Future Blues

This morning Paulson and Bernanke are in front of Congress and on TV defending the however-many-billions-it-is bailout of just about everybody.

I'm not sure why these guys don't seem to understand that they're beating a bunch of dead horses. Sometimes I think they do understand it, but just want to pretend that we can go on living the way we have been for the last sixty years, with our suburbs and SUV's and Hot Pockets and Iraq Wars and finance "industry," and that at some point everything will return to what has passed for normal in this dysfunctional land for the past few decades.

And maybe most of us -- the "general public" -- believe that too. But I feel certain that Paulson and Bernanke and anyone else who's the least bit knowledgeable knows, if only somewhere deep down in their heart of hearts, that the old way of life is dead, and that ten years from now, twenty years from now, and from now on, Americans will be living a much less affluent, much simpler, much more localized, and much more labor-intensive kind of existence.

In other words, we're being forced to join the human race.

But the HMFIC's, or Head Mothers in Charge, are not helping to make the transition from prodigal past to sober future any easier, with their bailouts and giveaways and transfusions of the stuff of life into dead animals. And if you want to know what the near future holds for ordinary people -- people like us -- you don't have to be an economics expert, but just one who pays attention to basics.

In 2009 we'll experience a catastrophic inflation. The bottom will drop out of the currency as a result of all this money the Fed is magically creating out of thin air and giving to insolvent financial institutions and businesses. It's money made of nothing but computer blips, and the computer is the twenty-first-century equivalent of the printing press. The relevant historical example is Weimar Germany of the early 1920's.

So before too long we'll wake up one morning to 27-dollar loaves of bread and ten-dollar bus fare.

The only thing that's keeping it from happening right now is the depressed price of crude oil, but next year world production will drop by nine percent, even without deliberate withholding of product by OPEC, and diminishing supply will catch up with diminished demand. We'll be looking at 200-buck oil soon enough.

It's inconceivable to think that Paulson and Bernanke don't know these things. They must know, because they're economists, after all. What can they and we possibly gain by pretending things are rosier than we know they are?