Economic Collapse a Mathematical Certainty...

I get the impression a lot of folks even here still don't believe the economy will completely collapse. I ran across this video that I thought was very good at painting the picture for you. However what's really good is it is based on the math. I have said many times it is a mathematical certainty. All Fiat currency schemes in history have ended very badly it is mathematically inherent in the scheme as it is driven by continually printing and injecting more money debasing the currency. This will be the worst the world has ever seen and exponentially greater then ever imagined.

The Dollar is the defacto world currency. Currency collapses in the past were softened a bit by the fact that they were regional and there we other currencies they could fall back on. Still they caused havoc. Folks there is no fall back currency here the Dollar has permeated the world like no other currency ever has... There is no place left to kick the can down the road to. Its time to batten down the hatches and shore up preparations this is for real! This fiscal cliff is at the top of the Grand friggen Canyon!

Here is the math folks - Its called the Compound Interest Equation A=P(1+r/n)^nt
"The most powerful force in the universe is compound interest".

If this does not convince you then nothing will!



www.youtube.com...

reply to post by hawkiye


I've always believed that we'll eventually have an economic meltdown, we just don't know when and to what extent the repercussions will have on all of us.

And how long will the recovery take ?

It's a scary thought indeed and if people act like animals on Black Friday, can you imagine what they will act like when the dollar collapses and the domino effect that it will have on life as we know it???

Of course, some think that because this is the USA, that that could never happen here.

Some believe that the economy needs to collapse in order to fix the problem.
Guess we'll have to wait and see what happens.

These are hard times as is, I can't imagine what it would be like in a worst case scenario.

I really want to thank you for making the thread. My own disbelief is what led me to spend the weeks I did in the federal budget to make the thread linked in my signature. I just couldn't believe this was something inevitable and with absolutely no way to avoid it. I had to prove it to myself.....and now I wish I hadn't. There is something about having that knowledge as an absolute that just takes a bit of sunshine out of each day.

Now we seem to have crossed well into the level of exponential growth and regardless of deficit level at this point. That means the math won't take long now to play out...as it must. Hopefully the bottom won't be too dark and we won't be there too long as a nation or world....assuming the world goes down with us. Last numbers I saw put collective derivative estimates for 'digital value' in excess of 800 trillion dollars. It's fantasy land play money make believe. It can't even be represented by known physical assets, all taken together, across the whole globe.

I laugh only because the absurdity one will discover in a short period researching this leaves few other reactions. Stopping it sure can't be done....and that's been the case for several years now, IMO. (If it ever really could have been anyway) S/F for a great topic to highlight.

Where is the mathematical proofs ?
I watched the 13+ minutes of this guys ramblings and so no proof. There is no math in this video, I wish there was because I wanted to see how he came to this conclusion but h well, not a shocker. Its like the Austrians, they refuse to use math to prove anything and instead use political agendas as proof.

Oh and this guy here does not really understand how much of anything works.

reply to post by Wrabbit2000


But aren't most of those trillions of dollars just zeros on a computer screen. They don't actually represent any physical assets,,just a bunch of collateralised derevitives and financial products. Surely we could just press delete on a few of those zeros and no one would know the difference.

This won't be fixed until fiat money (which is debt-not wealth) is done away with and a return to hard currency. The longer this critical point is kicked down the line (it will occur one way or another, fiat money inevitably becomes worthless over time) the longer the ensuing chaos will be. If reasoned people were ever elected to Congress and a system put in place to return to sound money (which is wealth) gradually by eliminating the Fed first and moving in an organized fashion to replace the old with the new, one could probably keep the chaotic interegnum to a year or so. If the more likely option of burying heads in the sand and hoping for some miracle to come along is what happens, I'd wager 3 years minimum before a stable system is in place. And in all liklihood, a lot of casualties and a long period of martial law and rationing

reply to post by woodwardjnr

Well, that's one way of looking at it. However, the trails of money all end somewhere and for the public side of the debt (The vast majority by % of U.S. debt) that comes out at the level of the individual person. Know anyone with Treasury bills, bonds or similar things? Anyone whose grandparents perhaps bought them bonds as they grew up? Those bonds are this debt. I bought some of the Patriot Bonds myself after 9/11...as I was feeling quite patriotic at the time and a topic for another thread. Anyone can buy US debt though. It's just not called that right on the face of the notes. lol..

However, aside from what Grandparents have in safe deposit boxes you also have pension funds, retirement funds, banks, credit unions and business who all hold various %'s of assets in bonds and T-bills. To 'delete' that debt would basically 'delete' the functional economy in a keystroke.

........among the many things Media seems to almost take joy in NOT explaining for how easy it would be to go ahead and explain for folks.

reply to post by gorgi



The equation is posted in the OP and under the video. He explained it in the video starting at about 2:48, it's simple if you continue to debase the currency exponentially it will become worthless, in our fiat monetary system the debt has to be increased every year in excess of the debt accrued the year before. That's like borrowing money to pay the interest only on your credit card. How long do you think you could last if you handled your finances in that manner? The problem is the government has unlimited credit via the printing press or so they think except inflating the currency does have a limit and we are very close to that limit.

OP, here is my chart on compounding interest as well, if it may help put it into perspective for people in a different way. I'm making it a thumbnail so it doesn't overwhelm the thread but I think this is the single MOST important thing of the entire situation. Bar None. If someone doesn't understand how compound interest works, it's impossible to explain why the national debt is outright doom. If someone DOES understand how this equation functions, it's impossible to look at the debt and not see it as pure doom. I think it really does come down to that one question and issue.

The mathematical certainty of it is easy - you cannot continue borrowing money indefinitely. If that was the case then I should be throwing prudence to the wind and just keep borrowing. Banks know I cannot do it so there must be something to this borrow for eternity and running deficits, and that is eventual insolvency.

This collapse has take longer than what I thought but have not changed my position at all, only the timing. It will be the global crisis that ushers in a world government based on the manifesto for a global democracy and global economic growth pact.

reply to post by surrealist
The main reason the collapse has taken longer is because the dollar has been the currency needed to buy oil or as it is called the petrol dollar. Had that not been the case it would have already collapsed. But that is changing China and Iran are now selling oil in the yuan. So even though the dollar has lost 97% of it value since 1913 the world needed them to buy oil.

People do not realize how close we are now... We are playing in the last 3% of it's value so to speak and that is solely because of oil.

reply to post by hawkiye

I get the impression a lot of folks even here still don't believe the economy will completely collapse.

I do not think that you are aiming to the the right target, it is not a question of disbelieving that the economy will completely collapse (in fact it has already done so, and it has not been only recently). The question is the blind faith people still have that things will improve.

There is no chance that things will improve not even if by chance the politic will would force a drastic chance in society, this has been explained by the analysis of previous collapsing civilizations.

We are in a very deep bind, our civilization today is essentially driven by energy considerations more than other economic factors (the economy reflects all human interactions and is principally based in human requirements).

The major problem is optimization, much of what could be done to improve our quality of life (that is making things better) would require today a too drastically a chance to ever consider it viable before a catastrophic system collapse. The major problem being how the political systems in its vast majority works (that is it works badly to for the collective and prevents long term planning).

You are also limiting your economic collapse to the monetary system, that is a very limited view in today complex society. We will see the exacerbation of all problems at once and over time (for instance food and security will be immediately affected but there are slower effects like in research and education and long term like demographics and energy, ultimately even affecting ecologic sustainability, all like will work like a domino crashing sequence).

I really appreciate the movie Soylent Green in its vision of our real possible but distant future. It will not be easier for future generations and we can be already on the brink of a situation without return (at least for the 99% of us).

It should be clear to all that because the control over the effect the drastic changes required is under the 1% we will most probably continue in our path of decline, even if not always linearly the easy times previous generations enjoyed will become scarcer and situations of rupture will become more common...

Originally posted by hawkiye
reply to post by gorgi

 

The equation is posted in the OP and under the video. He explained it in the video starting at about 2:48, it's simple if you continue to debase the currency exponentially it will become worthless, in our fiat monetary system the debt has to be increased every year in excess of the debt accrued the year before. That's like borrowing money to pay the interest only on your credit card. How long do you think you could last if you handled your finances in that manner? The problem is the government has unlimited credit via the printing press or so they think except inflating the currency does have a limit and we are very close to that limit.

Thats not mathematical proof of anything and its not even accurate. It doesnt matter how i would do it as an individual, Governments arent people. They can do so much more stuff than a person can do. And the government does not just print money like that, third world countries do but not any the US. If we did that then we would have a huge inflation rate, which we dont have.

reply to post by hawkiye

Listen to Professor Albert Bartlett. This isn't complicated math, yet it is very misunderstood. The title should be revised to include growth based economics.

www.youtube.com...

I have retired all debt and have chosen to interact with this economy only at its minimum as I choose during the last three years. Have been changing over from cash to intangibles on a steady basis getting ready for the hyper-inflation that is inevitable.

I have talked to others about the situation being unrecoverable mathmatically and have gotten the typical eye rolls or the look of unbelieving desperation as those who've intrinsically understood still deny it due their hocked to the eyeballs finances. They shrug shoulders and make the oft heard "what can I do about it" comment as they continue blithly in their ways - never making an effort to structurally change anything in their personal situation.

I agree that a giant updraft of artificially low FED monetary policy along with US Dollar as prime trade currency has appeared to stave off disaster for a time - question mathmatically proven time and time again to my satisfaction (dismay) is the updraft cannot and will not last much longer and the higher it pushes the farther we fall when SHTF.

End of public service announcment, you may now return to your regularly scheduled programming.

Algorithms based on human behavior (vs the laws of physics and mathematics) can not be a "certainty" IMHO.

reply to post by CosmicCitizen

For a total economic collapse to occur then people would have to panic...and create chaos beyond that which is present from the financial crisis. It may well occur....that people will panic in the last stages (bank runs, etc) but the timing of same cannot be predicted as a mathematical equation (it remains in the realm of probability).

reply to post by CosmicCitizen


The OP is about certainty of an economic crash not a behavioral certainty of societal crash which is a whole nother subject. Posters above have given some very well researched data to look at - maybe you should go look.

I beleive one will lead to the other quite rapidly though.

reply to post by Phoenix

Thank you I will go back and read the OP from that frame of reference but I wasnt just talking societal collapse but rather that an economic collapse depends on the behavior of consumers and investors also to facilitate it. I agree that it is inevitable but it didnt happen in the 1970s and 80s when the Kondratieff Wave suggested either. One thing that could counter or stimulate (manipulate) the behavioral aspects of those involved would be a false flag or something to create a knee jerk panic which would have immediate economic consequences leading to the inevitable crash.

reply to post by CosmicCitizen

I made the point on Compound Interest in a discussion in 2008 during the financial crisis that the end is inevitable because previous civilizations and their monetary systems ave always reached a maturation point and then collapsed (like the Romans) or relinquished power (as in the case of the Brits). Given the laws of Compound Interest their should be multiple trillion dollar dynasties by now from the invested proceeds of wealthy families in the middle ages and that (rothschilds being close tho) has not happened. Why? Their currencies eventually collapsed or were severely devalued and their wealth was drastically reduced.