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alstry (35.21)

Alstry will QUIT BLOGGING FOREVER

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May 18, 2009 – Comments (41)

If in the next twelve months, if one of the following three Historic Events fails to materialize....Alstry will quit blogging forever!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! and that is a PROMISE!!!!!!!!!!

1.  It becomes very clear that America has entered into a MASSIVE DEPRESSION.

2.  Martial Law is imposed upon American Citizens.

3.  America is involved in a major military conflict where the draft will need to be reinstated.

Right now revenues are evaporating in America.  There is simply not enough savings to pay down debt sufficiently for cash flow to cover interest obligations.  As revenues continue to contract, a greater and greater percentage of GDP will be required to pay only interest and taxes and there will be very little private money available for goods and services.

This process was identified by The Institute of Alstrynomics a few years ago and called Concentric Contraction.  As a greater and greater percentage of the wealth of the nation moves over to the bank's balance sheets, the private citizens will have very little money and assets to spend on anything.

Our government's policies right now of transferring the nation's wealth to the banks while leaving the debt obligations burdening the private citizens, corporations and municipalities is sufficating the private economy.  There is simply not enough money saved to pay down debt enough where debt can be serviced by revenues.

The total deposits in the top 50 banks in America is about $4 Trillion dollars.  That is barely enough to pay down credit card debt and auto debt.....once you factor mortgages, home equity loans, commercial loans, commercial real estate loans, and municipal debt......if we took every dime of savings and paid down debt.....there would still be about $20 Trilion of debt remaining....NOT INCLUDING FEDERAL DEBT and entitlements!!!!!!!

http://nyjobsource.com/banks.html

As long as the banks kept extending credit freely, spending flourished and the debt could be serviced as the balance kept increasing and increasing.  Some call this a ponzi like scheme.  Once credit started to be cut off, spending slowed and debt started defaulting. 

As the existing debt obligations remain and revenues contract....debt will soon start to consume practically all of GDP and little money will be left for goods and services.  THIS IS WHAT BERNANKE AND GEITHNER DO NOT WANT YOU TO KNOW!!!!!!!

As this happens, the legal process called foreclosure and bankruptcy will transfer the assets of the American citizens to the the creditors, primarily the banks.... until the private citizens own practically nothing.

As Americans catch on....which they ultimately will due to massive job losses in the not too distant future.....social disharmony and unrest will likely start to escalate as more and more lose everything........At this point, based on the current policies being implemented in Washington we are rapidly accellerating the process with little being done to remediate a very foreseeable situation.  Katrina anyone???

The question now is whether government will allow the citizens to become aware....if yes, than it is likely Marshall Law will need to be implemented to maintain social order.....however, an equally plausible alternative will be to engage in major external conflict to effectively make economic concerns a non issue.

California is simply the first and most visible manifestation of concentric contraction....the state's deficit has become so large that the economy is no longer structurally sustainable.  This is spreading to other states rapidly such as Michigan, Ohio, New York and Florida.

Soon there will not be enough tax revenues coming in for government to function effectively...even if it taxed the citizens 100% of their income......as relatively few will have any taxable income.

Corporations like American Express can only keep laying off 6 or 10% of their workforce time and time again before there is not much of a workforce left....anywhere.

Based on my calculations....within 12 months, our nation will be in the midst of the largest Depression in our history........ unless radically different policies are initiated.  Based on recent comments by Geithner...this seems unlikely.

So there you have it....12 months and done.....unless radically different policies are set forth....and if so, Alstry will become the biggest bull in CAPs and Alstry's existence will no longer serve a purpose.

Here is to Alstry's departure......unfortunately, Alstrynomics is all about being right.

41 Comments – Post Your Own

#1) On May 18, 2009 at 10:44 PM, booyahh (< 20) wrote:

What a blessing, Alstry will stop blogging. Alstry, you need to see a doctor about your paranoia. There is no conspiracy. There is no Depression. Just as there was no WMD. Everybody is slowly figuring that out. When will you ?

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#2) On May 18, 2009 at 10:45 PM, alstry (35.21) wrote:

Delinquencies are going PARABOLIC....it should not be too much longer now!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

http://3.bp.blogspot.com/_pMscxxELHEg/ShHOSI9n-nI/AAAAAAAAFSU/vv1co4fr2qI/s1600-h/FedDelinquencyQ1.jpg

 

Here is a good discussion on the topic:

http://www.calculatedriskblog.com/2009/05/fed-delinquency-rates-surged-in-q1-2009.html

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#3) On May 18, 2009 at 11:06 PM, SkepticalOx (99.45) wrote:

Wait... If all three don't come to be, then you'll quit? Or if none of the three?

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#4) On May 18, 2009 at 11:06 PM, ChrisGraley (30.30) wrote:

Drat,

I knew there would be an "if"

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#5) On May 18, 2009 at 11:17 PM, checklist34 (99.73) wrote:

i will take you up on that, and eat pie, i vow to eat pie, if ONE of those things happens. 

PS:  draft/military conflict leaves us the sole world power for another 50 years IF we actually fight it and don't half-arse it. 

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#6) On May 18, 2009 at 11:18 PM, alstry (35.21) wrote:

I don't really think if is an if anymore....and I am quite confident of my projection.

U.N. says 1.4 million people displaced by fighting in Pakistan

Prepare....Alstrynomics is all about being right.

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#7) On May 18, 2009 at 11:18 PM, OldEnglish (28.20) wrote:

Don't worry, you'll still be blogging in a year. A depression only requires a 10% decrease in GDP. Too easy.  In addition, stop worrying about the debt or deleveraging. Bernanke's plan to deal with the problem is obvious. Get leveraged up as much as you possibly can at these interest rates.

Shocker: You can have devaluation, debt defaults, and currency inflation simultaneously. Argentina 1999-2002. The only difference is that America has the benefit of its debt being based in US dollars. 

Just laugh at the chumps who believe that last weeks failed auction will do anything to stop inflation. Higher interest rates on T-Bills will damage growth but will do nothing to slow currency debasement. Within a year, the Fed will be the MAJORITY buyer of 30 year T-Bills. That's right. Debt elimination via inflation isn't a challenge. It's easy.

While Argentinian MERVAL was cut in half in US dollar terms, the currency was debased by 75%. Start measuring the US stock market in Euros and see what happens over the next three years. Stagflation to save houseflippers: A new American classic.

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#8) On May 18, 2009 at 11:18 PM, TDUBFISH313 (39.20) wrote:

You forgot to add the earthquake in california.

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#9) On May 18, 2009 at 11:34 PM, awallejr (82.76) wrote:

Damn got suckered into this thread by the headline ;p

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#10) On May 18, 2009 at 11:48 PM, MikeBobulinski (< 20) wrote:

Can't argue against the possibility of the depression.  As pointed out by OldEnglish, 10% decrease in GDP equals depression.  Am curious to know why you think marshall law or a major world conflict is going to come about, let alone a major world conflict that will reinstate a draft.

Should the civil unrest that you predict come about in the next 12 months, then I imagine marshall law might be an option.  But this civil unrest would have to be very acute in nature, as there does not seem to be much in the way on indications that such is on the horizon.

As for a major world conflict (that would reinstate the draft) occurring, I would love to hear your theories on this one.  As a serviceman, I am always curious to know how folks view the military and any potential geopolitical event that might cause me to have to leave my home and execute the orders of the officers appointed over me and the President of the United States.

So please, Alstry, do share your thoughts on the marshall law and the war that you see coming.  I'd like to have some kind of detailed explanation documented here in the Blogosphere, so that I can look back in a year's time and marvel at how Alstrynomics was right...or at least have something to look at and wonder how you could be so wrong should one of the three fail to materialize.  Call it curiousity...

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#11) On May 19, 2009 at 12:04 AM, awallejr (82.76) wrote:

Ok, Alstry, I have a 4th option.  You will stop blogging should my points turn positive.

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#12) On May 19, 2009 at 12:16 AM, finabuddy (96.69) wrote:

1.  It becomes very clear that America has entered into a MASSIVE DEPRESSION.

 great way to base this on subjective critieria... according to you we are already in a massive depression, so i guess you just crowned yourself blogger for life.

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#13) On May 19, 2009 at 12:18 AM, awallejr (82.76) wrote:

Ooh, touche' by findabuddy heheh.

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#14) On May 19, 2009 at 12:40 AM, Tacomatight (69.21) wrote:

Oh man...I thought you said:

"1.  It becomes very clear that America has entered with a MASSIVE ERECTION."

I was like...hell yeah!

I think Fool needs to get these blogs under control. I like to read them but many of these "ideas" are strating to sound like Google Finance posts.

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#15) On May 19, 2009 at 12:46 AM, usmilitiadude (30.67) wrote:

Since government spending is part of the GDP, is it a very good economic indicator?

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#16) On May 19, 2009 at 12:53 AM, angusthermopylae (40.09) wrote:

MikeBobulinski,

As a former service member, I would probably say that it isn't the military that's at issue for a "new" war---it's the political powers-that-be.  After all, it isn't the military that declares war...or even pushes it; it's the civilian, elected leadership.

Examples of possible future conflicts:

1)  Mexico:  Economic collapse + major political unrest, and the whole "fight them their before we have to fight them here" argument gets a lot more urgent.  If nothing else, the US could take the position of pushing across the border to establish a "buffer zone" to prevent violence from actually reaching US soil...or they could call it a "humanitarian effort" to establish a safe refugee zone within 100 miles fo the border.

2)  That ol' standby, Iran.  I doubt this would happen (rather, I hope it never will) because the strategic layout is against us...narrow shipping channel and nervous civilian tankers.

3)  "Sphere of influence" head-butting with China.  This one would be over political influence and raw materials--steel, oil, etc.  I seem to recall another Oriental country that tried something like that about 70 years ago...

4)  "Sphere of influence" head-butting with Russia.  Doubtful, though both sides have the history.  But in reality (from my humble point of view) Russia isn't really into world domination...just local stuff.  Of course, Georgia could always get more out of control...

5)  Race for the Pole with Canada, Russia, assorted others.  Probably not a long-term conflict, but increased drum-beating and sword-rattling while the bespectacled diplomats figure out who owns what part of the Arctic.

6)  Renewed Global War on Terror.  All it takes is one dumbass group of radicals to cut the right/wrong telecomm lines, blow up a power station, block a major shipping channel, try a half-ass chemical attack (a la Tokyo subways)...and the whole "We gotta get the bastiches" thing takes off again...and it'll be the beloved Public pushing for a war, not our Fearless Leaders.  (Fear and anger get to be a horribly addicting drug after a while...)

Reasons for a wider war?  Food, resources, religion, politics...you name them.  Get enough people scared of the boogeyman, and there doesn't have to be a real reason...

As for me, I'm hoping for a nice, quiet, 2-4 year recession/depression where everyone is just too damned tired and poor to spend massive amounts of cash on something as stupid as another Operation Iraqi Liberation...I mean, Freedom.

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#17) On May 19, 2009 at 1:02 AM, awallejr (82.76) wrote:

Angus, Alstry is referring to a war that would require a new draft.  There are only 2 countries I could ever see this possibility occuring, that is with Russia or China.  At the present there is no reason to even expect such a possibility short of some warped sense of paranoia.

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#18) On May 19, 2009 at 1:25 AM, motleyanimal (93.75) wrote:

Alstry writes: "Marshall Law will need to be implemented to maintain social order....."

Marshall law? Try this site below. They are a bit loony, but at least they know what MARTIAL LAW is.

http://www.secretsofsurvival.com/survival/martial_law.html

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#19) On May 19, 2009 at 1:38 AM, hall9999 (99.53) wrote:

  It's just too bad we have to wait twelve months.

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#20) On May 19, 2009 at 1:58 AM, Option1307 (29.97) wrote:

For all of the Alstry bashing that goes on around here on Caps, peope sure seem to relentlessly and continuously read his blogs...

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#21) On May 19, 2009 at 3:57 AM, kristm (99.74) wrote:

The people will not revolt, martial law will not be required, because people in general don't care, or at least don't care enough to do anything about problems. And there won't be a draft, our new commander in chief will crumple at the thought of an armed conflict more serious than patrolling the streets of Baghdad. The revolution will not be televised, or even noticed, until we all wake up one morning and wonder when they started teaching Chinese in all the schools.

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#22) On May 19, 2009 at 4:32 AM, portefeuille (99.44) wrote:

Please do not stop. I would miss one of my contra-indicators (see comment #2 of this post) ...

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#23) On May 19, 2009 at 5:54 AM, portefeuille (99.44) wrote:

I do not read your posts but I have the idea that they are about unemployment and depression. Maybe you can keep on blogging about it until 2014 even if the recession is over in a few months:

----------------------

The United States may emerge from recession as early as this summer, though further job losses mean a "depressed economy" could last as long as five years, Nobel Prize-winning economist Paul Krugman said Tuesday.

"I think it's quite possible that industrial production in the United States and perhaps in the world as a whole will bottom out sometime in the next few months, that GDP growth in the United States will be positive in the second half of the year and maybe a little bit later than that in Europe," Krugman told a global financial conference in Seoul.

Krugman said that he would not be surprised if the U.S. recession, which began in December 2007, ended in August or September this year. But job losses were likely to continue into 2011, meaning "the period of a depressed economy" could last until 2013 or 2014, he said.

----------------------

(from here)

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#24) On May 19, 2009 at 6:29 AM, whereaminow (46.24) wrote:

portefeuille,

You're much more insightful than a NYT political operative. Don't waste your time with them. Think about it. What the heck did Krugman just say there?  The recession will be over but we're going to keep losing jobs. That's possibly the stupidest thing a noble prize winner has ever said.  How about this:

"The stock market will continue upward. But bankruptcies were likely to continue, meaning the period of a depressed stock market could last until 2014." - David in Qatar 

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#25) On May 19, 2009 at 6:34 AM, LawfordCap (99.89) wrote:

Would you say:

 

The US economy is going to be forced to quit university to take a job at Burger King to meet payments on the student loan?

 

Or like when your girlfriend gets “pregnant” and you have to quit law school to get a job in the hardware shop?

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#26) On May 19, 2009 at 6:36 AM, LawfordCap (99.89) wrote:

Is this the idea Alstry?

 

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#27) On May 19, 2009 at 7:42 AM, OctoStalin (47.90) wrote:

What do you define as a MASSIVE DEPRESSION? 

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#28) On May 19, 2009 at 9:00 AM, alstry (35.21) wrote:

Octo...something that will not need defining.

Sorta like the definition of pornograhy....you know it when you see it.

Why do you think I put it in ALL CAPS.

If it was in question, it wouldn't be MASSIVE.

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#29) On May 19, 2009 at 10:53 AM, Melaschasm (65.55) wrote:

The total deposits in the top 50 banks in America is about $4 Trillion dollars.

Does this calculation include retirement accounts?  One of my pet peeves about the US 'savings rate' crises is the failure to include one of the two biggest ways Americans save (the other being houses/land).

Even though I do not agree with you regarding the extent of the problems the USA faces, I do not want you to completely stop blogging.  I would rather see you just cut back to the occasional blog, and reduce the extremely negetive tone in your blogging.

 

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#30) On May 19, 2009 at 11:11 AM, UKIAHED (45.88) wrote:

The total deposits in the top 50 banks in America is about $4 Trillion dollars.  That is barely enough to pay down credit card debt and auto debt.....once you factor mortgages, home equity loans, commercial loans, commercial real estate loans, and municipal debt......if we took every dime of savings and paid down debt.....there would still be about $20 Trilion of debt remaining....NOT INCLUDING FEDERAL DEBT and entitlements!!!!!!!

 

Why are you using the data from just the top 50 banks?  Heck – I do not even bank at a top 50 bank…  If you look at all deposits, you will see that they actually top $7 Trillion in FDIC banks and savings institutions.  Add to this the over $500 Billion in insured credit unions.  Now add in the $3.79 Trillion in money market accounts.  This all adds up to over $11.25 Trillion.

If indeed you are correct that $4 Trillion will pay off credit card debt and auto debt (I did not check credit card and auto debt for you) – then we have plenty of liquidity. 

You may also want to take the long-term debt out of this argument (or I will have to add the money in the stock market, 401K, IRA, Gold, houses, etc.).  It makes no sense to compare short-term deposits to long-term debt in this situation.  Who gets a house mortgage if you have enough money in a top 50 bank to pay cash for the house?  The Muni debt also needs to be removed – comparing money in the bank (private) with Muni debt (public) just does not make sense here.

Just my 2 cents – have a great day.

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#31) On May 19, 2009 at 11:19 AM, drgroup (68.83) wrote:

Alstry... my hat is off to you. I don't know how you can continue to try to educate the block head cool aid drinkers that have responded to this post. (with exception to a few, and naturaly me)

portefeuille  I hope you don't believe any of this statement...

The United States may emerge from recession as early as this summer, though further job losses mean a "depressed economy" could last as long as five years, Nobel Prize-winning economist Paul Krugman said Tuesday.

Al Gore was given a Nobel prize. That in itself should devalue the relevance of the Noble process.

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#32) On May 19, 2009 at 11:31 AM, UKIAHED (45.88) wrote:

It becomes very clear that America has entered into a MASSIVE DEPRESSION.

 

To make this easier – let’s use some objective numbers.  As I am sure that we would all agree that MASSIVE is bigger than GREAT.  Then America will have passed into a MASSIVE DEPRESSION when today’s numbers are bigger than those numbers of the GREAT DEPRESSION.  Let’s just get 2 numbers – numbers that you like – GDP and unemployment.

To get some prospective –

The Great Depression GDP:

Economic activity began to decline in the summer of 1929, and by 1933 real GDP fell more than 25 percent, erasing all of the economic growth of the previous quarter century

The Great Depression Unemployment:

It is widely accepted that the unemployment rate peaked above 25 percent in 1933 and remained above 14 percent into the 1940s.

 

So, a MASSIVE DEPRESSION would include a drop in GDP of over 25% and an increase of unemployment to over 25% (I will accept U6 here).

 

I will take this challenge – If items 1 or 3 that you mentioned come to pass in the next 12 months (using my objective terms for item number 1) then I will stop blogging.  I will not use number 2 as this is too vague.  Martial law could happen in an environment as simple as an earthquake (think 1906), flood (think Kartina), etc.  Though historic – these events do not portend the end of the US as we know it…

Have a great day

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#33) On May 19, 2009 at 12:42 PM, jddubya (61.57) wrote:

LOL!!!!  What a JOKE!  Ya got me good with that SENSATIONAL HEADLINE!!!!!!!!

If one of the three DOESN'T occur?  That means you'll be blogging for at least another 12 months, which is not bad as long as you can keep up the comedic content of your blogs.

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#34) On May 19, 2009 at 1:46 PM, alstry (35.21) wrote:

Uki...I have no desire to shut you up...simply to think.

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#35) On May 19, 2009 at 3:01 PM, minduza (< 20) wrote:

I don't always like alstry's all negative posts and basically no ideas how to make money, but I appreciate his blogs, because US media is so f***ed up that it makes me sick and angry. It makes people stupid, it makes people one big crowd. When you talk with regular people their opinion is usually the same as you just heard on TV. Thanks god there is internet.

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#36) On May 19, 2009 at 3:14 PM, MikeBobulinski (< 20) wrote:

angus,

My statement regarding martial law and a war that would re-instate the draft has nothing to do with the military as a driving function.  I understand that this would have to be geo-politically driven.  But anything that involves martial law or a war, may cause me to have to leave my home for an extended period.  So, I am very interested to know what Alstry seems to think he knows regarding the geopolitical situation world wide that might cause us to declare martial law within the next 12 months...or go to a war of such magnitude that we would have to start drafting people into the services.

As for the scenarios you presented, they all seem like reasonable scenarios that might induce martial law or a war, but how likely do you think any of those scenarios are?  How likely do you think they are to occur in the next 12 months?  About the only one that has a better chance than the rest would be anything terrorist based triggering a reaction.  The problem with the rest of them, is that the entire world is suffering from the same economic shut down that we are seeing, and no one really is sitting in their office (I imagine) thinking to themselves or outloud..."Let's see, perhaps a global war can solve this economic crisis..."

I just don't see that happening in the next twelve months or longer.  If any one of the antagonists you listed were in a better economic situation and stood to gain from sparking a global conflict, then I might say there is a chance, but the reality is that China, Russia, Iran, and most other countries that have been posturing in the recent past, are up to their eyeballs in the same problems we are and would stand nothing to gain by starting a war that they would be ill prepared to fight or win.  Terrorists...a whole different ball game...

So...my question still stands...how is it that Alstry sees this unfolding?  I want to look back and see if he is right when a year has come and passed. 

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#37) On May 19, 2009 at 8:58 PM, Paxtor (29.05) wrote:

Sigh, we have to endure at least another 12 mnths of alstry blogs

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#38) On May 19, 2009 at 9:32 PM, alstry (35.21) wrote:

Pax,

Don't be so sure...Alstry may be rated 100 sooner than you think.

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#39) On May 19, 2009 at 10:59 PM, angusthermopylae (40.09) wrote:

Mike,

I, too, am interested in what the High Poo-Bah of Alstrynomics has to say about international armed conflict...as far as likelihood or direction.

As for me, I think the chances of any of the listed conflicts are actually pretty low.  Two reasons for this:

1)  You are correct--most folks are in the same bind, and they've got enough  on their hands to worry about.

2)  It would probably be something else that no one expects.  Sure, everyone saw WWII coming...it was obvious, and the Beloved Populace shifted to a war fitting quickly because everyone had been complaining about those damn Krauts and Tojo for months.*  But, did anyone foresee that a single archduke getting blown away would start WWI?  And a straightforward defeat of the French at Dien Bien Phu would lead directly to the US involvement in Vietnam?

 

* Use of 1940s political and racial epithets not intended to convey personal feelings, only to illustrate the 40s mentality.**

**Seriously, I'm a nice guy...please don't sue!  I'm such a mongrel that there's no way I could get away with being a racist bastich.

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#40) On May 20, 2009 at 12:29 PM, OctoStalin (47.90) wrote:

Alstry, I want a strict definition so you can't claim to be right in any situation.

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#41) On June 25, 2009 at 3:25 AM, oSUNo (50.72) wrote:

Depression doesn't matter. The global economy goes on regardless.

You won't find a supreme or federal court judge who would agree to suspend the Constitution. Not for a politician. Not to go down in history as the one who did it. Not in the real world. Not in Washington DC. Not in New York on a summer afternoon before talking to his or her son on the phone about their new grand-daughter's hayfever around cats.

A draft would be no answer to any question.

 

 

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