Comments on: What If the World Economy Goes Into a Long, Slow Slump http://www.dailyreckoning.com.au/world-economy/2008/08/14/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 17:27:32 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Jason, Bondi http://www.dailyreckoning.com.au/world-economy/2008/08/14/comment-page-1/#comment-35489 Jason, Bondi Sat, 16 Aug 2008 09:53:20 +0000 http://www.dailyreckoning.com.au/?p=3312#comment-35489 If the USA goes into any sort of slow down it will collapse. It has no safety net for any rapid expansion of unemployed and poor people. Most Americans are accustomed to lots of food, high standards of living and materialism, even the immigrants go there thinking the place is full of opportunity and unbridaled wealth. America will crash into depression (and so will we) as a result of declining oil production and excessive debt. The "Japan style decline" simply means "stagflation", and that is a precursor to the Second Great Depression. With even a small percentage of the American population being hurled into unemployment and poverty, the country will devide along its already unstable racial lines and plunge into ethnic war-it happened to Yugoslavia during the 1990-1993 recession, and it will happen to America, especially if they start going hungry. If the USA goes into any sort of slow down it will collapse. It has no safety net for any rapid expansion of unemployed and poor people. Most Americans are accustomed to lots of food, high standards of living and materialism, even the immigrants go there thinking the place is full of opportunity and unbridaled wealth.
America will crash into depression (and so will we) as a result of declining oil production and excessive debt. The "Japan style decline" simply means "stagflation", and that is a precursor to the Second Great Depression.
With even a small percentage of the American population being hurled into unemployment and poverty, the country will devide along its already unstable racial lines and plunge into ethnic war-it happened to Yugoslavia during the 1990-1993 recession, and it will happen to America, especially if they start going hungry.

]]> By: Chris in Bronte http://www.dailyreckoning.com.au/world-economy/2008/08/14/comment-page-1/#comment-35242 Chris in Bronte Fri, 15 Aug 2008 00:55:16 +0000 http://www.dailyreckoning.com.au/?p=3312#comment-35242 Bill, I applaud your flagging this clear possibility. But I disagree that the "US Feds will not allow the long slow Japanese decline"... in practice, the US Govt will likely only have three choices: 1) inflate its way out of its huge governmental and household debt problems over many years; 2) drastically reduce the social safety net of Government programs causing the Federal Deficit (namely Medicare, Social Security); or 3) Default on its debt to global markets. I fear the easiest is #1, but the people will baulk at that until the writing is on the wall. In the meantime, #2 will occur over the objections of the elderly lobby; then #3 will occur in the final gasp. Argentina in 1930, was the world's 4 wealthiest nation (per capita), and since has inflated, defaulted, and jilted its social safety net dependent numerous times. Today it is a shadow of its former self, with only 2-3% of people having any meaningful financial security. I fear this destiny for the USA, though the burden will fall on the next 2-3 generations and not the Boomers who created this plague of the locusts. Bill,

I applaud your flagging this clear possibility. But I disagree that the "US Feds will not allow the long slow Japanese decline"... in practice, the US Govt will likely only have three choices: 1) inflate its way out of its huge governmental and household debt problems over many years; 2) drastically reduce the social safety net of Government programs causing the Federal Deficit (namely Medicare, Social Security); or 3) Default on its debt to global markets.

I fear the easiest is #1, but the people will baulk at that until the writing is on the wall. In the meantime, #2 will occur over the objections of the elderly lobby; then #3 will occur in the final gasp.

Argentina in 1930, was the world's 4 wealthiest nation (per capita), and since has inflated, defaulted, and jilted its social safety net dependent numerous times. Today it is a shadow of its former self, with only 2-3% of people having any meaningful financial security.

I fear this destiny for the USA, though the burden will fall on the next 2-3 generations and not the Boomers who created this plague of the locusts.

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