How Bad Could It Get?

How Bad Could It Get? Into the Maelstrom and a Refuge on the Far Side,  The Pakistani Nuclear arsenal and US could lose AAA rating.

The Economy–A “Must Read” With Some Observations: Our recommended “must read” is James Wesley, Rawles’ commentary this past Wednesday, May 20, 2009 at his survivalblog.com site. It’s entitled “Into the Maelstrom, and a Refuge on the Far Side”. This commentary references America’s “…deteriorating economic conditions.” and offers some “… possibilities for the next decade.” Here are a few of Mr. Rawles “possibilities” along with his strong recommendation:

• “Higher taxes and fees at all levels, as legislators scramble to make up for lost revenue.”
• “More frequent and larger bank failures, and possibly some bank runs.”
• “Huge pension fund failures, both private and public.”
• “Drastically scaled back city, county, and state services–including police and fire departments.”
• “Employment benefits and perquisites scaled back drastically.”
• Mr. Rawles strong recommendation: “Be prepared to hunker down through a depression that may last a decade.”

Some Observations: PrudentHome is in strong general agreement with Mr. Rawles “possibilities” and with his recommendation but we believe that there are some additional considerations that could, quite frankly, put his “possibilities” and recommendation “on steroids.”

Here’s what we mean:

• What if Pakistan reaches a tipping point” and “tips” in favor of the Taliban? America has “plans” for securing the Pakistani nuclear arsenal but they are just that, “plans.”
• What if Israel decides that Iran’s nuclear and missile programs have developed to the point of posing an imminent, existential threat to the Jewish state and preemptively attacks Iran? There’s certainly a “plan” to keep the Straits of Hormuz open and the oil production facilities of other regional states functioning but again; they are “plans”.
• What if economic, social and political conditions in Mexico deteriorate to the point where Mexico becomes the “failed state” some analysts have predicted? What happens to its “fluid” population and what is it’s new government going to be like?
• What’s the impact of continued global weather change over the next decade with a possible world population increase of ¾ billion (with 60 or so million of those in the U.S) and one of the lowest world grain reserves in modern times?
• How does a world agriculture that’s about 90% fossil fuel dependent fare with falling oil reserves and production declines? (Please include the U.S. in your calculations.)
• Lastly, how does an America that has a palpably diverse yet interdependent population hold together in/during a decade long depression? (Note: This isn’t the same America as the 1930’s.)
• If any, some, or all (it’s possible) of the above should ‘break bad”, then those who read James Wesley, Rawles commentary of 5/20/09 and counted him a “doom & gloomer” will come to count him a prophet of light. We read survilalblog.com daily here at PrudentHome and highly recommend that others do too.

U.S. Rating: “Bill Gross: U.S. Will Lose Triple-A Rating” is the title of the Dan Weil article at moneynews.newsmax.com today and here’s the nugget:

“Superstar bond fund manager Bill Gross says the United States ultimately will lose it’s triple-A rating, thanks to the expanding budget deficits.”

Put your trust in your faith, family, friends and neighbors and until next time: keep your eyes on the horizon as the weathers hanging fast.