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Monday, December 15, 2008

Pessemism

As I was paranoidly comparing the current political climate with Atlas Shrugged the other day, it occurred to me to wonder how much of this we should be fully expecting, and what other catastrophes we should expect.

I've read about the "coming housing crash" in the newspapers since at least 2004; the only surprise about it is that anyone is surprised. Well, that and the government's response to it; I guess I had naively believed that they'd learned that such mettling is counter productive. So what else can we expect?

Outlawing Gold. Personal ownership of things with certain value diminishes governments' power to tax via inflation. Owning gold was outlawed for this reason, I believe, in the thirties and in the seventies. When/if that happens again, it might be time to head for the hills and buy a bunch of canned goods. I seem to recall from a high school history class something about collapse of empires always being preceded by "debasing the coinage."

A "hundred days congress." When the new president takes power, a raft of "brilliant" plans will be floated to save the economy in every convoluted way imaginable, and Congress will approve anything the president asks for. They'll all get adulterated and re-purposed to things even less sensible than their original purpose, and cost a ton of money. The media will get all twisted up in the details of the plans and will forget that they aught to be condemning the plans' very existence.

All that money will have to be raised through debt, taxation, and inflation. US t-bills already carry a negative effective rate of return; I wonder at what point they will come to be considered something other than "risk free?" and what effect it will have on their rates and their ability to issue them? Presumably they'll have to offer higher rates to get people to buy them, of course, but what if the market for them dries up? I think its drifting that way already...

ooo, and to get real paranoid about it, imagine that some concerned bureaucrat recognizes that posts like this one set negative expectations about the future, having the real effect of changing people's willingness do do things like by t-bills with the expectation that they'll get their money back. This post could be considered "inciting panic," and could be taken down to protect the public good. The Feds (I'm talking federal reserve here) could set up a Google Alerts agent to monitor for negative sentiments like these being posted, and kindly ask the writer to take it down. If the situation gets real dire, they might even try to force the hosting site to take it down when the author refuses. I'd imagine that someone could make a compelling argument that this sort of negative sentiment is seditious and therefore unprotected by the first amendment .
The good news is that I'm pretty confident that at least Google wouldn't comply, given their history of refusing to supply information about their users even when the request is coming in the form of a subpoena.

Add destabilizing forces like this, and its hard to imagine a large-scale collapse not happening. There's even been some buzz about the "need" to update the US's nuclear arsenal in order to maintain a "credible deterrent." How much scarier can the world get? I think in light of the cyberwar threat, I'd rather have them run on vaccum tubes. Theres a double benefit: they probably wont work, and they can't be hacked from the internet. That would make a great plot for a movie.