Time magazine, June 18, 2012. Your Global Economic Mess Is Now Being Served by Rana Foroohar. Article descibes fragile state of U.S. economy, a looming real estate bubble in China, and the Eurozone mess. It is commented that the U.S. economy has become very sensitive to external shocks, and that Europe may soon deliver one.

The demographic implosion which most practical analyses forecast to occur mid to late this century, is possibly already driving macro economics. The most wealthy nations are already in demographic retreat and the middle income nations are nearly in retreat. The remaining poor nations, while still fecund, don't have the spending power to make much of a difference. And also, the poor nations are really hurting now due to the global de leveraging and most recently the popping of the hyped up commodity bubble. Net net, futures are obviously not indicating continuation of growth and massive defensive tactics are ruling the day. Triple dip here we come.

Scroll down to the Oct. 3 post by Matt 1989. It was commented that with the Civil War bubbles became correlated with the saeculum.

Safety Net by James K. Glassman: "Consider liquidity-that is, the condition of easy sales and purchases of investments. It's something we take for granted, at least as far as most stocks and bonds are concerned. But the Harvard historian Niall Ferguson reminds us that less than a century ago, liquidity quickly dried up on the world's key exchanges: Buoyant financial markets had initially shrugged off the assassination of Archduke Franz Ferdinand, the heir to the Austrian throne, in the Bosnian capital, Sarajevo. But Austria's tough ultimatum to Serbia sparked both a geolpolitical and a financial chain reaction. As traders and investors suddenly grasped the likelihood of a full-scale European war, with Russia taking the Serb's side, liquidity was sucked out of the world economy...Perhaps the most remarkable feature of the crisis of 1914 was the closure of the world's major stock markets for up to five months. The Vienna market was the first to close, on July 27. By July 30 all the continental European exchages had shut their doors. The next day, London and New York felt compelled to follow suit. Although a belated settlement day went smoothly on November 18, the London Stock Exchange did not reopen until January 4. Nothing like this had happened since its foundation in 1773. The New York market reopened for limited trading (bonds for cash only) on November 28, but unrestricted trading did not resume until April 1, 1915.

Was talking to a gentleman I am very slightly aquainted with...I believe his professional background is avionics...who has studied topics such as banking and stocks. He predicts that we will see a stock market crash within four years.

But why 4? why not 5? 6.5?

It seems like these events are so cleanly tied to political and administration years.

Originally Posted by millennialX

But why 4? why not 5? 6.5?

It seems like these events are so cleanly tied to political and administration years.

There are many cycles in this world, and the poitical cycle is only one. The saeculum is another - that's why we're here. There are also well known economic cycles, and Mikebert is the most knowledgable member of the forum on how they operate and to what extent they link or don't link to other cycles.

The Wiki-link I provided is information at its most basic. If any of this interests you, you need to dig a lot deeper.

Originally Posted by millennialX

But why 4? why not 5? 6.5?

It seems like these events are so cleanly tied to political and administration years.

The most usual number I've heard between major economic crashes and downturns is 40 years. 2008-2011 might fit into a scenario like that; if you take 2010, then 40 years ago was 1970, which was a downturn powered by layoffs in the defense industry; 1930, 1890 (panic of 1893 preceded by economic problems), 1850....

Other recent panics and recessions besides 2008-10 include 2001, 1987(panic)/1990-92(downturn), 1979-82, 1973-75, (1970), 1959/61, 1946, 1937, (1930), 1919, 1907(panic), 1900, (1893), 1873, 1857, 1837; I don't detect any regular cycle in those. In more difficult times like ours, they may be more frequent; in more prosperous times like the 1950s and 60s they are less frequent. A rule of thumb might be about 10 years, but 4 years apart is rare.

My estimate is for another downturn at the end of this decade. If you've been paying attention, you know my prediction record is good.

The New Depression The Breakdown of the Paper Money Economy by Richard Duncan The author states that the present economy situation got started when the U.S. dollar went off the gold standard back in 1968,

The New Depression What could trigger a New Great Depression? Duncan considers two possible causes: A banking crisis, or protectionism. The results of either would echo the original Great Depression.

Duncan considers protectionism, which would provoke retalitory tariffs by other countries. A trade war would cause global trade to contract sharply. As exporters, industrialized Asian countries would suffer. China would be particularly hard hit-their production could not be afforded by their low wage work force. Businesses would fail. China would have a severe depression. Of course, China's imports would contract, harming commodity producing countries such as Australia, Brazil, etc. Also hard hit would be Germany, Japan, and Korea, which had supplied China with higher value-added products.

Duncan says that hyperinflation could ravage fiat currencies, and international finance would collapse.

Duncan considers geopolitical consequences. If the USA feels compelled to retrench, many overseas military bases may close, after a cost-benefit analysis. This would likely mean a retreat from Asia. Concievably, Europe may also be abandoned. What may happen post-Pax America?.

Duncan considers three basic options for the U.S. gov't: 1. Austerity. This would definitely mean a New Great Depression. 2. Status Quo. Borrowing and spending to prop up consumption. This kicking-the-can-down-the-road expedient would delay The New Great Depression. 3. Rational Investment. The gov't borrows and invests, the idea being that the creation of productive assets will eventually result in a viable economy.

You may have noticed a little problem for Europe-if an exporting country such as Germany can no longer export (because customers are now mired in economic collapse), who will bail out countries such as Greece?

Originally Posted by TimWalker

Duncan considers three basic options for the U.S. gov't: 1. Austerity. This would definitely mean a New Great Depression. 2. Status Quo. Borrowing and spending to prop up consumption. This kicking-the-can-down-the-road expedient would delay The New Great Depression. 3. Rational Investment. The gov't borrows and invests, the idea being that the creation of productive assets will eventually result in a viable economy.

I recently came across this book again in the public library. To elaborate:

Option 1-Austerity. Essentially the government does little to stop a death spiral of the economy.

Option 2-Propping up the economy. Eventually you get to the point where kicking the can down the road is no longer feasible, the means to do so are exhausted.

Option 3-Government invests in productive new endeavors.

Been thinking about Option 3. One possibility would be to start the transition away from fossil fuels. This would require a huge effort over several decades. Not a quick or easy fix. But in the short run it would put many people to work; in the long run it would help to alleviate multiple problems, from pollution to foreign policy. It could have a multiplier effects in the economy, in which employment by an energy industry would tend to result in jobs in other fields, that is, people in other fields providing goods and services for those employed in the energy industry. There are possibilities in which the "wastes" (such as waste heat) become feedstock for other industries.

Another possibility would be fixing up the old infrastructure. The basic infrastructure that under pins the economy, such as roads, bridges, sewers. These are wearing out, and must be addressed soon.

Also, I can imagine a revived Civilian Conservation Corps. Might do some long term good.

If we actually do option 3, it will only take a decade for the transition. If we do option 1, then it will take 3 decades. But it will happen regardless. It just depends on how many humans and how many species we'd like to wipe out.

Back in September I drove from Albuquerque, New Mexico to Seattle. In several places I noticed forests of wind turbines, huge suckers.

The author suggested solar panels as an industry to invest in. I would suggest pursuing a diversity of options, including wind power, hot rocks geothermal, etc., etc. and so on. Don't put all your eggs in one basket.

Originally Posted by Eric the Green

If we actually do option 3, it will only take a decade for the transition. If we do option 1, then it will take 3 decades. But it will happen regardless. It just depends on how many humans and how many species we'd like to wipe out.

Eric, You simply don't know what you're talking about here. Option 3 is a great option, but we don't get there in 10 years. Even on a war footing we wouldn't make it that fast. We only know how to do some of it, and the part we need to explore is expensive.

... and no. Putting up a few windmills and solar panels will not get it done. We need a full system deployment including a smart grid, which we've never tired before.

Originally Posted by Marx & Lennon

Eric, You simply don't know what you're talking about here. Option 3 is a great option, but we don't get there in 10 years. Even on a war footing we wouldn't make it that fast. We only know how to do some of it, and the part we need to explore is expensive.

... and no. Putting up a few windmills and solar panels will not get it done. We need a full system deployment including a smart grid, which we've never tired before.

Hillary says we can get 33% there by 2027, according to her plan. So that's at least getting closer to there. I assume Republican resistance may be a part of her calculations; she is not naive about that, as she said in the debates.

Putting up a few windmills and solar panels will not get it done, NO! We need to put up millions of them, and fast! THAT will get it done! Or go a long way. If we get most of the way, it won't matter if some applications, like heavy shipping and flying, take longer. We know how to do it, which is not to say that efficiency isn't improving all the time. It is. And so is battery storage of energy, which helps make it more baseline.

How much grid updating we need, I'm not sure. But we've been doing a lot of that too. You forget what I said, that solar panels on homes, a huge part of this transition, will obviate the need for a lot of grid improvements. Windmills on homes is another frontier that hasn't taken off much yet, but will.

If we hope to get this done even in 3 decades, we need to DEMAND that it be done in ONE. Then at least we have a shot at breaking the resistance, and mitigating at least some of the effects of the 35/40-year postponement which the Republicans imposed upon us. The problem is entirely political.

You tell me not to underestimate the tech difficulties; I'm saying don't underestimate the political ones.

Originally Posted by TimWalker

I recently came across this book again in the public library. To elaborate:

Option 1-Austerity. Essentially the government does little to stop a death spiral of the economy.

Option 2-Propping up the economy. Eventually you get to the point where kicking the can down the road is no longer feasible, the means to do so are exhausted.

Option 3-Government invests in productive new endeavors.

Been thinking about Option 3. One possibility would be to start the transition away from fossil fuels. This would require a huge effort over several decades. Not a quick or easy fix. But in the short run it would put many people to work; in the long run it would help to alleviate multiple problems, from pollution to foreign policy. It could have a multiplier effects in the economy, in which employment by an energy industry would tend to result in jobs in other fields, that is, people in other fields providing goods and services for those employed in the energy industry. There are possibilities in which the "wastes" (such as waste heat) become feedstock for other industries.

Another possibility would be fixing up the old infrastructure. The basic infrastructure that under pins the economy, such as roads, bridges, sewers. These are wearing out, and must be addressed soon.

Also, I can imagine a revived Civilian Conservation Corps. Might do some long term good.

GO! Bernie Sanders!!

Originally Posted by TimWalker

You may have noticed a little problem for Europe-if an exporting country such as Germany can no longer export (because customers are now mired in economic collapse), who will bail out countries such as Greece?

The Germans need to understand that they can't export their economic woes. They need to attack them directly. Unfortunately, Angela Merkel seems uniquely incapable of understanding that inescapable fact.

Originally Posted by Eric the Green

Hillary says we can get 33% there by 2027, according to her plan. So that's at least getting closer to there. I assume Republican resistance may be a part of her calculations; she is not naive about that, as she said in the debates.

Hillary is a lawyer, not a technical person in any sense of the word. She understands the top layer, but the devil is in the details ... as always. At that, a third of the way in 12 years is feasible, but it will be the easy third.

Originally Posted by Eric ...

Putting up a few windmills and solar panels will not get it done, NO! We need to put up millions of them, and fast! THAT will get it done! Or go a long way. If we get most of the way, it won't matter if some applications, like heavy shipping and flying, take longer. We know how to do it, which is not to say that efficiency isn't improving all the time. It is. And so is battery storage of energy, which helps make it more baseline.

Millions of anything is never trivial. Windmills are precision propellers with high-efficiency generators attached. The propellers can't just be made anywhere by anyone, and the generators use rare-earth magnets, which, being 'rare' are in limited supply. Solar is similar, in that the solar devices are either composed of rare - in some cases toxic - materials, are grown in precision ovens like computer chips or are very low efficiency. None of that is trivial either.

Originally Posted by Eric ...

How much grid updating we need, I'm not sure. But we've been doing a lot of that too. You forget what I said, that solar panels on homes, a huge part of this transition, will obviate the need for a lot of grid improvements. Windmills on homes is another frontier that hasn't taken off much yet, but will.

Scaling home solar to a level that it will produce even 10% of the energy we need is constrained in the same manner that commercial solar is constrained. There is also the issue of disposal. None of these things lasts forever, and no recycle system exists at this point.

I'll leave discussion of the smart grid to another day.

Originally Posted by Eric ...

If we hope to get this done even in 3 decades, we need to DEMAND that it be done in ONE. Then at least we have a shot at breaking the resistance, and mitigating at least some of the effects of the 35/40-year postponement which the Republicans imposed upon us. The problem is entirely political.

You tell me not to underestimate the tech difficulties; I'm saying don't underestimate the political ones.

Kennedy challenged us to go to the moon in a decade, and we did. That was a limited though highly technical undertaking. Here, the challenge is both technical and scale. We're not going to the moon, We're building the Interstate highway system - along with the equivalent in all the other nations of the earth.

Originally Posted by Marx & Lennon

Hillary is a lawyer, not a technical person in any sense of the word. She understands the top layer, but the devil is in the details ... as always. At that, a third of the way in 12 years is feasible, but it will be the easy third.

You can underestimate Hillary's personal appeal and fault her smarminess, but I would not underestimate her wonkiness. She is bright and knows details like a champ; much like her husband in that respect.

Millions of anything is never trivial. Windmills are precision propellers with high-efficiency generators attached. The propellers can't just be made anywhere by anyone, and the generators use rare-earth magnets, which, being 'rare' are in limited supply. Solar is similar, in that the solar devices are either composed of rare - in some cases toxic - materials, are grown in precision ovens like computer chips or are very low efficiency. None of that is trivial either.

But they are already being manufactured by the millions. Efficiency of solar cells is being improved all the time. You need to keep up with the tech before knocking it.

Scaling home solar to a level that it will produce even 10% of the energy we need is constrained in the same manner that commercial solar is constrained. There is also the issue of disposal. None of these things lasts forever, and no recycle system exists at this point.

Recycling is being worked on. There's no need for recycling yet.

An area of 100 miles by 100 miles in the desert would provide most of the nation's energy needs. Imagine 10 or 100 times more buildings with solar panels on them. That would cover more than that area.

Kennedy challenged us to go to the moon in a decade, and we did. That was a limited though highly technical undertaking. Here, the challenge is both technical and scale. We're not going to the moon, We're building the Interstate highway system - along with the equivalent in all the other nations of the earth.

The interstate highway system was built on the same time frame as going to the moon, if not faster. And we aren't going to be doing all the work for the other nations; we can advise and help finance it, but they will do the work.

Originally Posted by Eric the Green

You can underestimate Hillary's personal appeal and fault her smarminess, but I would not underestimate her wonkiness. She is bright and knows details like a champ; much like her husband in that respect.

She's bright, but not technical.

Originally Posted by Eric ...

But they are already being manufactured by the millions. Efficiency of solar cells is being improved all the time. You need to keep up with the tech before knocking it.

Even the Germans, who are way ahead on this, know that solar is still a cottage industry.

Originally Posted by Eric ...

Recycling is being worked on. There's no need for recycling yet.

Solar cells have a lot of nasty stuff in them. Waiting is not an option. Cadmium and Selenium are particularly concerning.

Originally Posted by Eric ...

An area of 100 miles by 100 miles in the desert would provide most of the nation's energy needs. Imagine 10 or 100 times more buildings with solar panels on them. That would cover more than that area.

We've done this a hundred times. To use the desert, you need the most advanced smart grid you can get ... which is still theoretical at this point. Add to that, there is no baseload. The sun doesn't shine at night, and batteries are a non-starter.

Originally Posted by Eric ...

The interstate highway system was built on the same time frame as going to the moon, if not faster. And we aren't going to be doing all the work for the other nations; we can advise and help finance it, but they will do the work.

The Interstate system was begun in 1956 and declared finished in 1992 - though some routes had to be abandoned to get to the point. That's 36 years.