scholastica8

The Shallowest Generation

I think that when coming down on the Boomers, one major thing is forgotten, which is a part of the big historical picture. Our parents were the products of WW1, the Depression, & WW2. Yes, they were the greatest generation, but to paraphrase... much was given to those of whom much was expected. A generation that had learned frugality & thrift benefited from a post-war era in which the US was the only manufacturing economy left standing. The rest of the world was decimated & needed everything. The US itself needed everything. Our advantage was that our manufacturing was then modern & thriving. For that era, our work force was well educated & healthy. Manufacturing labor was in demand & companies paid high wages (much higher than manufacturing ever paid) Plus, the US had all the resources within its own boundaries to take advantage of the situation. Our fathers, returning from war, benefitted from the GI Bill... housing loans & education... plus companies that wanted to keep workers & so offered good pension & medical benefits. Much of that generation still has not understood that the ground shifted under their children's feet.

As a consequence, the Boomers were born & experienced childhood in the "perfect world." That world began to end in the late 1960s, just as the Greatest Generation was retiring... to Social Security payments that bought something & to a medical world that accepted Medicare patients... to defined company benefits.

But, our resources were in decline. Therefore, costs began to increase due to the need to import energy & raw materials. To keep prices down, our manufacturing moved overseas to benefit from cheap labor. Walmart took over... lower prices for people whose wages did not keep up. Free trade took over... with the idea that we would buy cheap products from China & in turn, they would buy our more expensive products with the money we paid them. That didn't work. They didn't buy. Instead, we borrowed.

The idea had been that our manufacturing should be replaced by other types of jobs, but the real benefit of manufacturing jobs is that it allowed people to work at jobs that require a high school or community college or trade school diploma & physical labor. They offered some stability & predictiblity. Many people do not want & cannot handle cubicle jobs. They don't want to constantly pursue more & more education that is outdated as soon as it is learned. They want a paycheck, a work life, & a family & home life.

But that is beside the point. Once our economy lost the manufacturing engine to power the economy & other things did not pan out to replace it, we became a "consumer" society. Consumerism replaced everything else as the economic engine.... Buy! Buy! Buy! Don't stop buying!... Do the patriotic thing... Shop! Consumerism replaced citizenship as the most important thing an American could be.

When we went to war, we were not told to cut back, to ration & sacrifice. To do so would hurt the economy. We were told to shop. It was the shopping that kept the economic engine running.

But it was foolishness. We literally were consuming the planet. The unfortunate part is that this is the ultimate goal of capitalism. Without comsumerism, there is no capitalism. Capitalism & even the very idea of "money" depends upon the sale of product.

Now the Chinese & the Indians will take our place as consumers.... & the world will continue to be consumed.

A new system must arise which does not requre a buyer & a seller. The consumer must be replace by the good citizen.

What Effect Will Hyperinflation Have?

Something else about hyperinflation. The best way to survive it is to get your assets out & yourself out of the country. If that can't be done, even people with loads of hard assets don't come out the other side.

If your hard assets are gold, jewels, whatever, you sell bit by bit at whatever price you can get in order to feed the family, keep the lights on, etc. There may not be that many buyers because only the truly wealthy will have cash to spend on anything but necessities. So, more likely you barter whatever you have that someone else might need, for something that you need.... but it will have to be local because shipping fees will be skyhigh.

If you have hard assets in the form of oil stocks, gold ETFs, Swiss Francs ETFs whatever, you end up having to sell those off to make ends meet. Most affluent people, unless you are super wealthy, in which case you escape the country, can hold out for about 3 years. This is usually the point at which a government issues new currency.

What Effect Will Hyperinflation Have?

Hydrogen Bob.... The problem with the idea of switching to more products made here, more home-grown oil production, etc. is that if we do hit hyperinflation, the costs of raw materials will skyrocket. The price of a barrel of hyperinflated oil, may not keep pace with the cost of producing that oil. Most of our Chevys have parts produced outside the US. Will there be the money, at hyperinflated prices, to retool factories, to purchase the raw materials, etc.

Another difficulty is that if we do hit hyperinflation with super expensive gasoline, will workers be able to get to work? Cities, like citizens, won't be able to afford to run mass transit.

We are in scary times.

The New Normalcy

Anybody remember the "Ownership society"?