Saving for a rainy day? More like for a Tsunami

The economic principle is known as “Supply and Demand” but the world seems to be practicing “Demand and Supply.” Today I’m going to depart from focusing only on my own immediate pacification and look at the endemic picture instead. I don’t care if you’re money is in your mattress or if it’s in well diversified holdings, futures and investments – neither one of you has a pot to piss in. Believe me, that pot will need to be huge because you don’t need to be saving for a rainy day – you need to be saving for a Tsunami.

I say this because if you’ve bought into the world-wide financial pyramid scheme and your credit score number is higher than the actual tangible amount of money you have in the bank then you are so screwed. We’re not even talking savings or retirement accounts. Uh-uh.

The consumer-driven economy has spread to every corner of the globe. Now, regardless of national political agendas the common goal is to buy, buy, buy at always inflated promises on the return. There is only so much real “stuff” to go around. Perhaps you are familiar with the shortages in raw materials required to sustain industrialized societies? Let’s see, there’s copper (which is being stolen from public installations such as telephone and utility poles), platinum is definitely next as well as zinc. Oil seems to be popular . . . these are just the building blocks and sustaining components for everything we use and have become accustomed and or artificially dependent upon. There are other minor inconveniences such as food supplies that aren’t able to be maintained. Now, I am NOT among those that claim there are just too many people. I claim there are too many stupid people.

Everyone in this nation as well as every other nation logically wants the best of everything. Are you detecting a pattern? From the time a baby takes the cookie out of their mouth to steal the obviously better cookie in the other baby’s mouth the game is on. Do you really think the current downward economic spiral is going to correct itself? The apocalyptic answer would be, “Yes. Eventually.” I sure hope we aren’t waiting for that result. But, the collapse of a house of cards always comes to rest on very real ground of tested substance.

The world financial institutions are that house of cards.

Let's see - businesses pay employees who in turn spend their salaries in businesses and all of the above pay income into the government in the form of taxes. All exchange a currency whose value is established by the banking industry, regulated by the governments who set the value of the currency. This value is determined by evaluating the products and services of the businesses and setting a worth to each. That’s all somewhat obvious, yes? Well, it helps to squint a little more closely at the obvious every now and again. At one time there was a principle understanding that whether currency was in the form of tiny pebbles, or sea shells or gold coins or linen with the faces of world leaders, or a row of numbers in a ledger that there was something of globally recognized equivalent value – a real thing that was locked away for safe keeping which was represented by the currency. Everything in this system worked well because there was a built-in protection against abuse. Whatever was considered the treasure upon which promises of payment was based was of a known quantity. There was only so much of this good stuff. Everybody knew it. Everybody wanted it but understood there wasn’t enough to go around. The value of the currency had a fixed limit. Throughout history, whenever an individual or a government tried to misrepresent their worth by INFLATING the purported value they held it would eventually become obvious that they were extended beyond their true means and their accounts would only be CREDITED when they could prove they had enough of the good stuff with which to pay.

Many of you are familiar with a classic example - the hapless state Germany found itself, after World War I, whereby the nation was being denied the ability to get real value for their goods and services in a vengeful retribution by the victor nations. The perfectly understandable impetus for the treatment had been that it was necessary to prevent the aggressor an opportunity to use their industry to tool up for future wars. This became a blanket that cloaked the criminal, deliberate artificial devaluation of Germany’s goods and services. In other words, they were being robbed. In desperation, the German government printed more currency than they had real stuff to back it up and this inflated the price of everything only to drive the nation into deeper debt and devaluation. As has too often been the case, it took war to break the cycle.

Credit used to be difficult to procure. This was (and would still be) a good thing. But now the general mindset is that credit is an entitlement – not a privilege. Where did this change? I deliberately referred to the “financial industry,” earlier. These same entities were once known as “financial INSTITUTIONS.” That is a telling distinction. With the cultural shift in business away from producing a product to showing a profit the whole definition of industry changed. So now every imaginable thing became an industry – not just real things. Why? That is because real things have finite quantities. There are only so many real things to go around. If we’re going to maximize profits then we need to make more stuff. The reasoning followed that an infinite amount of stuff meant infinite profit potential.

Everybody could have everything they ever wanted!!!

Problem: Selling pizzas is limited to several things:

1. There is only so much stuff in the world from which to make pizzas
2. There are only so many places where it is possible to make pizzas
3. There are only so many people that want a pizza
4. Pizza is only wanted a limited number of times.
   

Solution: This all changes if instead of selling pizzas you are selling stock in that pizza! You are no longer selling an actual product but the belief in that product. As long as you can create interest you can sell an intangible concept for an actual exchange of currency and make that all important profit.

This concept is a perpetual motion machine. The problem is that perpetuating motion requires constantly refueling the engine. Oops. There is only so much real fuel to feed the imaginary machine.

Everyone wanted the promises made by investing. Every nation and business and institution bought into the ride. Everyone ignored the fine print which said that the possible gains were not guaranteed but the losses would be real. Everyone extended themselves by believing that the perpetual earnings of profit would increase the imaginary value ahead of the very real inflation. Now there are lame efforts to stop the bleeding and dump more money into perpetuating a fantasy.

For the senior class in my Baby Boomer Generation this has all worked out very well; for the junior, sophomore and freshman underclassmen – not so well. The oldest members of the Boomers invested well and invested wisely and then pulled their theoretical profits out of the stock market in the form of very real assets for their very real retirement. Those assets are not coming back. With real there were only so many of them. Also, the Boomers worked when products were real, too. They manufactured and sold physical goods. They also had the benefit of a very real and very large customer base. Consumers of the same status and fiscal strength were there to purchase the real stuff. There is not much real that is made in America anymore. This includes people. Birth rates continue to decrease and workers grow old and die with none to replace them. Instead, the concept might originate for something in the United States but the real product is manufactured in a “developing nation.”

We are no longer developing. Meanwhile, other nations are desirous to have what we have. They’ve figured it out, too. They have industrialized and look like replicas of what we were a hundred years ago. They also are modeling all of our real failures right along with our real successes. We were the largest exporting nation but are becoming a really large importing nation.

We are entirely dependent upon other nations for our real needs. It should trouble you that we do not even manufacture a man’s shirt on our own soil. Hathaway Shirts, started business to supply clothing to the Union Army for the Civil War. They were the only remaining manufacturer of their kind in the United States until they closed their plant about fives years ago. We don’t even make our own clothes!?!?! Aren’t you frightened?

We run to buy things at the most discounted prices possible and don’t even blink that all of it is made overseas. Am I being alarmist? Answer this concern of mine, then. You are aware that most retailers do not make a profit for the entire year until the Christmas holiday season, correct? Retail – by definition – makes no products but only sells those made by others. Yet, retail is one of the only growing markets in our economy. Meanwhile American industries announce their lay-offs and plant closures in that same season hoping to drown the bad news under carols and sparkling lights and offset the real impact on the imaginary stock market while consumers are drunk with spending. Spending beyond their real ability to pay on extended credit into the next year! So, here’s my question. The retailers make just enough profit to survive and pay their employees minimum wage. How is this infusing the economy in a healthy way? The bigger question is after displacing our own people from their jobs and sending those jobs abroad – How many of the Indian Pakistani, and Chinese workers (just to name a few) do their Christmas shopping over here?

It’s obvious that we need to save money wherever we can because we’re pissing it away on gourmet coffees, off road vehicles for one person to commute to the office, spa treatments and gym memberships because we don’t physically work a day in our lives. So rather than perform some honest day of labor in (god forbid) a factory, or growing a crop of grain or doing real, productive work we spend fortunes on How-To seminars and erectile dysfunction pills. I’m so glad that we have our priorities straight and personal gratification comes first.

Rather than deal with anything having to do with self-control and denial of greed and excess we would rather turn our attention to the “feel good” diversion of the day to get the onus off of us and somewhere . . . intangible. (The flavor of the moment is global warming.) As long as we do not have to really do anything personally to correct a problem, only “contribute” . . . We’re good! The more enormous and beyond anyone’s scope to actually fix it – the better.

We have one answer to everything at present and that is, “Somebody throw money at it and make it go away!” Our money is no damn good, people. The stock market is not a bad thing – that’s not my point. The stock market is not real. It’s the literal representation of a bill of goods. There is no secured value behind the numbers. The very institutions established to police greed got greedy themselves. There is no real value behind any of it. The worth is inflated beyond all proportion. Stop worrying about the bubble bursting and start looking at all of the hot air being pumped in to try and avoid the inevitable collapse.

There is a very strange hush all around the halls of government and investment houses and any other venue where money is the business such as insurance companies. If this were a horror movie this would be the eerie silence just before all hell breaks loose.

We paid too much for the pizza; and, the real estate, and the jewelry, and the no interest until next year. We demanded it and “they” supplied it. We and they just happen to be the same person. None of this will stop itself unless we stop it. It will not continue if we don’t stop it but the spin we’ve been fascinated by for so long is becoming unstable. We don’t have enough energy to put into the top to keep it going and it’s getting wobbly and about to take a wild path before it grinds to a halt.

Here’s another example of what has my attention. Three of the largest suppliers of oil, outside of the Middle East, are nations with serious cash deficits. They do not have real resources to back up the expenses they will incur producing oil. They will pass those expenses onto every barrel of oil they produce. The projected impact is that a gallon of gas will climb above $5.50. Stop to consider that oil is also used in plastics manufacturing and chemicals and other products. The fuel to generate electricity will raise the utility bills further of industry and individuals. Just a small for instance: The cost of a bottle of aspirin will climb dramatically because of the cost to produce its plastic bottle and run the automated equipment that makes the product.

No one is in a position to stop using cars, trains, buses, trucks and airplanes. We can’t stop using electricity cold-turkey. We need to keep producing food, shelter and clothing. But everything else that we could give up (but won’t) will suddenly look very stupid compared to barely scraping by to afford to go to work. Now, don’t think that “the senseless war”, or however you refer to Iraq, is stopping you from enjoying better oil prices. The history of the oil producing nations has always been to maximize profits when the demand is the greatest. Guess where we are? Oil is a commodity. The demand is very desirable to build into your commodity to ensure constant and ever increasing demand. Look at something as totally needless as diamonds – yet how desirable and expensive those little pieces of nothing always are. As long as people want something they will pay to have it. The only time somebody wants most things is to know they have it instead of everyone else. Sad; Isn’t it? How angry are you when someone else gets the parking space?

The economic melt-down has come to a full boil and it’s only a matter of time before it erupts. If you are living on credit or in a house that is over valued or have insurance and investments tied to imaginary money you’re in for an awful series of losses. I am living a very austere lifestyle that includes deliberately denying me a few things. It isn’t all wonderful but it is designed so that I don’t lose things that I value more. You know – real substance. I don’t think things are going to get better anytime soon. I would like to do better than barely survive.

Too bad most won’t do what needs to be done. How am I so sure? Let me introduce a concept that will get immediate chortles and giggles . . .

Abstinence.

Ridiculous, isn’t it? You immediately think in terms of avoiding sex and oh how absurdly funny that is. No one could do that. No one would do that. That reaction is why my argument has already been proven. To abstain is nothing more than to not participate. The prevailing attitude of the day is that one should not have to make such choices. We don’t want absolutes. There is no good or bad. No right or wrong. No good or evil. No one wishes to have any restrictions or limitations placed upon them and absolutes need to be dismissed to achieve that goal. We want no constraints and show no restraint. It’s pathetic and it’s weak and it’s beneath our dignity but who cares about dignity when we demand respect? We want what we want when we want it. We refuse to be denied. Little annoyances like being told that supplies are limited only apply to someone else.

What a load of crap. Because of such “thinking” we can’t quit smoking without a chemical pacifier. No one is responsible for their personal problems – instead it’s somehow a public spectacle and a corporate obligation. Nobody has the balls to stand alone anymore. I don’t mean shoot their mouth off; I mean take a stand on principal. Do we have any principles and values that are still based on something real?

One thing is undeniable about abstinence. If you don’t participate in something you don’t suffer its consequences.

The world has substituted opinion for truth. That may not register with you immediately. Truth is one of those nasty absolutes that are denied to exist. If you live in denial you will eventually be confronted by reality but you will not be prepared for the encounter. Don’t wait for someone else to fix this mess for you. Do whatever you have to, now, to make sure your cards are on the table and not up in the air with the gathering storm.