Sunday, December 12, 2010

Stalking the icy fangs of death; What's the next economic collapse going to be?

11:22 PM 12/12/10

I was thinking about the economy as I drove home tonight.

Actually, I didn't drive straight home after work. I stalked Curtis first. I know vaguely which town they live in, or near, but I don't know where. I know that they have Christmas lights. I know that they live someplace that's too small for them, just a small house or apartment.

So a few weeks ago I drove through that town, and I happened to see some lights that reminded me of Curtis. I was calling them The Icy Fangs of Death. This house had cold, bright, blue-white icicles hanging down over the porch. They were sharp and dangerous looking. Not friendly, but scary, more like Halloween than Christmas, the kind of sharp icicles that would fall down and stab you as you walked under them. I thought of Curtis right away and felt like that's the kind of thing he would do if he designed his own Christmas lights. He has all these skulls and other scary things as a theme when he decorates himself and his car. He likes tattoos, and I've looked at the tattoo magazines, and most of those images are scary and grotesque. So that seemed like his style. Actually, in reality, Carrie probably decided what the lights would look like, not him, or maybe they both did. But I pretended that the Icy Fangs of Death were his. I really don't know, I was just pretending.

But whoever owns the Icy Fangs of Death, they turn them off early in the evening, because they haven't been on the last two times that I drove through there at night.

I just did that to feel like I was visiting him, even though I don't know where he lives, and I'm not invited to visit.

So on the way home, the voices started asking me about the economic collapse - what would the next big disaster be? A while ago, I jokingly (and seriously) said, I don't know exactly what it will be... but mark my words, IT WILL BE *SOMETHING*. And I still stand by that vague, general, ominous prediction!

Some of these ideas are based on what I've read from Antal Fekete. He knows about a company called Barrick Gold. They've been helping to control the price of gold for many years now. However, the US government is still pretending (just for looks) to be honest and to care whether their puppet companies and banks are making a profit or not, so Barrick Gold had to pretend that it was going to go bankrupt unless it changed what it was doing. So they're not controlling the price of gold in quite the same way they used to. But actually, somebody still is controlling it and keeping it cheap. It might be Barrick Gold, or anyone else.

We were pretending that the imaginary corporation borrows a quintillion dollars and doesn't have to pay it back. Then, they buy gold from somebody at a very high price, like $100,000 an ounce. Then, they sell the gold at a very low price, like $1000 an ounce. Everyone snatches it up at that low price, and nobody else can sell any gold, because their prices are too high, so they lower their prices and they sell it at the same low price of $1,000/ozt. (Ozt means 'troy ounce.' I think there are twelve troy ounces in a pound, but I'm not sure. It's used for gold and silver.) Anyway, it doesn't matter that they just lost $99,000 in that sale, when they bought it at $100,000 and sold it at $1,000. We're pretending that they're allowed to just lose huge amounts of money and give it away to someone who is selling the gold to them. The purpose is to make everyone else sell gold at a low price too.

Then they were asking me what are the consequences of doing that. I don't know anything specific. All I know is the usual explanation of how inflation happens. There are lots of other people who have explained it better than I can.

So we moved on to the question of how speculative bubbles happen, and what causes them to collapse, and what would the next one be, because, mark my words, it will be something. Will it be some kind of technical paperwork, something with a name we've never heard of, like 'derivatives,' which had the collapse a few years ago? Will it be the same old land prices and housing prices again? Dotcom companies again? Commodities? What will collapse this time?

All of this happens because of the banking system, borrowed money, imaginary money that only exists in computers, and irredeemable money (you can't ever exchange a dollar bill for a specific amount of gold or silver - instead the 'price' of gold and silver is always changing, and the value of the dollar is always changing).

How big will it be? Will it be the ongoing destruction of money, businesses, and lives, like we've had for the past few years, businesses closing down and not reopening, with nobody being able to afford the rent to put a new business in that place? Will it be some big, familiar corporation that we're all used to, like the American car companies that went bankrupt - will it be Wal-Mart this time? When would someplace like Wal-Mart ever go bankrupt? That's unthinkable, isn't it? Well, but they have to pay a lot of rent on that land that they're on. Food companies? Farmers? Agriculture? Mostly the businesses that close down are industrial, like factories that make something other than food and basic necessities. Furniture shops are closing down - I'm seeing signs for that beside the road every day when I go to work. People can go a long time without buying any furniture - they don't really need it. You can live with just a few simple things in your house. Refrigerators? Washing machines? How many of those factories will shut down?

But if there's a 'bubble,' a big collapse someplace where people suddenly lose millions of dollars all at once, I don't know where that will be. I don't like it when that happens and people commit suicide or do other terrible things because they lost all their money.

I don't know what it will be, but I am waiting to hear about it. It will happen. It's the way our system works. It happens again and again, and it never stops and it never gets better.

Oh, but I forgot to mention, the whole point of this fantasy is that they control the price of gold, but gold's price doesn't necessarily have to keep going up. They can start selling it at $500/ozt or $300/ozt if they choose to lose tons and tons of money, if they feel that it's in their interest to do that. I always say that the price of gold and silver could go down. Don't assume that it will keep going up and up forever. Don't call it a 'profit' if the price of your gold goes up. Making a profit for real is more complicated than it seems, and most people don't understand how to do it, because the value of the dollar is always changing. You might have a 'profit' of $100, but the next day, your money isn't worth as much as it was yesterday, so then maybe $100 is hardly worth anything, and maybe you can't even buy a loaf of bread with it. That's just an example.

Anyway I was pointing out that we never assume that the price of gold will keep going up. It's slowly going up because they are MAKING it go slowly up, for their own little reasons. Someday, they could just as easily make it go down, a lot. There would be consequences, but they could do it. They have ways of making the paperwork so complicated that it doesn't directly cause inflation in an obvious way. It still causes bad things to happen (like economic bubbles), but it's hard for people to understand why they're happening.

that's all for now

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