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Thread: for what it's worth - Historical 10 Stages of a Crash

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    Banned Melonie's Avatar
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    Default for what it's worth - Historical 10 Stages of a Crash

    totally 'for what it's worth' - from


    (snip)"I see the period after the various crashes very differently from those who anticipate immediate recovery symptoms. This is not because I imagine myself a visionary; my view is based on history. If we look at the economic collapses of the past, (inclusive of their possible knock-on effects, such as hyperinflation and destruction of the currency), from the fall of the Roman Empire to Weimar Germany, to Argentina and Zimbabwe - take your pick - the pattern is extremely similar.

    So, let's have a look at that pattern and ask ourselves if the present situation might not play out much the same (except far worse and more prolonged, as the conditions that led to this particular depression have been more extreme). The various stages are likely to be a given, but the various factors within each stage are a bit more uncertain. In every major economic collapse, some combination of these factors takes place.

    Also, consider that the stages themselves are like dominoes - they almost always fall in order. The reason? Details change in history, but human nature remains the same. The same knee-jerk reactions by people will repeat themselves over and over. (As an example, we are now experiencing a decline in exports from the First World. I believe that a repeat of the disastrous Smoot-Hawley Tariff of the 1930's will be passed in America, which undoubtedly would trigger increased hardship for Americans.)

    Stages of The Crash
    The stages are laid out below. The first three have already occurred.

    1 INITIAL CRASHES

    Crash of the residential property market
    Crash of the commercial property market
    Crash of the stock market

    2 INITIAL KNOCK-ON EFFECTS OF CRASHES

    Loss of homes
    Loss of jobs
    Inflation

    3 IMMEDIATE ACTIONS BY GOVERNMENT

    Bailouts for select groups
    Dramatic increase of debt
    Politicians going in the opposite direction of a real solution
    The first knee-jerk reaction began immediately, with the Government attempting to "make the problem go away" as quickly as possible. Almost invariably, at this stage, the corrective strategy is hastily prepared and shortsighted, assuring further deterioration of the economy.

    In this stage, the politicians on both sides fail to focus on a real solution. Instead, their primary focuses are, first, to avoid a painful real solution, and, second, to engage in finger-pointing, each political party blaming the other for the problem. The problem worsens steadily until one of the next series of major dominoes falls. This is usually sudden and triggers the toppling of other dominoes.

    4 SECOND WAVE OF CRASHES

    Major crash in stock market
    Currency plummets
    Increased bankruptcies
    Increased unemployment

    5 INTERNATIONAL TRADING PARTNERS REACT

    Foreign countries refuse to accept more debt
    Foreign trade slows dramatically
    At this point, the Government introduces dramatic change, such as ill-conceived protectionism, which backfires almost immediately.

    6 GOVERNMENT INSTITUTES DESPERATE SELF-DESTRUCTIVE MEASURES

    Defaults on debt
    Restrictive tariffs on imports
    Currency controls

    7 ECONOMY REACTS IN LOCKSTEP TO GOVERNMENT ACTIONS

    Hyperinflation - dramatic increase in food and fuel costs
    Massive unemployment
    Extensive foreclosures
    Extensive bankruptcies
    At this point, the dominoes are tumbling quickly, and a rapid unraveling of control is about to take place.

    8 SYSTEMIC COLLAPSE

    Bank closures
    Extensive homelessness
    Food and fuel shortages
    Electric power becomes sporadic, blackouts common
    As these factors unravel, the public mood turns to a combination of blind fear and anger.

    9 SOCIAL COLLAPSE

    Crime rises dramatically (particularly street crime)
    Food riots
    Tax revolts
    Squatters' rebellions

    10 MARTIAL LAW

    Creation of special army to address "domestic terrorism"
    Random killings become commonplace
    At first, the authorities focus mostly on violent subjugation and arrests; then, as prisons quickly become hopelessly overcrowded, camps become the norm. Soon, these too become unmanageable, particularly as a result of high cost of food and manpower. At that point, the solution turns to the killing of anyone who is suspected of a crime and, more frequently, anyone who is not submissive. (This will not resemble the Gestapo of the late 1930's. It will be less organized and more chaotic.)"(snip)

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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    Damn..so what stage are we in now?

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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    Between 3 and 4.
    The country has been looted.

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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    Again the disclaimer that I posted this 'for what it's worth'. It could be different this time !!!

    In regard to your question, arguably we're in the latter phases of stage 3, with stage 4 coming 'on deck'.

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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    Holy hell. Just shoot me now!


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    Banned Melonie's Avatar
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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    ^^^ actually, people throughout history have survived such events ... and even prospered if they were properly 'prepared' ... from


    (snip)"One of the most successful con jobs in the history of the world has been the concept of unbacked paper currency… or fiat money.

    Over the last 100-years or so, governments have been able to convince people that their pieces of paper, backed by nothing but promises, actually have ‘value’. This seems truly bizarre when you think about it. Governments tend to be untrusted, serial failures. Yet people readily accept their guarantees the world over.

    The history of fiat money has proven to be an almost uninterrupted period of inflation, asset bubbles, booms, busts, bailouts, panics,and other crises… and thankfully, it is an experiment which seems to be quickly nearing its end.

    As such, it’s high time for creative, thinking people to consider their options and start trading their pieces of paper for something of value.

    We all know the familiar story about precious metals– gold and silver have a long-standing tradition as stores of value dating back thousands of years.

    But did you know, for example, that in the early days of the United States, whiskey was both a store of value and a medium of exchange? At the time, the US had among the highest alcohol consumption per capita in the world… and people knew they could always trade whiskey for something else. As such, whiskey had significant value."(snip)


    The author goes on to describe additional 'disaster proof' stores of value such as guns and ammo, collectibles, farmland etc.

    The author ( who is a proud ex-pat now living in Chile ) also implies that, if and when the proverbial s#!t hits the fan, particular countries / regions will be severely affected while particular other countries / regions will be far less affected. I won't elaborate other than to say that my 'new' location way south of the border is FAR less likely to experience negative development along these lines than my 'former' location in New York !!! Well, I will also throw in this news item 'for what it's worth' ...


    (snip)“Detroit is America’s most violent city, its homicide rate is the highest in the country and yet the Detroit Police Department is grossly understaffed,” Iorio told WWJ’s Kathryn Larson. “The DPOA believes that there is a war in Detroit, but there should be a war on crime, not a war on its officers.”

    Iorio says the once 2,000 strong force is shrinking rapidly; since the start of summer, hundreds of officers have left the department.

    “These are the men and women who we look to protect us… and police officers can’t protect you if they’re not there. Officers are leaving simply because they can’t afford to stay in Detroit and work 12 hour shifts for what they are getting paid… These police officers are beyond demoralized, these officers are leaving hand over fist because they can no longer afford to stay on the department and protect the public,” he said."(snip)

    (snip)"“The explosion in violent crime, the incredible spike in the number of homicides and for officers trying to work 12 hours in such deplorable, dangerous and war like conditions is simple untenable,” he said.

    Iorio said the department today has less officers than ever, even though crime rates are through the roof.

    “By denying police officers the appropriate manpower, there’s a manpower crisis right now, there’s 1,000 fewer police officers today than there was 10 years ago, yet the homicide rate is higher. There’s more crime now than before, so if anything you need more officers, not fewer officers,” he said."(snip)


    While the Detroit Police Union's Attorney Mr. Iorio obviously intended to fear-monger in hopes of increasing the future paychecks of Detroit Cops, the underlying point remains ... that Detroit's economy and social structure has deteriorated to the point where it's no longer economically possible for Detroit politicians to insure the safety of the citizenry because they no longer have a sufficient tax base to fund an 'adequate' size police force versus the number of ( remaining ) residents motivated to commit criminal acts.

    Or put another way, the city of Detroit is arguably somewhere near stage 7 !!!
    Last edited by Melonie; 10-09-2012 at 03:28 PM.

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    Default Re: for what it's worth - Historical 10 Stages of a Crash

    Wow, thanks for the laughs. That was hilarious!

    His "facts" are wrong -- some are distortions, others omit elements that refute the argument while the rest are exactly backwards -- his "history" is a combination of totally imagined and selectively cherry-picked, his "economics" are pure fantasy and his "analysis" is what the mystics and thieves used to foist on the unwitting to manipulate and abuse them before empirical analysis was developed to shed light on the real world.

    Ayn Rand used to pull this same manipulative brainless shit all the time. It's why high school kids would fall all over themselves for her self-centered, selfish, hateful intellectual onanism until they actually went to college and studied history, political science, and economics at which point they would toss all her books out the window and grow the fuck up.

    At some point we all learn to stop listening to people like this clueless twit and poor Rand, who, aside from being a frustrated angry Russian refuge bent on getting even with the world, was incredibly terrified around people and used to burst into tears in company all the time. Her entire body of work is an attempt to hide the fact that she was always just a scared little girl who never really grew up.

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