Thursday, March 05, 2009

Apocalypse now - Denninger

... those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent...

... says Denninger, but I still don't believe it. But maybe that's just me.


hatfield girl said...

S, remind me why you place such store by Denninger.

Sackerson said...

He's right about a lot of things, very technical in ways I'm not, and backs his judgment with his money. It's still possible I'm living in a fool's paradise, so I can only hope that my intuitive overall assessment is better than his - I think his temper gets the better of him when he surveys the negligence and criminality of the political and financial elite.

Wolfie said...

I'm nearly in the same space myself.

Had dinner with a friend of my wife and her husband the other night. He's a broker at a "leading" institution and we found no diververgence in our individual outlooks. Hell + Hand-basket.

I wish Denninger would be less "shouty" though.

hatfield girl said...

Perhaps we should think in terms of Russia in 1994. There we have a realised example of socioeconomic collapse. By 1994 there was a 5 year recession with a fall in income of 40%. This delivered mass unemployment, incredibly high interest rates, and de-monetisation of the economy. With the accumulation of payments arrears in all sectors, unpaid wages and pensions, and widespread barter even in foreign trade.

The difference here is that interest rates are low and money is being thrown around. But the fiscal problems are the same. They are likely to lead to unpaid wages and pensions, unemployment, and barter here also. The thrown around money will either just sit in the banks, or raise the rate of inflation.

What Russia got was not major civil strife but a massive drop in life expectancy - to 58 years for males -alcoholism, cardio-vascular disease, violent deaths (including suicides).

We don't know what is happening really nor what it will precipitate, any more than did the Russians. Though we can rely on the emergence of major criminality integrated into the governance of the state. That is already here. As are the beginnings of doubt about state payments.

Sackerson said...

Hi HG, Wofie:

Horribly grim, refuse to believe it, can't happen here. Anyhow, Russia wasn't in that good a condition beforehand, was it?

People in the UK will sit in their centrally-heated rooms, playing with their PSP2, Xbox 360s etc. Go out to the knock-off shop, the offie, the chemists and Lidl, then back again.

It's the bored and unimaginatively destructive kids and young men we need to worry about; maybe cheap drink and sex will keep them occupied.

Agree KD's shoutiness - I think he's beginning to realize how hard it is to get through the enormous deadweight of apathy.

Nick T said...

I was in Russia in 94 and it has lived with me ever since: literally hordes of pensioners lining the streets selling their last possessions before, presumably, crawling off somewhere quietly to die. Exchanging 10 dollars for a pile of crisp wrapped wads of cash i had to carry about in a shoulder bag.

Was discussing it with (economist) g-f this am. It's a question of how long the deflation lasts, but I've decided to pour all my resources into paying off the mortgage in the short term: if worse comes to worse i'd rather default on unsecured debt than lose the roof over my head. But i think it's come to that - it's not a question of the "wise" longer term choice: it's short term now.

Sackerson said...

Thanks for this, NT. Agree we should pay off debt rather than take risks with hoarding cash in the hope of inflating away debt.

I wondered what was going on in Russia at that time, but never heard reports of mass starvation. According to Orlov (link below) the poor state of Russia before the collapse meant people had survival strategies and resources in place - his point is that we're too used to things running well.