Sense and Nonsense

Contrary to what some may believe, the Greek economic crisis did not turn into being overnight. After 2 years living with it a pattern is emerging, one that shows the gradual decline in indexes and living quality.

Things actually deteriorated before the crisis was spoken of and this writer fell victim to the first unannounced public sector cutbacks early in 2009. Then Greece had a new government with the task to sort things out. I will flat out say they failed because they were worthless to pull it through and the story will show that next.

In a nutshell the now defunct Government was standing against parts of its own flesh and body, that had infiltrated the public sector. So it did not push any of the structural reforms to put the economy on its feet. Instead they went through with cutbacks and taxes, then more taxes, then more.

At the same time two proven propaganda blurbs were aired from the corrupt media. An unprecedented scare tactic pointing to the impending end and a dividing propaganda against the two main groups of the populace. The private and public workers. The latter were tagged as overpaid no-worths that deserved justice by salary cuts. The people bought into this and instead of asking for their pay to be raised accordingly, asked for the public servants’ heads on a plate. When the first cuts (of about 15%) went into effect they soon realized their own paychecks would be next.

Add 1 - Human Capital - Priorities (August 26, 2011)

Going back to a working definition of Human Capital from Charles Hugh Smith's ebook, "An Unconventional Guide to Investing in Troubled Times":

"Human capital can be defined by what it is not: human capital generates all income which isn’t generated by purely financial investments such as stocks, rental property, savings and bonds. In essence, human capital is expressed as productive work: the combination of skills, knowledge and experience that generates income and value from providing services and making goods. ...

Trust is an integral component of human capital; an untrustworthy person with high skills has much lower human capital than a trustworthy person with the same skills. ...

Not all human capital investments serve the goal of generating income. For example, learning how to prepare healthy, tasty meals from real food is a skill that potentially pays enormous health benefits, even though it might never generate a dollar of income".

Financial, Human and Social Capital

Global financial markets and institutions appear increasingly unstable. The temptation is to expound on that, endlessly rehashing the problem. To do so is to avoid thinking about possible solutions. It is a logical extension of denying there is a problem to solve.

Rehashing the problem could be an attempt on my part to recruit a multitude of followers to my point of view before I act. Wasting time convincing others is a way to postpone and evade dealing with the problem itself. My best interest is served by getting out of a burning building, not convincing others it is on fire.

Truthfully, I do not know for certain that the financial markets and institutions are indeed increasingly unstable. I may be misinformed or I may be misinterpreting the information I have. Or maybe I am just  another grumpy old man living comfortably while lamenting the state of world affairs. Then again maybe I am crazy, obsessing on problems that exist only in my fevered mind. While recognizing these and other possibilities, I choose to explore investment opportunities outside the financial capital markets. You are free to take it or leave it as you choose.

Every economic collapse is different from the historic, big-picture perspective but the effects on the average citizen are remarkably similar. Citizens find their savings are gone or inflated into worthlessness while the basic necessities of life become difficult or impossible to obtain. More people than anyone wants to admit simply died or were killed in the violence that came with desperation.

The experiences of the survivors may be useful to US citizens who want to prepare for political, social and economic instability at home. The US is not immune to such man-made tragedies - they are the natural result of irresponsible national behavior.

It is not easy to find personal, first hand accounts of how the average citizen fared during economic collapse because most average citizens were scrambling to survive. They did not keep records and take pictures. As a result, most accounts are filtered through government and academic channels that have a vested interest in distorting the picture to shift blame. Most personal accounts are written after the fact and from a secure position.  Memory probably sugar coats it a little, particularly in regard to how many people did not survive. None the less, they contain truths that are useful and similarities that are striking.

The USSR collapsed in 1991and defaulted economically in 1992. Their problems at that time were similar to those faced by the USA today in some ways and completely different in others. The following account of personal experience during the Russian collapse 20 years ago came from  Signs of the Times website. It is presented here with their explicit permission. I do not know the actual name of the original author but will be happy to give credit if it comes to my attention.

The news media feed us a daily diet of impending doom. Bankrupt Greeks, drought or flood, budget deficits, debt limits, murderous mothers, corrupt politicians, climate change, pirates, insane dictators, bankers run amok - the list is endless and changes every day. Did you ever get news that a single one of these problems has been solved? No, they haven't been solved, they have simply been passed over in favor of newer, more exciting problems or more strident descriptions of the old ones.

Even personal conversation gravitates to the problems of the week. Lamentations, doom and gloom become a part of our daily life. But the problems we worry about are beyond our power to solve so we fall into cynicism (see rule 7 below), anger or depression depending on our personal tendency. It is amazing how fast a gripe session ends when someone asks, "What are you doing about it"?

I have been searching for solutions. Since the problems the news would have us focus upon are important, affect our daily lives and shape our future, a  solution that is within our personal power to implement is imperative. No individual can solve any of these problems alone so the personal solution must involve either a co-operative effort with like-minded people and/or individually preparing to deal with the likely consequences.

Surprise! Solutions are much harder to find than problems.

Do not look to the powers that be (elected or appointed) for solutions, They created the problems and benefit personally from them. The solution must come from within each individual citizen acting voluntarily, bound to others only by common beliefs and conscience. That is the essence of the organizational solution outlined in "Leaderless? Good!". A plan for personal preparation is outlined in "Prepare for ... What?".  Below are some guidelines for living free.

The Essential Rules of Liberty

By Brandon Smith

There is nothing worse in this world than an enslaved man who naively believes himself free, except, perhaps, trying to explain to that same man his predicament. You can lay truth after truth before his feet. You can qualify your every position with cold hard irrefutable data. You can plead and scream and raise veritable hell, but before he will ever listen, he must first become aware of his own dire circumstances. As long as he views himself as “safe and secure”, as long as he imagines his chains to be wings, he will see no reason to question the validity of the world around him, and he will certainly never invest himself into changing his own deluded destiny.