The next ten years: There will be blood

June 30, 2011 09:05

[T]he US economy will never recover from the collapse of a three decade long credit bubble. Throw ever-rising energy costs into the bargain and you have the ingredients for a perpetual decline in real per capita GDP, the ubiquitous historical antecedent of political conflict and social unrest.

By Eric Janszen at

Current course and speed, we will see no recovery even to a hypothetical “new normal” that echoes 2007 or 1999 or 1994 for that matter.

Not by 2014.

Not ever.

Something has to give. Something will give, in my estimation within the next ten years.

I argue that the inability for the United States, the world’s reserve currency issuer, cannot repay internal and external debts and absorb rising energy costs.

Each time a group of retirees, or veterans, or other part of American society is sacrificed to bubble era debt repayment, society gains another few hundred thousand disgruntled, cynical, and angry citizens.

Not since the draft and the Vietnam War has public policy so divided the nation.

The majority of Americans may believe that the economic crisis knocked them off their destined course to wealth and prosperity, but the truth is that we were never as rich as we thought we were when cheap credit and cheap oil expanded our purchasing power unnaturally beyond the limitations of our productivity, of minds and machines, to generate an economic surplus.

If we were honest we’d admit, like a lottery winner who has spent all his winnings on cars and drugs, that the era of free-wheeling fun has come to an end.

We had a blast, but it’s over.


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