Ponzi Nose Snotreel

Here we are in the pink flush of a brand new year, about to get a brand new president, and one who speaks English. Everybody is hoping for an uptick in our shattered economy, and the turn of the calendar seems auspicious. There's a pleasant little kerfluffle going in the stock markets, and gas prices are way down from what they were just five months ago.

Don't let it fool you. This is the false dawn of the real disaster, which will be coming at us full throttle by May. For what, I ask you, will be the end result of Hank Paulson and the boyz shoveling enormous piles of monopoly money into the black hole of debt that the banking and finance "industry" has become? Paulson knows the answer, but he's not tipping his hand. The ultimate collapse he's cooking up, the collapse of the dollar, is deliberate. He wants the floor to fall out from under the currency, because after all, if you're trillions in debt, as Uncle Sam and Aunt Bank of America are, and you've borrowed real dollars, it's a lot easier to pay back with really cheap ones.

That's why Paulson and the Fed have turned the Almighty Dollar into history's biggest Ponzi scheme!

People may not want to hear this kind of scary news, but everyone who both knows what he or she is talking about and has the capacity to be honest will tell you the same. For example, there's R.Dan at The Angry Bear:

Since our society cannot go forward carrying every currently existing debt ($50T++) – (this figure does NOT include unfunded liabilities) unwinding unwise credit expansion means insolvency or inflation. There are few true creditors in our society – being a debtor is far more universal. The Federal Government, State Governments, Wall St., Banks, homeowners, consumers, leveraged investors and many other groups would benefit (in a lesser of various evils sense) from the debt reducing power of inflation.

Inflation is on vacation at the moment – but it is the end game. Fiat money requires at least some net positive inflation and a determined Central Bank can Quant-Ease (plus Gov fiscal) some of our problems away – with many side effects to be sure – but someone has to go over the top rope – and it is going to be savers and not debtors.

At some point we will have what may be called A Recovery – but it will really turn out to be A Reflation and collapse again – just like in the late 1930s. Inflating our way out of trouble may also crash into Peak Oil – creating Check Mate and Lights Out.

(The emphasis is mine.)

So if you're one of those rare people who has money rather than debts, you need to take steps now to secure your position, otherwise you'll arrive at Christmas, 2009 with just as much money as you've got now, but at least half its value gone. Now would be a good time to invest in agricultural land near a promising small town.

Jim Kunstler admonishes us to expect to see more and more impoverished, newly unemployed ex-commuters moving out of the suburbs and into small towns, and quotes Andres Duany's contention that "Gardening is the new golf." Then he adds in his usual cheerful tone, The government -- and anyone badly in debt -- benefits much more from inflation than deflation, so every effort will be made to avert the latter. The trouble lies in the government's dumb incapacity to control dangerous things that it sets in motion, so that an inflationary campaign to avoid compressive deflation can so easily lead to a fiasco of super or hyper inflation -- the kind that kills governments and turns societies into murderous monsters. I'll forecast the that the US dollar is worth 40 percent of its current value by next Christmas.

I would strongly caution anyone who may be reading this to pay close attention to financial matters during this extraordinarily dangerous time, to take appropriate action, to trust no one, and to listen for advice only to people who have an established record of having made accurate predictions in the past. Do not listen to morons like Lawrence Kudlow and William Kristol. Seek out people who know what they're talking about -- Kunstler, Krugman, Barry Ritholtz, and this guy R.Dan at The Angry Bear.

If you have a job at a grocery store or a restaurant, keep it. People have to eat. And if hand weeding between the lettuce rows is not what you went to college for, at least it's honest, hard, dirty, low-paying work, which is more than a lot of us have right now.