Thought this was a great read, Dmitri Orlov on parallels (and non-parallels) between the collapse of the Soviet Union and where we are today:

http://cluborlov.blogspot.com/2009/02/social-collapse-best-practices.html

Kunstler has a similar post this week:

http://jameshowardkunstler.typepad.com/

(Read the "Poverty of Imagination" entry.)

Nothing entirely new in either one, but more and more evidence that what they and Nicholas Nassim Taleb have been predicting is looming ever closer, with a lot already come to pass.

One thing I'm not buying is all this doom-and-gloom. We're in a bad recession, akin to 1981-82. The credit bubble got a lot of things out of whack. We will recover.

http://online.wsj.com/article/SB123457303244386495.html

"The latest survey pegs U.S. unemployment at 7.6%. That's more than three percentage points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%).

"Other economic statistics also dispel any analogy between today's economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That's comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%.

"The failure of a couple of dozen banks in 2008 just doesn't compare to over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings & Loan) failures in 1987-88."

Did you notice that the figures and percentages quoted above are not from PRIOR to the Crash of '29, they are from four years AFTERWARDS? The trickle-down effect isn't instantaneous, it takes a while for the excrement to hit the bottom of the hole under the outhouse. We aren't there yet.

"Unemployment figures" tend to count only the people who are currently drawing unemployment, not the ones for whom unemployment has run out, the young people who have moved back in with Mom and Dad, the people who have just filed for unemployment but aren't receiving it yet, or the people who are living under bridges or in holes in the ground covered with a ratty piece of plywood and a tarp. They're not counting the still-employed people who are only working three or four days a week instead of five. Some economists say the current unemployment rate is closer to 14%.

And I love "That's... not even a third of the peak in 1932 (25.2%)." They're saying that like what it is today is as bad as it's going to get. And I don't think we're close to hitting bottom yet. I don't think the unemployment will get better any time soon, nor the mortgage/banks situation.

I can't even believe that the banks and Wall Street crooks of the 1920/1930s were anywhere near the practiced thieves and manipulators of today.

The National Debt on 6/29/1929 was just under $17 billion.

The National Debt on 9/29/2000 was just over $5.5 TRILLION. In just eight years, it's jumped to over 9 TRILLION. Almost double in eight years! And now we're printing up another TRILLION dollars as fast as the presses can work.

Does anyone think this is the final bailout?

Does anyone think the unemployment is going to stop this week?

Does anyone think the gas prices are going to stablilze tomorrow?

Does anyone think the snakeoil salesmen on Wall Street and Washington DC are finished with their tricks, deceptions and frauds?

Not me.

Sue

The can be no final bailout for the banks as the losses on the bursting asset bubble are many times greater than the GDP of the USA.

The worlds largest bank is essentially insolvent (a regional bank registered in Edinburgh, Scotland called Royal Bank of Scotland), the bailout measures are purely just confidence exercises to buy time to implement other measures. An example of the asset bubble can be seen here by just looking at the RBS balance sheet.

http://finance.yahoo.com/q/bs?s=RBS&annual

The Assets and Liabilities valuations are astounding. Total Liabilities are £3,689,973,801,000 or around $7.4 Trillion @ end of the December 2007 accountancy period with the exchange rate then around $2 to the £. So a Scottish regional bank has liabilities which are a good proportion of the total US National Debt. Of course this figure is balanced by the Assets of £3,795,906,599,000 (valuations before the Asset bubble burst). Of course these Asset valuations may well turn out only be worth a few cents on the dollar, only time will tell on how bad the losses will be as the real economy depresses and how it impacts on the historic exponential monopoly money asset valuations on the RBS balance sheet. Now multiply this effect over and over again as each bank was found to playing exactly the same game in the asset bubble. A complete banking collapse for the global economy has quite a high probability as time progresses.

As you can see even the Trillions of dollars being pumped into the financial system by the US Government and governments around the world is small change compared to losses which may have already occurred when the asset bubble burst for just one Regional bank based in the UK. It has now just come to light that the folks running RBS and all the other major banking institutions in the UK have no formal banking qualifications.

Any bailout of the financial system will not work because it is broken beyond repair. It really is beyond any Government actions to fix the problem. The feedback from the real economy into the asset bubble has not even really started, the full effects will not be known for at least 10 years.

The 1930s depression could pale in comparison to the problems everyone faces today.

I would take seriously the words of Mr Orlov simply because he has 'been there, done that' during the economic collapse and eventual breakup of the old Soviet Union during the 1990s.

A couple of months ago I wouldn't have taken the article too seriously but right now, I'm beginning to think there is a grain of truth in it.

Having lived in a former PHRASECENSOREDPOSTERSHOULDKNOWBETTER. country and experienced the economic collapse, then the many years of all-around decline (which they called "transition") first hand, Orlov's message strikes close to heart. Most of all, I agree with the following two passages:





Going off the grid is not viable for most people. But even if the situation really deteriorates to the point of collapse it doesn't mean the end of civilization. It will be an enormous change but it won't happen overnight and it won't look anything like Mad Max.

One thing I've learned during the infamous transition is that people are adaptable and will come up with new solutions. The times ahead may be tough and what we take for granted now might never again be available to us (or at least not for a long while). But we're all in the same boat so we'll just have to work together and do our best.

Not to be an alarmist but the true extent of the current crisis is far greater than we realize. It's still just the proverbial peak of the iceberg. What worries me the most is that nothing much has changed - the system still looks and feels the same even though the entire economy is running on fumes already. The people in charge are not committed to take any drastic measures but the situation calls for something drastic, not just patching a hole here and there.

\

Very true. Or as Bill Bonner said, "The cure for a depression is a depression." Soon the Fed will have two choices, interest rates or inflation. And its important to remember that in the 30's the dollar was not the worlds reserve currency. Word has it the Chinese, Russians, Japanese, etc, are already less enthusiastic about buying our debt. Lotta chickens coming home to roost. Maybe implosion would be a better word than depression this time around.