Musings
Doug McIntosh
It has been a bad week. Is it possible to have an entire week of bad hair days? It's tough to be a citizen of the United States these days. There is a feeling of impending doom that is seeping through the cracks into everyday life. People are stressed out and behaving strangely. The shuttle Columbia explosion, and the loss of seven human beings, capped a dismal week on the planet earth. Everywhere I look, I see the signs of chaos just waiting to be unleashed. The looming invasion of Iraq will be looked back as the release of pent up forces. My niece is now in Kuwait preparing her helicopter for war. The stock market senses the coming chaos and has now retreated to its October 2002 lows. The "January rally" wasn't much of a rally after all. However, in times like these, a study of economics seems almost quaint. I find myself pondering spiritual matters more and more, and not only because I am newly unemployed and trying to avoid being sucked to my financial ruin. Lot of that going around these days, you know.
100,000 jobs were lost in December. More, including mine, were lost in January. Oregon is in a state of governmental implosion. The income tax surcharge, the retroactive one, failed and the system is in free fall. Half of the state troopers were fired Friday. Bang and you're gone. 8 of the ten breath machine technicians were fired the same day. We can safely assume that drunk drivers will soon be stalking the roads with impunity and lead to many innocent deaths. 100 criminals were let out of the downtown Portland
Justice Center to wreak their criminal havoc. Welcome to the new state of reality in these here United States. California now has a 35 billion dollar deficit. Washington a four billion dollar one. The government edifice is falling out of the sky like the disintegrating space shuttle. Our task is to avoid being hit by the falling debris in our daily existence.
The federal government ran a $100 billion deficit in October, November and December. We are now looking at a several hundred billion deficit for fiscal year 2003. It runs from September 30th, 2002 to September 30th, 2003. Since we know the intent of the terrorists was to bankrupt our economy, I can only observe that they are succeeding brilliantly. The great inflation/deflation debate is now academic in my opinion. Those things which a TB2K poster says we need, like food, heat and shelter will keep inflating, and those things we don't need, like cars, designer clothes and computers will keep deflating. The worst of both worlds. Mr. Magoo and the FED have created 5 trillion dollars in the last five years. The stock market losses alone amount to nearly 8 trillion in the same time frame. The economic reality is that money is being destroyed on a greater scale than it is being created. This is one of the reasons our economy is in the shape it's in. Globalization has meant massive and permanent job losses, long term unemployment and reducing consumer consumption. These realities have caused increased consumer saving and reduced spending. Each one point of consumer savings equals $90 billion not spent. The negative savings rate is a thing of the past and is being replaced with a concerned populace building up emergency nest eggs. Add to this, the increased spending on fuel oil for heating homes and apartments, verifiable increases in basic food prices; I would say retail spending will stagnate or decline for the foreseeable future. Any increases will come from no profit sales of cars among other things. Once Wall Street figures out there will be no "profit recovery", things will really start to rock and roll on the exchanges. It is said that the stock markets despise uncertainty, and I can think of nothing more uncertain at the moment than continued prosperity. We are on the edge of a sword; trying not to be decapitated. Truly gives new meaning to the term a close shave as applied to the economic sphere.
The Austrian school of economics tells us that economic imbalances and distortions caused by excessive credit creation will be balanced by economic imbalances and distortions caused by credit contraction. The iron clad rule that growth caused by debt creation will be balanced by economic contraction caused by debt servicing is at the core of our economic situation in my humble opinion. We can continue the foolish process of creating more debt, or we can bite the bullet and begin to deal with the fundamental reality of excessive debt and its implications for our nation and world. Unfortunately, the current political and economic leadership is incapable of telling the people the truth, much less offering a coherent plan to deal with what's coming down the road. So be it. The storm is upon us; the ship is
unprepared for it. It will not be pretty, but balance will be restored eventually. I'm just not sure if people understand what that simple sentence implies. People, as well as nations, reap what they sow. In economic terms, we have built a huge edifice based upon the ideals of economic growth fueled by debt and financial hocus pocus. That edifice is now sending chunks of itself crashing all around us with increasing frequency. In my opinion, the officially sanctioned doomer one that is, the entire debt based economy will come crashing down to earth. I take no pleasure in saying this. I fully understand the pain and anguish, the shattered hopes and dreams, this will cause. Still, I tell it like it is as one of my emailers so aptly put it. I call the chips, or in this case chunks, as I see them.
I do feel that one of the things a doomer offers is, unlikely as it sounds, hope. Hope that we will not only survive and learn from our folly, but that we will eventually build a better world and society as a result. In that, I may be fairly accused of being an unrepentant idealist. To me, being called an idealist is no insult. For if we do not follow our ideals, then what is the point of living? The point of my essays is to help you understand the why and how of what is going on; then, to tell you that there are spiritual forces involved
that offer a true perspective of the current economic, political and military situation. If all you get out my essays is we are screwed, then I suggest you read them again. The reason I write them is to tell you that we are a triune being of spirit, soul and body. We are currently living on a plane of existence that is in undeniable chaos, but there is more to life than idiot leaders and a debt ridden collapsing economy. There is life and hope and spiritual advancement for starters. What we must do is attune ourselves to the
spiritual forces that govern our universe, what can be called either God, or the super conscious. And once we attune ourselves to that realm of light and beauty we must try and apply it to our current lives and situations. In other words, in an economy based on debt and deceit we must stand up for precious metals and truth. We must stand up for the truth and the results be damned in my opinion. We live in a time of great pain and even greater opportunity. The message expressed by gold bugs is often limited to economics, but I don't so limit it. If you stand up for the idea that money should be based on some certain reality, it seems to me that attitude will follow through into the political and spiritual arenas also. How can you say you want sound money and not want sound politics, or sound family relationships, or sound relationships between individual people and nations. I'm not saying that our lack of sound money is entirely responsible for our lack of soundness in these other areas. What I am saying is without a sound
economic foundation, based upon precious metals in my opinion, you are likely to end up with the kind of lying leadership evident all over the world. The idea that fiat money, and the debt and interest beast that cohabitates with it, enhance the ideals of truth, honor, integrity, and yes that much sneered at word, love, is one of the great follies of our time. People and nations cannot deceive themselves with the idea that you can get something for nothing in the economic sphere and then act surprised when that belief
permeates the entire society. You cannot expect to have CEO's like Ken Lay of Enron and then act surprised when honor and integrity are absent from daily commerce. You cannot expect to have political scandal after political scandal and then go, "but it doesn't affect the economy".
Whatever troubles face us, as a nation and a planet, we have created ourselves. And the only we to decreate them is to return to the ideals of truth, honor and integrity in all aspects of our private and public lives. Until we do THAT, thinking that an increasing or lowering of interest rates, or increasing the money supply will somehow prevent the logical outcome of a flawed economic premise is a definition of insanity. Thoughts are like flowing lava; reality is like what happens as it cools and takes a hard form. Did we really think we could ignore the lessons of economic history on what happens when money is backed by nothing with utter impunity? Exactly why do we think if do the same things the Dutch did in the 1600's with the Tulip
bubble, or John Law did in the 1720's we will get a different result? I guess we do and we are now going to pay the price for our self deception.
We will go to war in a matter of weeks with Iraq. When we do that, for we cannot back down now, the dikes will be opened on a broad front of economic, military, political and spiritual fronts. Keep your eyes on those things that are spiritual and hold on for dear life. Do not think that precious metals will "save" you. Still, in a tidal wave, it's better to have a life preserver than not.
'The tidal wave is upon us. What is, the current reality we have created for ourselves, is collapsing of its own structural failures. What is, will soon be no more. It will be painful, but at least let us in our time of trial remember the spiritual values and perspectives that will help us first survive and then rebuild. What I offer you is not the feeble hope of lies and delusions the current reality is based upon. What I offer you is the assurance there are spiritual realities that transcend our current situations. I think we should all remember that in the trying days ahead. For if we lose sight of that, the fact we are spiritual beings having a physical experience, then indeed we will have no hope at all. Take care, and discipline yourselves for what will soon happen. Some view it as the end and some don't wish to view it at all, but I look at it as an opportunity for immense spiritual growth, both individually and as a planet. In many ways, it is the beginning. I prefer to look at it that way. At least, if I am deceiving myself, it is a good deception.
Doug McIntosh
5 February 2003
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