What’s going to happen this new year 2012? Damfino. But some things seem more likely than others, right? So let’s ruminate a bit on some of those of current interest. You can return in 2013 and laugh about the misses while I brag of any hits.
Europe and its Frankensteinian currency cobbled together from the relics of francs, drachma, lira, Deutschmarks and whatever will decompose along with its Euro as one leg falls off the monster, then an arm or two and finally its head will have little but fellow Germans and possibly, grumpy Frenchmen still pretending to like each other. The Euro was a delusion from its birth since it gave spendthrift pols the power to spend using other’s credit. The impact of these pieces falling off the monster will be felt world wide.
North American dollars will look enticing for a little while after the Euro goes, similarly to the cartoons of Wily E. Coyote chasing the Roadrunner off the cliff into the air. You remember, he didn’t fall until he looked down and realiezed his position. When the dollar falls, it will multiply the impact of the Euro collapse world wide and repeating the 1930’s, the U.S. depression will outdo Europe. Canada will suffer from its dependence on the U.S. market but will suffer less for having already started straightening its finances last decade.
That financial diva, the stock market, remains overvalued after its 2008 upset was papered over by funny money to buy the banks out of their government-imposed bad decisions. The market has been awaiting its readjustment toward reality along with its brother in bluff, real estate. Both will seek their true levels, somewhere in the cellars underlying them. Frantically accelerated money printing at the Fed won’t stop the fall, just help devalue the dollar which is already inflating in the real world, if not on government reports.
European and American politicians are spending nearly twice what they collect from citizens, upheld by borrowing the difference. That debt, together with promised social spending, is too much for the citizens to repay. No matter how that is handled-or continues ignored-the resulting financial Armageddon and collapsing living standards will bring the instability that has led the U.S. Congress to assign the military the policing of the mainland U.S. with the power to imprison citizens without charge so long as desired. The President already claims the power to kill citizens of his choice without review. Violence will increase and Federal camps will be unveiled to hold those rounded up as it worsens. The beginnings will show soon after the economic failure of government can no longer be camoflauged with funny money; most likely after 2012 but not too long after.
China will not bound ahead; it’s problems are as bad or worse. It’s significant that its’ progress has depended upon exports to Europe and North America, which won’t be buying much for quite a while as things progress. Unfortunately, such conditions often breed war from frightened politicians anxious to distract the citizens. China is likely to be tempted and as Europe weakens, so may be Russia. There’s plenty of precedent, but that’s probably looking past 2012.
Will the Moslems take Europe from its hapless socialistic suckers? Islam is a collection of mostly failed or failing states internally divided, often backward, jealous and untrusting of each other and speaking many languages. Islamic countries will not be improving economies as the rich world impoverishes itself. It isn’t impossible for a new Prophet to fire up the Moslems but it doesn’t seem the way to bet.
Will Obama win reelection? Hell, how should I know? But we can see that the Republican leaders have worked hard to prevent the nomination of any candidate truly desirable to Republican voters; their ability to pull defeat from the jaws of victory shouldn’t be discounted.
Finally, will we see the significant deflation that so frightens the mighty? Damfino that, either. But when you ignore the propaganda, deflation just means that your money will buy more than it used to buy; it reverses the steady theft of your wealth accomplished by the government’s perpetual inflation. What’s not to like?