Dec 072011

There are a lot of people, myself included, who can’t believe that the central banks have been able to keep things going so long by kicking the can down the road. “Kicking the can down the road” idiomatically means to defer something; to put something off. What has been deferred is world-wide economic collapse.

A woman named Ann Barnhardt has been in the news recently because she closed down her commodities brokerage in the wave of the MF Global scandal (where they stole a bunch of clients money and have yet to be jailed for it, or even charged). Ms Barnhardt believes the credibility of the commodities market has been destroyed. Furthermore, she thinks that the attempt to bail out Europe is just a matter of “kicking the can down the road.”  In a recent interview she said, “At first it was kick the can down another 10, 12 years. Then it is kick the can down the road for another year. And then it was well, let’s kick the can down the road for another few months. Now we’re literally to the point where all we can do is kick the can down the road for a matter of a few days. It’s not going to make it. I will be very surprised if we make it until Christmas.”

I believe she is talking about this Christmas; as in a couple of weeks from now. Barnhardt says that bailing Europe out completely would cost 100 trillion dollars which is more than the world wide GDP.

Of course, doom and gloomers have been making these kinds of predictions for some time and the can keeps bumping down the road. Can it go on forever?

I’m guessing that most people haven’t given much thought to the possibility of total economic collapse whatever that might mean. A handful have made some kind of preparation for the possibility. Part of the problem is that we really don’t know what is going on. For example, until recently we thought that TARP was an 800 billion dollar bailout. Now we know the banks were given $7.7 trillion on which they made enormous profits.

The Transition Movement started based on the specter of Peak Oil and Climate Change and how that might affect the way of life we have enjoyed since WWII. Economic disaster seems like a much more likely possibility.

Ann Barnhardt details her particular POV about the lack of integrity in our economic and legal system. I highly recommend her interview for content and even entertainment value.

We have just seen an actual confiscation of wealth (MF Global). Time to pay attention.


  11 Responses to “Kick the Can”

  1. Thanks for addressing this topic Randy. The actual state of the financial/economic system is just as important to the well being of a community as stockpiling and the like. Most of the time people are in the dark, or don’t know what to do about the problems they are aware of, or not. Without a mechanism to preserve wealth, the community will suffer regardless of how much food is grown. There are bills to pay, and other day to day demands that require money. I believe we are in a deflationary cycle, with bouts of inflation along the way. Inflation will come in the way of QE, which over time will lessen the severity of the deflationary cycle, like a ball bouncing down stairs. Japan is a good example of this type of cycle.

    Scroll down a bit for Nicole Foss’s commentary:

  2. Random observations on my recent trip from Seattle to Los Angeles:

    Great to wake up to blue skies, sun, and butterflies on their migration south. I know I am a doomster — albeit a cheerful one — but here are some less cheerful, random observations along the 1200 mile I-5 corridor: a number of people with backpacks, bedrolls walking south on the shoulder of the freeway; a sign near Weed, CA- “$1000 fine for abandoning animals,” Many empty storefronts, some whole strip malls abandoned with grass growing in the parking lots; protest signs from farmers outraged that congress has turned the San Joaquin into a dust bowl by cutting off their irrigation water to save an obscure endangered fish. I’ve been making this trip for almost 50 years and have never seen such despair. Seems like the Joads will be rolling in any day now.

  3. A day of infamy.

  4. I think the 7 trillion was not given to the banks as stated, but loaned to them at 0.01 interest rates. They immediately bought treasuries yeilding about 3% for a tidy profit over time
    Where can I get in on this circus act?

  5. Another day of infamy (more recent)

  6. What has happened and is happening with MF Global has happened before, and will happen again…all just catalysts for events that effect your personal financial lives…..topics of titillating conversation around the table at the Islander or at parties……the question still remains, what are you going to do to protect your wealth going forward as this and equally as important events unfold during the process of deleveraging?:

  7. Corzine on the missing 1.2 billion from MF Global:

    “I did not have sex with that money.”

  8. I wonder, what the bottom-line total is of all the deferred taxes from every IRA held in the United States adds up to. What if everyone in America could become so terrorized about the economy, that they all cashed in their IRA’s, paid the deferred taxes, and early withdrawal penalties, and put what money is left under their mattresses. Just think of the huge sudden influx of funds to the IRS! I bet the government could extend unemployment benefits forever!

  9. Rosenberg is a very well respected analyst….I’m totally on board with his take on the future, which dovetails with Nicole Foss’s vision….:

  10. I’ll leave you with one more link….anybody can read these charts, and hopefully understand the implications:

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