably secure.


Likewise, if you follow the advice of many to buy gold, and the dollar collapses, you might believe you have successfully sheltered your wealth. Nothing could be further from the truth. While the government is unlikely to again attempt confiscating gold as it did in the 1930s, it is trivial to slap a 95 percent capital gains tax on the metal and demand that you document your purchase price for tax purposes. If the government takes such an action, your stash of $10,000 per ounce of gold turns into $500 in your pocket. The choice to deal in the black market will exist, but the risk of going to prison for tax evasion is hardly an attractive option.


For this reason, what you will find here are policy paths forward for our nation. These suggestions will not be painless for anyone in the Unites States, and there are powerful financial interests that align against all of them. They are designed to return the financial markets to a place that functions as a means of clearing payments while matching buyers and sellers, stripping the ability of various interests to blow Ponzi-style bubbles. They will require recognition of the insolvency of major financial institutions and government programs that have in fact been bankrupt for years but are trading on the premise of ever-increasing amounts of debt.


The core of where our economy is today and where we have traveled from has come about due to the Wimpy syndrome. We began by eating a single hamburger today that we promised to pay for next Tuesday. But then next Tuesday came, and we didn’t have the money to pay for both the previously eaten hamburger and a new one for our empty belly. So we borrowed once again, and again.


All of this has pulled forward demand but has not led to actual prosperity. It has instead led to financial harm, as all borrowing comes with interest attached. The car we would have bought three years from now if we had saved was instead purchased today. Had we saved and waited the three years, our insurance bill would have been half of what it was, and there would have been no car payment. Yes, our car for those two or three years would have been scratched up and consumed a bit more gas, but it would have gotten us to work, and we would have spent the interest payments ourselves instead of giving that money to the banks.


The cell phone we bought on credit would have been purchased six months later, and we would have less expensive cellular service as well. We would have paid $600 for our cellular service over the last year instead of $1,200.


The college our kids are attending today wouldn’t have come with a crushing cost that is impossible for any young adult to work their way through, consigning them to massive amounts of debt if they can’t get an academic scholarship. The dorms would still be cinder-block buildings, there’d be a TV down the hall in a common room, and the awful food would be served cafeteria-style. But our sons and daughters could flip pizzas part-time to attend school, and they would still be learning calculus, computer programming, physics, or the practice of law.


Our houses wouldn’t have ever cost $500,000 in a middle-class neighborhood. They would have cost $150,000 instead. Sure, they wouldn’t have fancy granite countertops, measure 2,500 square feet, and be adorned with Viking professional kitchen appliances, but you’d be able to afford to buy one on a common $50,000 household income with one parent staying home and raising the kids. We’d probably have fewer teen pregnancies, gangbangers, and other miscreants for good measure, simply because someone would be there when Junior got home from school to make sure he did his homework.


We wouldn’t have stolen the Social Security taxes in the 1980s and beyond. We could have decided in the 1980s to instead put each person’s earnings into an account with their name on it. A true trustee arrangement, which many people think we have for Social Security but in fact never existed, could have been put in place. To do that would have required an actual zero inflation target that was enforced, and when the first signs of the leverage explosion showed up in the late 1970s and early 1980s, along with deterioration in the GDP/debt imbalance, that was the time to do it.


But we did none of these things. We chose to promise to pay tomorrow for the hamburger we insisted on eating today. We elected people to Congress who sang a great song about balanced budgets and fiscal responsibility. But as soon as they were elected, they did nothing but borrow and spend money we did not have. To make matters worse, they nodded pleasantly while the Federal Reserve and our banks abused the monetary authority vested in Congress by the Constitution.


Now the bill for more than 30 years of our economic, fiscal, and monetary foolishness is on the table, and the waiter is tapping his foot.


Our history is one of serially blowing bubbles in an attempt to evade the consequences of the previous collapse. In 1980, there was $4.4 trillion in total debt outstanding in the United States. In 1990, that figure reached $13 trillion, triple the 1980 figure. In 2000, systemic debt reached $25.8 trillion, double the 1990 amount. And in 2010, we reached $52 trillion, yet another double.1

A couple of issues I see:

One, Karl Denninger seems to have a real axe to grind in blaming the skyrocketing cost of higher education on "fancy facilities" and "amenities" as he has mentioned this quite a few times. I'm not sure that his theory is actually borne out by the facts; see https://www.theatlantic.com/education/a ... ca/569884/ and https://www.insidehighered.com/news/201 ... st-college.

Two, when he mentions Social Security being diverted into individual accounts with each person's name on it I only hope he was referring to a portion of the increased FICA taxes after the Greenspan Commission in the early 80s (IIRC about 1/4 of those tax increases went to provide current benefits and the other 3/4s were used to buildup the Social Security Trust Fund) that went into the SSTF and not ALL of the increases (again, some of the increase went to pay current benefits) or even worse, ALL of the non-Medicare portion of the FICA taxes, period. Given that Social Security is still an essentially Pay-Go system how did he expect to pay benefits for current retirees now (or current retirees back in the 1980s) if every bit of the SS portion of FICA taxes got diverted to private accounts? One of the following three things is true: He is lying to us and trying to pull the wool over our eyes, he doesn't understand actuarial science (or even basic math), or he should've been much clearer in saying that only the portion of the FICA tax increases from the early 80s onwards that DIDN'T need to be used to pay current benefits (and certainly not ALL of the FICA tax!) should've been diverted to private accounts.

Three, it wasn't all (or even mostly) the fault of easily and cheaply available mortgage credit that drove the price of housing up; 30-year mortgages have been available since the 1930s, zero-down loans for veterans since 1944, low-down payment loans for non-veterans via the FHA since the late 1940s, and low-down or even zero-down loans via private PMI in certain forms since 1957...oh, and Mortgage rates were pretty low from the late 1940s to the early 70s and housing prices weren't nuts then.

Four, the explosion of debt since the late 70s and early 80s that he bemoans was aided/abetted/caused/enabled by several things:

On the Federal level, the supply-side belief that "tax cuts pay for themselves" and that therefore we can cut taxes again and again and never cut spending...even when it becomes obvious beyond a reasonable doubt that almost all tax cuts don't even come close to paying for themselves nor do they lead to higher economic growth.

On the corporate level, the ending of the near-prohibition of share buybacks (so it's now perfectly legally OK to leverage your company up by borrowing money to buy your own stock back), the heavier use of incentive-based executive compensation like options (so now execs have all the incentive in the world to leverage up to juice earnings per share) combined with MUCH lower tax rates on high incomes (if Uncle Sam is going to get 90% of every dollar you make over a few million you have a lot less incentive to leverage up to try and boost your company's earnings because you won't see a huge bump in after-tax income even if it does work as planned), debt-based leveraged buyouts of one public company of another (almost unheard of before the late 70s) and private equity companies doing the same thing taking companies private and loading them up with debt to pay for doing so (again, only became common in the last 30-35 years....before then, there were countervailing forces--like regulators, and unions, and just plain social disapproval--that would've looked dimly on a "load up the company with debt to pay for the buyout, pay ourselves a huge recapitalization dividend to celebrate, and then if the economy softens and the company can't pay the interest on the debt and goes into bankruptcy and has to lay people off...well, too bad; we've got ours already so f*ck everyone else" strategy by an LBO operator or private equity firm),

On the individual level, the loosening of usury laws, the toughening of bankruptcy laws, 40+ years of stagnant real wages for lower-class and middle-class earners, and healthcare/education/housing costs rising more in line with nominal GDP growth rather than just with inflation (which wouldn't have been so bad if average median wages had kept up with GDP growth and productivity growth...but they haven't by a long shot) is far more responsible for rising household debt burdens (and the fact that one breadwinner can no longer support a household) than the "I've got to have it now" mentality that Mr. Denninger seems to want to pinpoint as the main culprit.

Fifth and finally, I'm not even going to get into what his idea of a zero inflation target would do except to say that maybe Mr. Denninger needs to crack a macroeconomics textbook to study what "downward nominal wage rigidity" and "price stickiness" are and see how a zero inflation target would make those a lot worse issues than they already are.

[Kriegsspiel]

We began by eating a single hamburger today that we promised to pay for next Tuesday. But then next Tuesday came, and we didn’t have the money to pay for both the previously eaten hamburger and a new one for our empty belly. So we borrowed once again, and again.


All of this has pulled forward demand but has not led to actual prosperity. It has instead led to financial harm, as all borrowing comes with interest attached. The car we would have bought three years from now if we had saved was instead purchased today. Had we saved and waited the three years, our insurance bill would have been half of what it was, and there would have been no car payment. . . .

But we did none of these things. We chose to promise to pay tomorrow for the hamburger we insisted on eating today. We elected people to Congress who sang a great song about balanced budgets and fiscal responsibility. But as soon as they were elected, they did nothing but borrow and spend money we did not have. To make matters worse, they nodded pleasantly while the Federal Reserve and our banks abused the monetary authority vested in Congress by the Constitution.

Hmm, that looks familiar...

If you look at the things that are inflating out of control, they're mostly financial technology (bonds, stocks, insurance, etc), or things that can be financed with debt (houses, college, cars, medical bills, transportation infrastructure).

It seems like at some point in the semi-near past, there was a realization that growth is not possible when living "within one's budget," and future production was increasingly pulled into the present (with debt). At first, it was physical things (the aforementioned houses, cars, boats, subdivisions). This required natural resources like timber, fossil fuels, minerals. In a non-full world, with vast resources and not many people, it was possible to mine/cut/dig enough raw materials to make things, and people were productive enough to trade whatever they were making for someone else's stuff.

[vnatale]

We began by eating a single hamburger today that we promised to pay for next Tuesday. But then next Tuesday came, and we didn’t have the money to pay for both the previously eaten hamburger and a new one for our empty belly. So we borrowed once again, and again.


All of this has pulled forward demand but has not led to actual prosperity. It has instead led to financial harm, as all borrowing comes with interest attached. The car we would have bought three years from now if we had saved was instead purchased today. Had we saved and waited the three years, our insurance bill would have been half of what it was, and there would have been no car payment. . . .

But we did none of these things. We chose to promise to pay tomorrow for the hamburger we insisted on eating today. We elected people to Congress who sang a great song about balanced budgets and fiscal responsibility. But as soon as they were elected, they did nothing but borrow and spend money we did not have. To make matters worse, they nodded pleasantly while the Federal Reserve and our banks abused the monetary authority vested in Congress by the Constitution.

Hmm, that looks familiar...

If you look at the things that are inflating out of control, they're mostly financial technology (bonds, stocks, insurance, etc), or things that can be financed with debt (houses, college, cars, medical bills, transportation infrastructure).

It seems like at some point in the semi-near past, there was a realization that growth is not possible when living "within one's budget," and future production was increasingly pulled into the present (with debt). At first, it was physical things (the aforementioned houses, cars, boats, subdivisions). This required natural resources like timber, fossil fuels, minerals. In a non-full world, with vast resources and not many people, it was possible to mine/cut/dig enough raw materials to make things, and people were productive enough to trade whatever they were making for someone else's stuff.

Then the only, logical follow up question is...…..Have the two of you EVER been spotted in the SAME location at the SAME time??!!!

Vinny

[flyingpylon]

Interesting post from Denninger this morning. I don't know enough to agree or disagree, but it's an interesting hypothesis about COVID-19 being an attenuated virus from an unfinished vaccine for SARS or MERS.

https://market-ticker.org/akcs-www?singlepost=3524114

Of course it has that unmistakable "off the rails" quality of most of his posts.