Wednesday, October 13, 2010

In Praise of Technology - Conclusion

The point of the couple of articles in praise of technology wasn't to just sit and say "wow, this is neat".  The point is that when the economy collapses and we are forced into small tribal structures, someone needs to know how to do stuff.  Someone needs to know how to get it working again.

That someone is us. 

We need to know how to build things, and how to fix things.  We need to have ideas of how to get many things going again.  And we need to know how to survive in somewhat primitive - or desperately primitive - circumstances. If you already can build a wood deck, for example, learn how to frame a house.  If you can drill and tap screw holes in metal, learn to weld.  Let's learn new things.  In addition to how to fend off the Mutant Zombie Biker hordes. 

I truly hope we don't have a total collapse of civilization.  My hope is that the society remains, but like that quote from Ferfal in the second part says, society gets coarser, crime gets worse, electricity gets spottier, and life simply just gets harder in every way.  Perhaps that's best case.  I have to admit that years of working in an air conditioned environment has made me almost dependent on it.  Even the hours I've spent out riding my bike or fishing or hiking (or whatever) hasn't prevented it.  I really need a cool room to sleep comfortably.  In the summer around here, temperatures can stay above 80 all night, or only dip below for a couple of hours before dawn (6AM).  I expect some tough times if energy supplies get really spotty.  I also expect that after a few days of not sleeping, I'll pretty much just pass out. 

Tuesday's Business Insider has a column by Christopher Whalen of Institutional Risk Analytics saying "The Fed's Zero Rate Policy is Destroying America".  He points out one of my (sounding like a broken record) points: the inflation they are pumping into the system is destroying "grandma".  Not just those who are currently retired, but those who are trying.

Last week The IRA traveled to Washington D.C. to participate in the latest event sponsored by our friend Alex Pollock at American Enterprise Institute, "Living in the Post-Bubble World: What's Next?" We received a great deal of media buzz before and after the event, but the most poignant comment came in this unexpected and very disturbing letter from Dianna in Rockford, IL:
"I have no way of knowing if this message will ever actually reach you. Nevertheless, I want to extend a most sincere message of appreciation for one of the comments you made during recent participation in an American Enterprise Institute symposium. You are the only financial guru /analyst whom I have heard make any reference to the devastating impact of extraordinary quantitative easing on "grandma" and her carefully laid financial plans. Many middle class retirees have no generous government or corporate pension. We have had to plan and save prudently for retirement. Now, as we watch returns on CD's plunge from an average 5% to an anemic 1.5%, we also experience a plunge from a comfortable retirement into a state of severe "penny-pinching". You were correct...not only do we have to cut back on gifts for the grandchildren, we are also drastically curtailing many discretionary purchases, travel to spend time with family and so forth. I have heard NO other analyst speak to this impact on responsible retirees who thought they had done all the right things to prepare for the "golden years". It just felt good to realize that there is at least one individual who has given any consideration to this fallout from "Fed" policies."
If you are a saver, the Fed has crosshairs on you.  Your savings are going to be destroyed.  Again, they believe the way to save the government is to inflate the currency; you and I are just collateral damage.  Don't worry, they'll throw you a bone.  Or a strip of leather to chew on.  Whalen also predicts the collapse of the Fed in that article, but from legislation not from economic effects.  I have read the other way around, also.  Remember, this is the "richest" organization in the world.  In many ways the US government is a wholly-owned subsidiary of the Federal Reserve Bank.  Do you think they go down without a fight?  Do you think mere laws will do it?  They have already ignored court rulings and other legal decisions.  It seems to be one of those situations where no outcome is "good". 


  1. This is just a idea, anyone that has a nest egg of cash/savings account or CD as soon as they mature or if they are really worried about inflation to withdraw the majority of that cash, savings, etc. and invest in Hard currency Gold or Silver preferably as it will be easier to cash in when they will need to have parer currency. Of course if things get so bad that Food becomes more valuable than Gold or Silver we are all screwed no matter what you have done.


  2. I have heard that 22LR will be the pocket change of the coming "economy." I've converted a great deal of my savings into things that will either be barterable or will enable me to obtain/make items that are barterable. The only way I can see to perserve wealth is to put it into things that the .gov can't steal (at least not without a high cost in blood).

  3. Both Event Horizon and Dennis308 are absolutely right. During periods of hyperinflation, like the Weimar Republic, people got rid of cash and got tangible assets as quickly as possible. It doesn't have to be gold or silver, but my guess is that silver coins or small caliber ammo will be the "coin of the realm", it could be canned foods, or shoes, or any other necessity that might be useful to you or useful as trade. Gold will simply be too valuable to walk around with. If an ounce is worth $5000, what do you buy with it?

    Think about people who need their Prozac, or who can't buy cigarettes or booze. What will they do to get some?

    Remember those stories about trading chocolates or cigarettes during WWII? That might be the new normal.

    If food is just not available at any price, well, I sure hope we can fish or hunt or grow food.