I didn't fully understand what he was saying at the time he said it.


Kramer was understating the issue.

Here's the best primer I've found on the mess we're in.

The bottom line is that the banks don't (and shouldn't) trust one another. When your employer gives you a $1000 paycheck drawn from an account at Washington Mutual, and you deposit it into your account at Timberland Bank, Timberland has loaned WaMu $1000. In the old days, a courier would shuttle the $1k between the banks. Today, this transaction and others are aggregated and the balance is treated as an interbank loan. If Timberland loses trust in WaMu, the system collapses.

The more I read, the more it seems that no amount of overreaction seems unreasonable.

The worst case scenario is general deflation accompanied by widespread loan calls.

Think about this... how much money do you have? Don't confuse "money" with how much credit you've extended. Bonds? Money Market investments? Mutual funds? That's not money, it's simply someone else's debt.

I know this is a very serious issue but I can't help but be giggling over this guy Kramer. Good grief!

So any advice at what us little folks should be doing right now? Or do we just hang on for dear life?

No. Friggin. Clue.

If there's a credit crisis, what seems sensible to me is to either stay away from the credit chain to every degree possible or, at a minimum, "invest" (loan) your money to someone capable of repaying with actual money; e.g. the federal government - assuming that the federal government remains creditworthy.

Failing that, the only solution is canned beans and physical gold and silver.

... and perhaps ammo.

Well, we've got the beans and ammo.

My question is "who doesn't get hurt in all this?"

I am not sure.

If you own everything and owe nothing, this is good.

Money in the bank should still be good.

Perhaps this is predatory but there are going to be some fantastic bargains from banks and overextended people coming up. There is going to be a feast for sharks and bargain hunters soon.

Ammo is good. There are going to be some desperate people.

Me either.



If the problem is hyperinflation (a possibility) then you're better off with massive fixed-interest debt on tangible stuff. Your income and the value of the stuff will inflate while the underlying debt won't.

IMHO, the bigger risk, based on what I read is a massive deflation. In that case, you're better off with no debt. And a moat.



Money in solvent banks should still be good. The first major bank to fail will consume the resources of FDIC.



The trick is knowing when its a bargain. That half-price apartment building is no bargain if the tenants incomes continues to drop to 25% of its precrisis level. The other thing to consider is that when everything is deflating at the same rate, nothing is a bargain except to people in relatively unaffected economies.

Just in case you weren't worried enough yet:
Excerpted from the Army Times.

Gina Cavallaro
Army Times
September 18, 2008

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.

Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

<snip>

In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it.

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.

<snip>

The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

What they're talking about are microwave crowd control weapons. And they are not "nonlethal".

http://www.newscientist.com/article.ns?id=mg18725095.600

Crap, LJ...I'm gonna have to stop reading your posts. At the very least right before I'm heading off to bed. Too many nightmare scenarios. I sure hope you're wrong but I don't see any easy way out of this mess. And I don't wanna get microwaved when things get so mad the people demonstrate either. Gee, whiz!

Okay... that would be an overreaction.

Armageddon is what we risk when we elect dominionists.

Did you ever read The Shock Doctrine? America has a really nasty governing coalition. Those who embrace economic catastrophe as a means to remake society for their benefit, are allied with those who believe themselves to have a monopoly on righteousness and welcome the end of the world so that they get their long-awaited opportunity to say "I told you so".

It's like a perfect storm of psychopathy. I'm not sure that the sensible folks are up to the challenge.

I'm far more familiar with the odious goals of the dominionist dimwits than corrupt and/or greedy financial folks. There was a time when I was a big fan of The Late, Great Planet Earth and spin-offs.

But this is real-life terror. And none of it sounds avoidable. Is it time to get on my tin-foil suit again? Will that at least protect me from microwave-weapons when I'm protesting? Oy veh!

I believe the tin foil suit would be a very, very bad defense against the microwave weapon. Place a swath of tinfoil in your microwave yo see what I mean.

I always thought the tinfoil made the rays bounce? But not gonna try it. Now is not the time to take a chance on ruining a perfectly good microwave and spending any extra money to replace it.

The tinfoil hat/suit keeps the government from reading thoughts and implanting messages.

It's not paranoia when they really are out to get you.