Delusions of Recovery

Yesterday it was revealed that America has been in a recession for almost a full year. People interviewed today about how long the recession would last, and they were saying maybe a couple more quarters or so, based on historical precedent. Because most recessions only last 12-18 months or so.

Yeah. Right. These people are delusional, refusing to face basic facts.

Such as the fact that the engine driving this whole collapse is still going strong: the housing collapse. In fact, the housing collapse is still accelerating. We have not even reached its peak yet, let alone being anywhere near its recovery. The deflation driven by the housing collapse is still picking up steam. Oil now below $50, everything on super-sale, businesses collapsing daily, banks still refusing to lend money in the deflationary environment, the stock market collapsing by the day, evaporating over half of our nation's investment and savings, manufacturing activity at an all time low, unemployment and food stamp claims spiking.

And people are talking recovery as if it just around the corner?

If we cancel all debt right now, we would have an instantaneous recovery. Canceling all debt is the only way to end the negative effects of deflation and unhinge our productive economy from our fiscal death spiral. But until we face economic and fiscal realities, we are in for a long slow bleeding death.

There is a very real possibility of social chaos and breakdown when a critical mass of people realize how bad things are going to get.

Watch carefully for the signs: Like ripples spreading out from the less advanced nations, our world order is breaking down. Africa will collapse first, in massive famine, disease, and death. This is beginning now, and will reach critical mass in the next year. Widespread wars will breakout in the Middle East and South Asia, within 2-3 years. Starvation and riots in China as well, within 3 years. At that point, be on red alert for full chaos conditions to arise in America. Weeks, probably months of increasing violence will spiral up, until martial law is declared. Martial law will settle down the mass street violence and chaos, but the violence of small, personal crime will remain at unbearable levels.