The newly created money will follow the laws of gravity and flow downhill to the bond market where the fun is. Risk-free bond speculation will further reinforce the deflationary spiral until final exhaustion occurs: the economy will collapse as a pricked balloon. Instead of hyperinflation and the destruction of the dollar, you’ve got deflation and the destruction of the economy.

Denninger says that the “death spiral” will lead to fire sales of assets in a mad liquidation dash and, ultimately, to the collapse of both the monetary and political system in the United States as tax revenues evaporate. He opines that probably not one member of Congress understands the seriousness of the situation. Bernanke is risking something much worse than a Depression. He is literally risking the end of America as a political, economic, and military power.

Indeed, the financial and economic collapse of the last two years must be seen as part of the progressive disintegration of Western civilization that started with government sabotage of the gold standard early in the twentieth century. Ben Bernanke, who should have been fired by the new president on the day after Inauguration for his part in causing irreparable damage to the American republic may, in the end, have the honor to administer the coup de grâce to our civilization.

Antal E. Fekete
Professor of Money and Banking
San Francisco School of Economics
March 30, 2009
Why Obama’s Stimulus Package Is Doomed to Failure
[No. This isn’t an April Fools joke. But I don’t know for certain that he knows what is talking about either.

Have a nice day.–Joe]

The world looks as if it has been left in the custody of trolls.

Father Robert F. Capon
[Yeah, things are pretty messed up.–Joe]

It’s kind of sad irony when the head of the EU is criticizing the socialist schemes in the US.

James Huffman-Scott
March 25, 2009
Regarding EU chief: U.S. economic plans ‘a way to hell’
Via IM.
[There is no way I can add anything meaningful to that.–Joe]

Sovereign ingredient for a happy marriage: Pay cash or do without.

Interest charges not only eat up a household budge, awareness of debt eats up domestic felicity.

Lazarus Long
The Notebooks of Lazarus Long, page 30.
“The Notebooks…” was extracted from Robert A. Heinlein’s book Time Enough for Love in which Long is the main character.
[Although this advice was intended for marriages between humans in a common household, probably including group marriages, it seems to me it applies to much larger groups as well. I’m thinking of our city, state, and Federal governments.–Joe]

We have a system that increasingly taxes work and subsidizes nonwork.

Milton Friedman
[It’s true. But the people running the “system” refuse to see it that way.–Joe]

When a Banker jumps out of a window, jump after him — that’s where the money is.

Robespierr
[I’m pretty sure this was not the Robespierr. It’s just some random quote I picked up a decade or more ago probably from a Usenet group or something that I thought was appropriate for today’s economic situation.–Joe]

Here is the key insight: you might think that when collapse happens, nothing works. That’s just not the case. The old ways of doing things don’t work any more, the old assumptions are all invalidated, conventional goals and measures of success become irrelevant. But a different set of goals, techniques, and measures of success can be brought to bear immediately, and the sooner the better.

Dmitry Orlov
February 13, 2009
Social Collapse Best Practices
[On Saturday my Dad, my brother Doug, Ry, and I were all sitting around talking about the hazards and opportunities our current economic situation. Doug pointed out that five or ten years from now will be able to see all kinds of opportunities that are available to us right now if we only could see them. I don’t think anyone disagreed with him. But none of had any real clues as to what those opportunities are.–Joe]

My definition of social justice: those who refuse to work deserve to go hungry.

Clayton Cramer
http://thinkexist.com/quotes/clayton_cramer/
[It seems to me that this definition of social justice will soon becoming the norm.–Joe]

I think it’s astonishing, they’re ruining the US economy, they’re ruining the US government, they’re ruining the US central bank and they’re ruining the US dollar.

You are watching something in front of our eyes, very historically, which is basically the destruction of New York as a financial center and the destruction of America as the world’s most powerful country.

Japan’s economic “lost decade” was caused by trying to bail out the banks, and the West risks running out of money if it doesn’t let the bad banks fail now.

Systemic risk is going to be the same in 10 months, 5 years or 10 years if the fundamental problem is not solved.

The idea that you have too much debt, too much borrowing and too much consumption and you’re going to solve that problem with more debt, more consumption and more borrowing? These people are nuts.

Wall Street and the City of London are going to be “disastrous” for years, like in the 1950s and 1960s, and in 30 years, finance will “dry up and wither away” as we are entering a “long period of hard times.”

Power is shifting now from the money shifters, the guys who trade paper and money, to people who produce real goods. What you should do is become a farmer, or start a farming network.

Jim Rogers
March 3, 2009
Jim Rogers: Let AIG Go Bankrupt, Not America
[If true, “real goods” probably involves more than just farm/food products. My guess it will include security, water, shelter, sanitation, communication, and transportation as well. Probably in about that order.–Joe]