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alstry (35.36)

We All Fail

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July 05, 2010 – Comments (2)

Practically the entire American, and much of Europe's economy is based on consumption.  Our entire culture, livlihoods, and wealth is based on massive credit based consumption.  Without trillions in credit extended each year, we really would not have very much consumption or production. 

It has now become the primary difference between developed nations and less developed nations.  The clearest example of debt driving consumption and production is the over 80% collapse in new home construction once easy credit was pulled from mortgages.

Absent exporting some grain, chemicals, and a little machinery....our primary export by container volume is waste paper and scrap metal....or trash.  The trash of our consumption....which exceeds all of our other exports by volume...combined.

Initially our consumption was based our production, then switched to loaning money to the private sector to consume, and in the last year, the primary borrowing as switched to the government.

Without consuming, America has practically no economy, and without borrowing, we can't consume very much under the current system.  Today government is handing money to tens of millions simply so they can consume.  Without those people consuming massive amounts of health care, food, and other goods and services.....our economy would implode.

The United States of America is like one big condo association, if simply enough members can't pay their association dues.....the entire association fails.  As credit and consumption continues to be cut back, conspumption will evaporate and so will our economy.

Our cost structure is not structured for low consumption......and as more and more fail, the entire system will collapse.

The key question is how are the remaining assets/production of the nation allocated when the entire nation's economy collapses?  When the world's economies collapse?

Will people fight each other for their consumption/production?  Will nations?

As this issue confronts the world.....you think a gun or small farm will address the systemic collapse of consumption.....who do you think is going to support governments, politicians and bankers? 

My guess is governments will be forced to take over production for a period of time and restructure economies until we can settle on a durable sustainable system.  In that environment, money is force......and no one has the power of force like government.

Welcome to the Digital Age...where the world tranforms from debt based consumption industrial economies into knowledge based digital economies. The trend is clear, the process is very uncertain.

2 Comments – Post Your Own

#1) On July 05, 2010 at 11:03 AM, alstry (35.36) wrote:

We can succeed if we restructure debt.....and convert to a production based system.  We must drive production based on others production and not based on debt.

Once money becomes simply a product of debt, production eventually has little value as money is simply a derivative of production....and the producers stop accepting money in exchange for their production.

To further that end, I will participate in trying to drive production in the most efficient manner to the world.  By being able to deliver quality production at the most efficient prices to the best producers, more money is left over to drive additional production.

My primary focus will be centered around digital and lifestyle enhancing products....as it is our production and thought that separates humans from animals.

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#2) On July 05, 2010 at 4:41 PM, dinodelaurentis (74.70) wrote:

I discussed the state of the USS Enterprise with a neighbor that is stationed on it today. They (the Navy) has spent $662 million on retrofitting and upgrades in the last two years. And now the plan is to decomission her.

Sounds normal to me. Get her ready for mothballing, and when that does not holdup over time, get her to a Museum to be built back to sailing readiness. Like we did with many WWII Battleships, carriers and conventional subs.

In a world wide barter economy they make great gifts! The US has so many things for conflict!

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