85% CONTRACTION in the Economy!
August 11, 2010
– Comments (5)
The INDUSTRIAL AGE economy should contract about 85% over the next few years........I know originally I thought it would only contract 50%....but now that I have the benefit of history.......80-90% seems like a reasonable number.
When we cut off credit to housing.....new home construction declined 85% in just a few years......and that was AFTER government picked up the slack and borrowed massively. The problem now is that government has borrowed so much......who in the heck would continue to loan America money......and who is going to continue to loan America money?
Historically, America only borrowed a very small percentage of its annual tax receipts....now it is borrowing more than its tax receipts.......how long would you loan money to someone who borrowed more then their annual income, year after year.....?
Borrowing is the only reason politicians are getting paychecks while millions of Americans are getting fired.....Borrowing is the only reason Doctors are getting big checks from Medicare/aid.....
Just like we have a very small construction industry without borrowing.....imagine how much our economy would shrink if our politicians finally tapped us out.....?
My estimate is about 80-90%.......and my bias is closer to 90% via the Alstrynomic theory of Concentric Contraction.....it is simply what happens when you cut off credit to a leveraged credit dependent consumer economy.........
And once the economy does contract....government will be forced to tax us citizens everything we have simply to maintain the soverignty of our nation......BUFFET knows this, so he has started to give back most of his wealth early.......
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