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SyndicateEconomic Judgment Day
By Robert Ringer - Friday, August 20, 2010
Ever since Barack Obama fooled independents into giving him the keys to the car (his metaphor), the talk about economic judgment day has increasingly intensified. But what, exactly, would have to happen to bring about a total collapse of the U.S. economy?
One path to economic judgment day is for the government to allow market forces to rule, which, because of decades of government meddling in the economy, would surely bring about a full-scale deflationary depression. Though the iPod, flat-screen-TV, eat-out-four-nights-a-week crowd doesn’t want to hear about it, the truth is that a deflationary economic judgment day would be a good thing because it would cleanse the economy of artificially high wages, profligate spending, and malinvestment.
In a deflationary scenario, most people, to be sure, would be much worse off, but a small percentage of folks would actually come out ahead. That’s because a deflationary depression is a time when, in effect, property is returned to its rightful owners.
The second possibility for economic judgment day is runaway inflation, which I have been predicting for the past thirty years. This would almost certainly lead to social chaos and anarchy, more likely than not followed by a dictatorship. The reason runaway inflations tend to result in dictatorships is because the natives become restless when they discover that government’s paper money is worthless.
Having said all this, I must admit that I sometimes feel like Wile E. Coyote. Every time I believe the government is trapped by economic reality, I hear that infamous “Beep Beep” and end up scratching my head. With its high-speed printing presses, its ability to borrow virtually unlimited sums of money, and a monopoly on the use of force, government always seems to escape the consequences of its actions and lives to see another day. But unless someone figures out how to make gold out of paper money real soon, the inevitable is already written in stone.
It is American entrepreneurs who have held up the U.S. economy for all these years by doing what they have always done best: create wealth. It is they, not government, who create jobs and increase living standards. But if BHO continues to press the welfare pedal to the floor – which he clearly has every intention of doing – an inflationary ending is virtually assured.
Remember, the continued onslaught of valueless paper money disrupts the market and causes confusion, apprehension, and, eventually, panic. People are afraid to enter into long term contracts, because they have no idea what money will be worth in the future.
Businessmen decrease investments in new plants and equipment (as they are now doing), because they do not know if their real profits will be worth the risk. The latter causes shortages, which leads to even higher prices.
If inflation is not eventually curtailed, a final collapse of the economy begins when people start to guess at what future prices will be. This sets off a chain reaction where sellers increase prices even faster than the supply of money increases.
At that point, government faces its last chance to avoid a total collapse of the economy. Henry Hazlitt put it well when he said, “Every inflation must eventually be ended by government or it must ‘self destruct.’” This self destruction is exactly what has happened to nation after nation throughout history.
The case most of us are familiar with is Germany’s runaway inflation in 1923. Consider these figures: Between 1914 and 1923, the German government issued an additional 92.8 quintillion (92,800,000,000,000,000,000) paper marks, a 245 billionfold increase in the money supply. Prices, in turn, rose 1.38 trillionfold. Interest rates rose as high as 10,000 percent per annum on some debt instruments.
As you would guess, people eventually refused to accept paper money in exchange for goods and services. The economy collapsed and chaos and crime ensued. And waiting in the wings, preparing hysterical answers for hysterical people, was Adolf Hitler, who understood all too well that only an authoritarian police state could restore order.
Nevertheless, I’m glad the Obamessiah was able to fool the public and win out over Mush McCain. Why do I say that? Because if McCain had ended up on the throne, no matter how liberal he may have been, the Democrats and their left-wing allies in the media would have had a field day blaming the inevitable economic collapse on the evils of capitalism. (Remember, Obama has been in power going on two years and he’s still blaming George Bush for everything!)
I guess a rational person would have his South Pacific island picked out and be getting his papers in order in anticipation of having to depart on short notice. Yet, there is another alternative: Stay put, dig in your heels, and do your part to spread the truth – about inflation, about entitlements, about the sanctity of liberty, and about the loathsome nature of government.
In other words, do what you can do to educate others about liberty and what needs to be done to restore the United States to a nation based on our original Constitution.
One note of caution: Don’t think in terms of overnight victory. It won’t happen. In fact, this is a war where there’s no such thing as total victory. The story of the human race is told in the ebb and flow of liberty and tyranny.
Just as communists are wrong to believe they can change human nature and “convince” people to willingly give up their freedom and property, so, too, is it a mistake for defenders of liberty to believe they can convince those who worship big government to believe in freedom.
Contrary to the “summer of recovery” blather we are being fed on a daily basis, the truth is that the economy is getting worse by the day – and the worst, by far, is yet to come. Economic judgment day may be a bit late in arriving, but it is coming. So you have only two choices: Fight or flight. I’ve already made my choice. What about you?
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ROBERT RINGER is a New York Times #1 bestselling author and host of the highly acclaimed Liberty Education Interview Series, which features interviews with top political, economic, and social leaders. Ringer has appeared on numerous national talk shows and has been the subject of feature articles in such major publications as Time, People, The Wall Street Journal, Fortune, Barron’s, and The New York Times. To sign up for his one-of-a-kind, pro-liberty e-letter, A Voice of Sanity in an Insane World, visit www.RobertRinger.com
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ROBERT RINGER is a New York Times #1 bestselling author and host of the highly acclaimed Liberty Education Interview Series, which features interviews with top political, economic, and social leaders. He has appeared on Fox News, Fox Business, The Tonight Show, Today, The Dennis Miller Show, Good Morning America, The Lars Larson Show, ABC Nightline, and The Charlie Rose Show, and has been the subject of feature articles in such major publications as Time, People, The Wall Street Journal, Fortune, Barron's, and The New York Times.
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9 Responses to “Economic Judgment Day”
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Good article. I had kind of given up and was thinking about bugging out, since no one seems very interested in liberty anymore. But a couple of years ago I had written a play called “Pimp My Constitution” that went into the schools and colleges in my state and did pretty well. Then the Obamessiah came long and all of a sudden, picking up change became more important than creating prosperity. So I hung it up.
I believe the answer is not to be found in this coming generation but in the one that follows. This coming generation will dutifully do as they’re told. The next one will be the heroes. Many of us will be gone by then, but that’s the way history rolls.
Blatant promotion time:
The key will be education. We must get to them early. Our play did that, for what is was worth. It was endorsed by the Godfather of the Constitution, Michael Badnarik. You can see a preview here:
http://www.poplays.com/constitutionnow.html
We’ll stay and teach and perhaps be known as the old ones, the ones who remember. It may be hard to think of yourself that way, but that may be the best you can do in this life. Until the tide of history crests, we have no choice but to exist within the present zeitgeist and teach as many as we can before they take us away to the re-education camps.
Good times.
Robert, I agree with your take on the current situation. What I’m not sure about is your “advice” to stay put and educate the masses to the real cause of the pain they will be feeling. In the long term, that is what needs to be done, but this may turn out to be a situation where the masses “shoot the messenger” who brings bad news, literally.
In the short term, I am seriously considering that “Pacific Island” you mentioned in your article, or at least a place to run to in the Caribbean. While I don’t live in a major metro area, I am less than 60 miles away from a couple of largish cities (200,000 plus) that have large numbers of citizens that rely on government checks to live. If (and when) those checks either stop coming or stop buying what they used to, the “natives” will get restless. I for one don’t want to be around when that happens.
I have positioned myself in an industry that is poised for growth, even during a crisis. I manufacture organic fertilizer from poultry waste, which is a product that is both in demand and part of the growing organic movement. I am in a rural area with strong relationships in the community. What else can I do?
“And the worst, by far, is yet to come”………Robert Ringer
“Build, therefore, your own world.” ….Ralph Waldo Emerson.
Thus far, it has been a wonderful road trip for me. Over the past two months, as I re-explore the Southwestern United States, I find, everywhere, people are muddling through and somehow surviving. There are winners and losers everywhere. The winners are busy building their own worlds and their own happiness.
Busy as I am, I always find the time, however, to read, and sometimes reread, Mr. Ringers highly insightful blog; although, currently, I find little time/desire to contribute anything to it.
What this trip has taught me, from the time I touched down in Las Vegas—with its fabulously low hotel prices and all its sinful over-indulgence—until where I’m located now, inside the northeastern part of the beltway right next to midtown Houston—a location where, it seems, almost everybody in this part of town has stopped cooking for themselves, instead indulging on the over abundance and endless amount of food supplied by a mind-numbing number of restaurants— what I have learned in my travels is that America is currently muddling through in more comfort than during the Jimmy Carter era, which is the last time America faced a clear and present economic hardship. How long this muddling through can continue remains to be seen.
I’ve travelled through Las Vegas and on to Death Valley, bounced over to Flagstaff, The Grand Canyon (North and South Rim) Bryce Canyon(Took the Mule ride), Monument Valley(Took the horse ride), Sedona, Tucson, Tombstone, Santa Fe, New Mexico, Carlsbad Caverns, Big Bend, Texas and many, many locations in between. What have I found? How are people coping with the aftermath of the 2008/9 economic earthquake?
They are muddling through however they can…..that’s how. And this muddling through trend is going to not only continue, but intensify. If the average person wants to survive, then she/he better learn, real fast, how to muddle………
There will continue to be winners and losers. Geographically speaking, some states will muddle through far better than others. One of the winners will be, without a doubt, Texas…… I’ve spent the last few weeks in Texas(Dallas, Austin, San Antonio, Houston) and this state is in far, far better economic shape than any other state that I’ve travelled in thus far.
For some muddling through opportunities: “Go west young man,” and travel no further than Texas……….
Only time will tell for sure how long before all of the unctuous politicians run out of schemes to temporally prop up the unsustainable and artificially run economy. My gut tells me to expect the crap to hit the fan after the fall elections.
When it all finally comes crashing down, like a gigantic Humpty Dumpty, it will be a breath taking sight for sure; However, never underestimate or be surprised at the adroit ability of Americans to muddle through.
The Jimmy Carter/ Ronald Reagan Era taught me a powerful and burning lesson, one which I’ll never forget: Whoever thinks America is incapable of muddling through a dire and seemingly hopeless situation, he is surely out of touch with reality.
America can still produce and/or supply adequate food, clothing, and shelter for its entire population. That basic fact, of and by itself, is a sound reason to believe that America will once again emerge as a winner after a world-wide economic depression takes place.
Yes indeed, “the worst, by far, is yet to come”………but so is the best.
When all else fails—including education— the answer will be the Second Amendment.
Well said, Robert.
It’s amazing how people think they can achieve anything of worth without effort or discipline. Your blog reinforces the need for all people to wake up and stop expecting a life of ease without effort.
My other point is to remind you of the endless efforts of businesses to get us to buy more ‘stuff’. More stuff is what’s needed to move the economy. Yet the consumption of worthless ‘stuff’ impacts on the planet, the environment, and on our souls. See George Carlin’s wonderful piece on ‘stuff’. See also my short humorous piece on YouTube on stuff.
Keep up the passionate good work
Charles Kovess CSP
Australasia’s Passion Provocateur.
Great article, thanks
A very insightful read for someone living in the United kingdom. When it comes to International Relations the US and UK share the similar ideologies on government intervention. The economy across the pond here in the UK is worse than ever.
I understand that the only way to fix the economy is by creating a personal economy tailored to my individual needs. Which translate into educating myself with books from Tortoise Press:-) checking out a Voice of Sanity.
Excellent article Robert
I would like to ask for the advice of those who would like to give it, and it is sort of relevant here. I was extremely schizophrenic in my life and I was taking SSI money to pay the rent, etc. However, I found a medication that worked and now I am going to college with grants and I am going to get loans. I have libertarian sympathies, but when I think about it I keep hitting the wall that I took a lot of money from the government. Everytime I feel hypocritical. What should I do? Pay it all back? I know that I might get angry answers back, but I am willing to listen. Thank You.
Great blog. I think you stated our situation well.
“So you have only two choices: Fight or flight. I’ve already made my choice. What about you?
I have made my choice to fight! The elite will never voluntarily give up and we are headed for inflation, then hyperinflation, then the fight. Good luck to all who stand to resist.
You misunderstand the rest of the panel. They are not quiet because they are intimidated by Faber. They know their 19th Century economic history just as well as he.