Triffin's Dilemma

[ThePythonicCow]

Re: Triffin's Dilemma

How about if I were to just retire in my house in East Sooke, British Columbia, and ...

Yes, individually, a few of us can opt out, adapting a life style that involves no debt, with cash flow needs a modest fraction of available income sources. You can go to your house in East Sooke, and I to my trailer in North Texas. I get to watch the ants, so you win on that score with your bears. But yes, that works, for those who choose it.

The majority will not choose it. The majority will get behind the debt and obligation curve. There will be much unrest, once jobs retract further, the social safety net retracts, and prices for food and gas rise further. The unrest will be met with foreign wars and domestic crack downs. I will be quite surprised if the public private partnerships of TECI succeed in a major way.

[gnk]

Re: Triffin's Dilemma

Yes, individually, a few of us can opt out, adapting a life style that involves no debt, with cash flow needs a modest fraction of available income sources. You can go to your house in East Sooke, and I to my trailer in North Texas. I get to watch the ants, so you win on that score with your bears. But yes, that works, for those who choose it.

The majority will not choose it. The majority will get behind the debt and obligation curve. There will be much unrest, once jobs retract further, the social safety net retracts, and prices for food and gas rise further. The unrest will be met with foreign wars and domestic crack downs. I will be quite surprised if the public private partnerships of TECI succeed in a major way.

Well said PC - both this response and you're explanation above on why we need to consume, re: Triffin's Dilemma.

As for "opting out" I too have opted out. I moved to an island in Greece, with a choice of two family homes that have been in the family for generations. Just about zero expenses, mountains, clear seas, plenty of fishing, olive groves, and vineyards, etc...

But I do feel guilty. Although it's a temporary opt out, I do rely on electricity, internet, and god forbid, if needed, medical services. If everyone opted out, those things and many other things would be difficult to come by. I have the luxury to opt out, but I prefer that most don't opt out. Ignorance is bliss for the masses, and that makes my life easier. Just being honest.

Some may say that opting out is a cure of sorts. That may be true - opting out hurts the debt consumption banking model. But it also hurts a lot of other things. Transition is a bitch. One way or another, we're facing a huge transition... and the cure will be just, if not more painful, than the disease. But at least the cure is temporary. I do believe things will ultimately get better. But unfortunately, no where nears as fast as most expect. And that cure, in other words, that transition, will be extremely painful. There's a lot of unsustainable processes/systems in this world that we have become very accustomed to.

It's a breakdown. That's the best way I can describe it.

[Starving Steve]

Re: Triffin's Dilemma

Well said PC - both this response and you're explanation above on why we need to consume, re: Triffin's Dilemma.

As for "opting out" I too have opted out. I moved to an island in Greece, with a choice of two family homes that have been in the family for generations. Just about zero expenses, mountains, clear seas, plenty of fishing, olive groves, and vineyards, etc...

But I do feel guilty. Although it's a temporary opt out, I do rely on electricity, internet, and god forbid, if needed, medical services. If everyone opted out, those things and many other things would be difficult to come by. I have the luxury to opt out, but I prefer that most don't opt out. Ignorance is bliss for the masses, and that makes my life easier. Just being honest.

Some may say that opting out is a cure of sorts. That may be true - opting out hurts the debt consumption banking model. But it also hurts a lot of other things. Transition is a bitch. One way or another, we're facing a huge transition... and the cure will be just, if not more painful, than the disease. But at least the cure is temporary. I do believe things will ultimately get better. But unfortunately, no where nears as fast as most expect. And that cure, in other words, that transition, will be extremely painful. There's a lot of unsustainable processes/systems in this world that we have become very accustomed to.

It's a breakdown. That's the best way I can describe it.

Two quick observations of people here in California, before I end my visit and return back home to my survival cabin on Vancouver Island: First, people are beginning to save a few dollars, not for the interest income because there is no interest on savings, but maybe because people are becoming worried. That would be new. The merry-making in California is over. As incomes shrink, people SAVE. (Mr. Bernanke, are you observing this, too?) Second, credit-unions are becoming busy, and people are moving their accounts out of banks and into credit-unions, just as they did during the Great Depression of the 1930s. The reason for this might be that credit-unions make loans easier than banks make loans now. Also, the banks don't want small business of any kind; i.e, not small savings accounts, not small business loans, and not home loans. (So this is interesting to note.)

[bagginz]

Re: Triffin's Dilemma

Well, we don't really NEED to. But if we don't, then we all get poorer and hungrier.

The global engine of stuff (minerals, food, clothing, houses, manufactured goods) depends on the global engine of money to keep the stuff moving from one person to another and to fund the investment capital to make or mine more stuff. The global engine of money in turn depends on a rising quantity of Dollars. Each year, more Dollars are required for debt service on the previous years debt.

Our banks create Dollars by lending them. Americans service their increasing Dollar debt by borrowing yet more. The rest of the world of the world funds its purchases of Dollar denominated oil, and services its increasing Dollar debt by borrowing more Dollars and by making or mining stuff to sell to Americans for more of their (borrowed) Dollars.

Faster, faster, faster, until the thrill of speed stuff overcomes the fear of death debt.
-- Quote modified from a T-shirt slogan on a motorcycling friend of mine.

We don't just have a Peak Oil problem. We also have a Peak Dollar problem.

We don't dilute our oil (give or take 10% ethanol), so a liter of petro is as good now as it was 50 or 100 years ago. It is just more expensive. Peak Cheap Oil.

We do dilute our Dollars. Peak Strong Dollar.

Of course, as Damon Vrabel notes in his latest YouTube video (posted by don here on iTulip last night) the world's debt are the bank's assets. Humanity is borrowing its way into debt servitude to the big banks and their wealthy controllers. The Argentina's of the world have already completed this transition. Now Europe and the U.S. are about to go through the rough phase, where an increasing number of citizens cannot afford the basics of food, shelter and clothing. This leads to civil unrest, a crack-down on civil liberties, and debt peonage.

So the Dilemma is that even if Americans do borrow to consume what others make or mine, we all still get poor and hungry. We're trapped on a treadmill of doom.

Cui bono? The controllers of the big banks are the benefactors. All our debts are their banks assets. However the joke may be on them. They may end up owning everything, only to find it is worth nothing.

Well said PC. An excellent summary of our predicament.

Some may say that opting out is a cure of sorts.

It is and I suspect not only for the economic system.

That may be true - opting out hurts the debt consumption banking model.

It does. Good thing too.

That whole consumption system is totally and utterly unsustainable and leading us all towards ecological disaster/extinction. It's insane in fact.

Given that we have to re-localise anyway, (peak oil, peak credit, peak everything) might as well get started sooner rather than later, then the transition won't be a problem. Could even be a fun and interesting challenge. We could even end up with an improved quality of life...

As for "opting out" I too have opted out. I moved to an island in Greece, with a choice of two family homes that have been in the family for generations. Just about zero expenses, mountains, clear seas, plenty of fishing, olive groves, and vineyards, etc...

Ooh lovely

But I do feel guilty. Although it's a temporary opt out, I do rely on electricity, internet, and god forbid, if needed, medical services.

Give yourself a break gnk.

When the choice is between staying inside a car with no brakes speeding towards the edge of a cliff and diving out the door before it goes over why feel guilty? It's simply an intelligent choice.

Some things ain't worth opting in to.

If everyone opted out, those things and many other things would be difficult to come by.

Maybe, maybe not. I doubt the whole world will go Amish overnight.

Hopefully the transition will be slow and smooth enough to at least keep the internet and most of the modern communication network in operation.

As for healthcare, as always was the case, a good diet of fresh (preferably self grown) food, some exercise, sunlight and good company and laughter works wonders.

btw, I imagine the only constraint for a smallholding on an island in the Agean would be fresh water?

Those Aussie Permaculturists know a thing or two. Check it out...

cheers,
bagginz

[Penguin]

Re: Triffin's Dilemma

This is exactly what I was ranting about on the latest 'anti-spin' thread. As practiced, this whole globalization contraption is an economists wet dream. The only way this thing functions is to have some country which is willing to accept large trade deficits and growing debt to keep it functioning.

I figure there is one good thing that is meted out to the masses by living in the originating country of the reserve currency: cheap fuel. Aside from that it is a curse to anyone who actually makes things for a living. This is a system that is guaranteed to produce a power elite and to do so by taking away a lot of the accumulated wealth of those in the middle. A country would need to be mad to accept RC status. To hell with this system. If this is the best our economists can come up with then to hell with it. Opt out. Not as individuals, as a nation.

When it gets right down to it we have two cold hard incontrovertible facts on our side: we can grow our own food and we can produce extremely accurate ballistic missiles carrying a payload of nuclear weapons. We can pretty much go back to being a nation of designers, builders, engineers and scientists. We are not at the mercy of someone else to provide us with a lifeline.

Furthermore this RC status has been abused. I am not saying America is particularly deficient, I don't know of any country that could carry this burden well. MOF I can come up with a slew of them who would abuse it even more. Even so we have used it to finance war at the expense of statesmanship, we have used it for the financial colonization of other, weaker countries, and we have allowed our elite to swindle those in other countries out of Trillions USD. No country can carry this burden well. It is beyond humanity to do so and America should never have tried.

On a more positive note: I saw a question pertaining to EJ's proposed new economy and whether it could get off the ground. I find it kind of odd that someone like myself is actually involved in a new project that is right down that alley. I, after all, was for years a racer, a man who made a living in entertainment. Went back to my research roots recently and it feels good. I can tell you from the front lines that there are major projects in cutting edge combustion/engine/auto research coming online right now. Many of them are so wild that you would be hard pressed to believe them but there are some out there. There have been some major breakthroughs in making some truly groundbreaking combustion systems viable. The trouble for many auto makers is that they have seen their R&D budgets slashed after the fallout from the crisis.

The interesting thing for itulip is the financing and staffing for this stuff. Companies find it hard to staff these cutting edge facilities because of the necessary investment. The one I am on is a partnership between the DOE and one of the big three. The government does have these facilities and the staffing. They are used on many projects and can jump from one to the other. So companies are using that flexibility to get into these projects. They lay out a several year project which has many busy times and other downtimes. The facility jumps from one to the other and both sides are winners. Just thought that would interest some of the itulip gentre. That is how the partnership I am involved works.

Will