Collapse of Empires

Collapse of Empires
Episode 1

Setting the scene

Imagine you are the Russian tsar, circa 1914.  Would you foresee that entering World War I might result in the collapse of your entire empire?

Imagine a Laurel and Hardy movie.  It has  a simple and timeless plot - every problem generates an action which creates a bigger problem.

A trillion here, a trillion there, adds up to real money - to paraphrase Sen. Everett Dirksen.

I defined trimagna to refer to the way politicians count money.  They focus on every 3rd order of magnitude.  Million, Billion, Trillion.

It takes a big person to squander a trillion dollars.

Democrats yearn for the chance to invest a trillion in universal health care and another trillion to stop global warming.

Republicans seized the opportunity to dump a trillion in the War in Iraq and, now, the financial crisis.  Ever the innovators, they invented pre-emptive squandering.  Squander unto others before they squander unto you.

Where are the visionaries?  Who will be first to waste $10 trillion?  How many airports, museums, and statues will be dedicated to the first person to waste $100 trillion?

Some perspective

• Gas prices

Suppose you used to pay $30 a week for a tank of gas.  After price increases you pay $50 per week.  That's $20 per week x 50 weeks equals about $1,000 per year.

• Financial bailout

A trillion dollars divided by 100 million taxpayers is about $10,000 per person.  Basically, gas prices will produce 1/10th as much pain as the bailout.

• Personal control

The other difference is you can make changes that mitigate the gas problem.  You can drive a small car, you can carpool, you can take a bus, you can conduct sales meetings over the internet.

There may be little or nothing you can do to avert the economic impact of the financial tsunami.

Houston, we have an anomaly

As India and China are moving towards market economies, America is moving towards Marxism aka socialism aka liberalism aka progressism.

Sometimes a new technology like the internet blossoms just in time to compensate for political stupidity.  Unfortunately, most of the new opportunities like gene splicing and space travel are more likely to gestate oversees.

How stupid are we?  The Congress passed a $600 tax rebate stimulus package but did NOTHING to remedy the financial meltdown.  The whole system is operating at the competency level of the Metrolink engineer who crashed head-on with a freight train.

Buy gold and act like you were in the middle of the Great Depression

Things will definitely get worse before they get better.
 

- CarlD            September, 2008