The Shock of a New Paradigm
"Adapt or perish, now as ever, is Nature's inexorable imperative." -- H. G. Wells
Having climbed back up only part of the way to the level it achieved at the peak just five years ago, the economic roller-coaster has rolled precariously close to the point preceding the next mega-drop. The ride operators obscured the view of the patrons and made promises of only mild declines ahead. Among even the experienced riders who know something steeper approaches around that next bend, most hold the view that the worst of the ride is already behind them. Just about no one expects that the coaster itself may be about to fly off the rails as it succumbs to the irresistible forces of gravity, throwing off its riders into the abyss as it plunges headlong towards terra firma. But this is precisely what is about to happen starting later in 2012 - the year when it actually hits the fan - SHTF, that is!
The riders will be incapable of adapting in time to the extreme twists, turns and drops that come up suddenly in the next phase - one over which the operators have no control, despite their false claims. When the safety and support systems then fail due to fundamental flaws in engineering, the trusting riders will be dismayed - as key elements of the supply lines no longer function. Everyone on board will come face to face with the real purpose behind new rules recently enacted by the ride operators!
Sheep to the Slaughter: Americans Raid Savings Accounts to Stay Afloat and Maintain the Dream
As we’ve suggested previously, the economic destruction following the collapse of 2008 is slowly, but surely taking its toll, forcing many people still holding on to a paradigm of consumption to dip into cash savings, retirement accounts and personal credit lines:
More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.There’s nothing to be puzzled about here.
In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.
Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.
American households “have been spending recently in a way that did not seem in line with income growth. So somehow they’ve been doing that through perhaps additional credit card usage,” Chicago Federal Reserve President Charles Evans said on Friday.
“If they saw future income and employment increasing strongly then that would be reasonable. But I don’t see that. So I’ve been puzzled by this,” he said.
…
“Today, the saving rate is falling out of necessity. Food and energy prices have risen and folks don’t have as much money to spend on the things that they would like.”
Just as Americans used to borrow against the value of their homes before the property crash, now many are taking out loans from their 401(k) retirement savings plans.
Almost a third of plan participants currently have a loan outstanding, according to an upcoming survey of 150,000 holders of 401(k)s by consulting firm Aon Hewitt.
Source: Reuters
There are over 25 million people in this country whose jobs have been destroyed by economic malaise and outsourcing to foreign companies. Monetary easing and other financial machinations have forced the price of essential goods like food, gasoline and life-saving services through the roof.
Americans, still living in a world where we identify ourselves by the products we wear, what we drive and how we entertain ourselves, haven’t yet realized that the consumptive paradigm of the last 30 years is coming to an end. The majority of people, even those going through financial hard times, simply bury their heads in the sand in an effort to avoid the reality that the economy is on a trajectory as bad as, if not worse than, the Great Depression.
But, while they may be making less money – or no money at all – everything is still OK – it has to be – because the Jones family across the street always has the latest gadgets, goes on luxurious weekend getaways, eats out regularly, and they even bought a new car last month. So, if the Joneses can do it, then the economy and financial markets must really be in recovery just like those experts say on television.
On top of that, this is America, the richest nation on Earth, and its managed by the best, brightest, and most benevolent. We may have had a slight down-turn, but those people in Washington and on Wall Street know what they’re doing and they’ll make sure nothing goes wrong again.
Since all of the experts say the recession is over and everything will be returning to normal – including more jobs and regular pay increases – there’s nothing to lose.
Unsuspecting Americans being led, yet again, to financial slaughter (and perhaps worse), are willing to take the experts on their word. They’ll pull money out of their retirement accounts, bank savings account, even take on more debt than ever before, just to stay afloat in anticipation of that job, wage increase and ‘return to normal’ they’ve been promised.
This, of course, is a dream world, but millions upon millions of Americans (and Europeans too), believe that all of the fundamental problems responsible for the global meltdown a few years ago have been resolved. They still have faith in a false paradigm that has already collapsed.
The tragedy of it is that they will spend everything, believe everything they’re told, and do whatever their elected masters tell them, until they are eventually left with nothing. No financial stability. No accumulated wealth. No liberty.
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