Doomsday is coming? When? What to do?

I have stumbled upon quite a few websites and 1 radiostation preaching the coming of the economics doomsday in the near future.

Reasoning is the following: USA printed lots of $ for the outside use, $ became de-facto world currency UNSUPPORTED with anything except irrational faith in the American economy, USA has little goods to offer for the outside world = world economy is nothing but a big dollar ponzi scheme doomed to collapse. Collapse of the faith in the dollar = collapse of the world trade (USA consumes 40% of world trade). Collapse of trade = new global depression and possible WWIII. USA has a mighty good army but economic decline does cruel things to the military might (see Russia). BTW, foreigners have deep misgivings about officially proclaimed recovery of the American economy (and 8% growth of GDP). Reasons for doubts are very complex for an economics layman to reproduce here. Playing with statistics is one of the reasons to doubt.

Questions to answer:
1) Provided things go as they go (trade and budget deficits, outsourcing, Walmarization, etc.), when the faith of foreign people in $ will collapse? How long they will be willing to sponsor American consumption essentially for free?

2) What will happen next?

3) What to do to survive? Montana mountains anyone?

BTW, except for the horse dose of the religious quackery, some talk hosts working at Republic Broadcasting network http://www.rbnlive.com/ are quite worthy to listen to. Quite a "common sense" radiostation allowing lots of people (ranging from imbeciles to more or less sane) to speak out.

 

Log in or Sign up to hide all adverts.

Asian and European markets seem to be anticipating what you write of, are standing up their own currencies, and diversifying their markets well beyond the USA. I'm not convinced a US crash will bring down a world depression with it, although it would obviously be a turbulent period. I suspect our foreign policy radicalization in the USA may have at its source a deep fear about our economic situation in the near future.

It is a prudent time for Americans to make preparations for living "in the mountains" (or less dependently on corporate paychecks and power grids) and/or in other countries (get working papers in process now).

 

Log in or Sign up to hide all adverts.

Yeah, IIRC the Opec nations are dealing in Euros not dollars anymore. But a US crash would definitely bring a world depression if not collapse. How long it would last would be the only question.

I have my kit packed, I am a 3 day hike from here to the mountains. I spent 6 months alone in the woods before, I would prefer not to have this eventuallity happen. duh But everything will change forever at that point and all my relations will be dead in the anarchy. My buddy tells me not to worry. It will be what it will be. he says. I am as prepared as I can be, what else can we do? Damn socio-politico cliffhangers.

 

Log in or Sign up to hide all adverts.

One of the important things to remember in all this is that economics is all about appearance, not actuality. Money is a convenient convention agreed between all parties. It has no reality outside peoples heads.
Therefore, even if/ when such a crash occurs, whilst it is likely to lead to some rioting, unrest, and hopefully the downfall of various rich and powerful people, I think (well, hope anyway.) there is a good chance it wouldnt lead to much more. Even if a company is bankrupt, its machiens and stock still exist. what it would take would be the resetting of some kind of financial system, a renegotiating of the particulars of exchange, ie money, and we'd be off again.

 

Hmm . . . I'll be out of college by then.

Why should we watch these dates? Oh, let me guess . . . The Apocalypse?!

What about inflation?

 

yet another reason to hate america

 

Haha!

 

When one area slumps, economicly speaking, another area grows. So if there's a depression in the world somewhere there will be prosperity, usually the rich are immune to such economic hardships for they have so much money they don't miss a economic downturn until they have no money left at all, which rarely happens to the rich.

 

Rockefeller avoided most of the 1929 crash, so the story goes, because the boy shining his shoes, not knowing who he was, told of his purchase of 5 shares of ATT. Thus you may find interesting a report form the “back woods.”

A São Paulo newspaper yesterday was speculating about dollar collapse. It included following projected facts (all values in Billions of US dollars):

Trade deficit in 2004 = 700
Internal debt increase in 2004 =500 (vs. Clinton’s +300 surplus average.)
7 Asian central banks hold 3,700 they are:
Japan 2,500
China 483
Taiwan 232
S. Korea 170
Hong Kong 119
India 112
Cingapour 101

Alarmed as I am about the mismanagement of the US economy, this is not the greatest threat to long term prosperity in US. Even if a deep global depression occurs, the factories, farms, roads etc. are all still there.

The real long term disaster, IMHO, is in US education. Not only do several Asian countries have approximately four times the US economic growth rate, they are filled with hard working, smart students. India and China alone are annually producing 15 times more ADVANCED degree students in the hard science than the US. Technological leadership is already lost to Asia. For example US can’t make any flat screen display, not even one which is now two generations obsolete.

It is not cheap labor that designs robots that can walk while playing a bugle or let China safely orbit a man! China routinely operates 30 Km of fast magnetically levitated trains (to a suburban airport).etc.

India does NOT ONLY computer related work, but also judgement work. For example, you last loan application or Xray, may have gone thru the net to India while you slept (its daytime there). It was evaluated, the report written and sent it back to the US in less than 24 hours. You only assumed a US banker or doctor looked at it.

All must help prevent the impending loss of scientific leadership, which is foundation of a modern economy. I am trying – please visit my site, - DarkVisitor.com - to learn how and what you can do. Thank you.

 

This type of scenario is one of my biggest misgivings about living now in Vermont. We lived before in the high mountains of the Rockies, many hours by tough roads from a city of any size. City folks think of Vermont as being really rual - but we really live on the edge of hell. The most densely populated part of the US starts just 1/2 hour south of us. Vermont has a population of around 600,000 -- 20 million people live in just the NYC metro area alone. Between Boston, NJ, the more populated parts of CT, MA and the rest of the more crowded cesspools out here -- there must be 30-40 million people within a few hours drive. And in an economic collapse where are those people going go go? Well, the open spaces with wood to burn, farms with food, clean water and such are not down there in in the Cities . . . so we are screwed! NYC/NJ type of folks are normally not the most polite and considerate people in the world, and can you imagine how they will behave if everything goes to hell?

<sigh>

I think part of the job of the VT National Guard should be to use our A-10's and such which train around here to defend our borders should everything collapse like that! Let the folks in the cities fend for themselves. We have a farm here, and you just know that it would be like the barbarians at the gates if a few million of them hit the interstates headed into rural areas. Its *OUR* farm, if the cities are so great to live in . . . they should stay there, and they can eat their pets, then the animals in their zoo's and then each other.

Please Register or Log in to view the hidden image!

End of rant #39948 - aaahhhh, I feel a bit better now.

 

Do not want to destroy anybody's illusions; but one of the surest ways to be unemployable in the USA is to get an advanced degree in hard sciences. Why do we need more misery i.e. advanced degree holders?

 

Yeah, I would imagine thats true - we are becoming more a nation of Lawyers, salesmen, fast-food and Walmart employee's. The advanced degree holders belong now in the nations that are becoming our daddy's: India, China and etc.

 

To Dixonmassey:

I think your comments refer to mine. I agree with you that an excess of advanced degrees in any field is not good. Also agree holding advanced degree is not the ticket to wealth in US - college professors may find it hard to afford rock concerts tickets for their kids, because their life-time earning won’t equal that of the rock star in a single concert, etc. I think these priorities are also part of the problem. Perhaps more people better educated in science will help to value more what is important and lasting. I don’t know. I only can see where the US is headed in the next generation, I think.

I only mentioned fact that China and India are producing 15 times more advanced degree graduates than the US as evidence that they are, as I stated “filled with hard working, smart students.” Unfortunately many US students, not all, look for the easy courses etc. No way can you read my post as a call for the majority of students to seek advanced degrees in the hard sciences.

I think it very important that almost all students have a better understanding of the world they live in (and must compete in) which is increasingly built on the products sciences has made possible. Asians seem to understand this and are making great progress in their education systems.

If present trends continue and the scientific basis of US economy is also lost to Asia, US exports will be mainly rock music and movies, but even that may cease quickly. These exports, like the current export of dollars, will only find buyers while the rest of the world has great faith in / admiration of the US. – How long do you think that faith / admiration will last when some Asian, like the child who said “the king has no clothes” observes:

“The US is bankrupt and can’t even understand our science now.”(Tried to fully exploit the features of your Asian made CD player’s program lately?)

The global admiration for US music and movies will collapse with the dollar or soon after it. (Not to mention that live actors will not be able to compete with the computer ones India is working on now.) With little export where will you be? Don’t count on agriculture. True those hungry Asian will import much more but I retired to Brazil, which is rapidly expanding its agricultural exports, has lots of cheap fertile land, very abundant water, and a 12 month growing season. Brazil already surpassed US in beef, chickens, soy, OJ and others where US does nothing like coffee and tropical fruits. Brazil is just warming up as it clears new land etc. but it may not be competitive to some African nations for long!

For example, OJ produced in Brazil can be delivered to US, sold profitable at half your price, but little is because it has a $408 dollar/ ton (more in “Bushlands” of Florida and Texas) protective tariff on it. Almost all large agriculture in US survives ONLY because part of the 500 billion annual deficit is used to make the few rich and the many pay higher food / clothing prices than need be. (Perhaps I should cite this mentality that votes for higher taxes or greater debt so it can pay more at the store as additional evidence that US education is in sad shape- turning out people who have lost the ability to think anything different from the mass media line.)

Sad fact for US is that when the science is gone, US can’t even mount an agricultural based economy, which is competitive globally against countries like Brazil that have better natural gifts in agriculture. The US will not prosper on lawyers suing each other. What will you do when science leadership joins already transferred technological leadership in Asia? Start a rock band and try to sell records to those lawyers? You will no longer export records or movies to a world that holds a lazy, ill-educated culture in low esteem. The current administration is already generating a lot of global hate for US, even boycotts of US products.

I write with genuine concern. All my grandchildren live in the US. I have done what I can by writing Dark Visitor (Physics book disguised as a scary novel to appeal to people not currently interested in science.) and I am writing here. What can you do to modify the future I foresee for my grandchildren?

 

Billy T. I think you've mixed causes and results.
Unfortunately, holding an advanced degree is not the ticket not only to the wealth but also to the meaningful employment in the US. That's why smart Americans (% of smart people is relatively independent of the education system) avoid risky, underpaid "hard" fields, leaving them to the foreigners from poor countries who have no better options.

Science/eng. fields are way too risky (employment wise) and relatively low paid. Consider this, to get a Ph.D. one to lead subsistance existance for 5-7 years in a grad school, then usually comes 2-10 years of extremely low paid postdocing, then few lucky ones get a modestly paid positions in related to their education fields. However, bulk of the Ph.D. holders are forced out of the science after the postdoctoral phase. Too few openings, too many applicants.

Add there that having Ph.D. makes one extremely unmarketable in the real world. One needs to invest lots of time (and $ too) to switch fields and avoid homeless shelter. Suffice to say that many Ph.D.s go back to school for 2 years to get teaching certificate=Ph.D. is worthless if you did not win in research employment lottery. If you lose, it's like a burden on your neck.

Risk is too high. It's human to avoid playing a lottery with one's life if chances to succeed are 20-30%.

Invest lots of hard work in 10-15 years of education and training, just to find out that it's worthless and make you unemployable? Hell, I would not blame Americans for being sane.

 

Also, Billy T, your post illustrates well what import of cheap scientific labor (like me) to the USA has done to the long term American prospects. University-industrial complex glutted labor market, made it unattractive for the native born Americans. And what is the most funny, the very same complex blames Americans for the lack of desire to enter glutted fields and risk their wellbeing.

 

To dixonmassey:

We really don’t disagree. I only wish you would stop misunderstanding. I clearly explained in post directed specifically to you that my observations about the rate of advanced degree production in China and India are NOT a call for significant increase in US production of Ph. D.s. Please re-read paragraph that tells why I mentioned the facts about India’s and China’s advanced degree rates.

What I do want was stated in the paragraph following that paragraph, but to repeat it briefly: I want western societies to better understand the world they live in and place higher values on things like science, which make permanent contributions to their welfare, and not to overly emphases transitory values, like rock stars, etc.

BTW welcome. Glad you came. Unfortunately current immigration policy is making it very hard for others to follow you. Some of the best students I ever had were Asians. With a smaller supply to fill the gap, scientific leadership will shift to Asia more rapidly.

 

I see no reason why the comming global depression should be much worse than the one that took place during the 1930s. Trade patterns could be corrected and the global economy could off and running towards a bright future within ten years of the collapse if the collapse does not spawn a bunch of Hitler types.