ALL BLOG POSTS AND COMMENTS COPYRIGHT (C) 2003-2018 VOX DAY. ALL RIGHTS RESERVED. REPRODUCTION WITHOUT WRITTEN PERMISSION IS EXPRESSLY PROHIBITED.

Thursday, November 21, 2013

Paul Krugman and the Permanent Slump

The Greatest and Most Important Living Economist is reduced to wild conjecture in a vain attempt to explain away the fact that no amount of stimulus is working as expected anywhere in the world.
[I]f Mr. Summers is right, everything respectable people have been saying about economic policy is wrong, and will keep being wrong for a long time. Mr. Summers began with a point that should be obvious but is often missed: The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed.

He then made a related point: Before the crisis we had a huge housing and debt bubble. Yet even with this huge bubble boosting spending, the overall economy was only so-so — the job market was O.K. but not great, and the boom was never powerful enough to produce significant inflationary pressure. Mr. Summers went on to draw a remarkable moral: We have, he suggested, an economy whose normal condition is one of inadequate demand — of at least mild depression — and which only gets anywhere close to full employment when it is being buoyed by bubbles.

I’d weigh in with some further evidence. Look at household debt relative to income. That ratio was roughly stable from 1960 to 1985, but rose rapidly and inexorably from 1985 to 2007, when crisis struck. Yet even with households going ever deeper into debt, the economy’s performance over the period as a whole was mediocre at best, and demand showed no sign of running ahead of supply. Looking forward, we obviously can’t go back to the days of ever-rising debt. Yet that means weaker consumer demand — and without that demand, how are we supposed to return to full employment?

Again, the evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.
It's really quite remarkable what lengths reasonably intelligent people will go to in order to hold onto their conceptual models while ignoring the obvious. The idea that "population growth" is responsible is obviously ridiculous in light of the vast number of people out of work; older people consume considerably more than younger people with no money do anyhow.

The mainstream economists are flailing around with no answers, completely ignoring the fact that this is the very problem of excess credit that was predicted for decades by those whose models take it into account. We're not mysteriously trapped into a normal state of mild depression, we're simply choked with debt, government interference, and debt-based malinvestment.

The debt has to be cleared from the system. There are two ways out. Hyperinflation or debt-default. The latter is the better, wiser, and safer choice.

Labels:

118 Comments:

Anonymous FUBAR Nation Ben November 21, 2013 9:07 AM  

Vox, what do you expect will happen to the private and state pension funds due to QE? Where will they go for yield, because the 8% return assumptions they make are insane in this economic environment?

Anonymous Idle Spectator, Economist Extraordinaire November 21, 2013 9:08 AM  

The terrain is based on the model, and that is MATH!

Blogger Positive Dennis November 21, 2013 9:09 AM  

You could have modest inflation, modest default, modest budget cuts and modest tax increases.

Anonymous VD November 21, 2013 9:10 AM  

You could have modest inflation, modest default, modest budget cuts and modest tax increases.

That won't work. Too much debt.

Blogger Nate November 21, 2013 9:11 AM  

"There are two ways out. Hyperinflation or debt-default. The latter is the better, wiser, and safer choice."

I agree 100%. Which is why I've called you such an economic polly anna.

Blogger Nate November 21, 2013 9:11 AM  

"That won't work. Too much debt."

Well... it could've worked 50 years ago.

Blogger James Dixon November 21, 2013 9:18 AM  

> ...in a vain attempt to explain away the fact that no amount of stimulus is working as expected....

Paraphrasing; We're in a depression and spending money hasn't pulled us out! Panic, panic! What can we do??? Oh, I know, spend more money!!!

Anonymous Sigyn November 21, 2013 9:19 AM  

"Yet that means weaker consumer demand — and without that demand, how are we supposed to return to full employment?"

I dunno, Paul, how DO you make sure your citizenry gets to its right levels of employment when the jobs are being increasingly taken by non-citizens?

I can't imagine...

Blogger El Borak November 21, 2013 9:31 AM  

how DO you make sure your citizenry gets to its right levels of employment when the jobs are being increasingly taken by non-citizens?

I know, let's raise the minimum wage. That'll show 'em something or other.

Anonymous Stilicho November 21, 2013 9:32 AM  

I dunno, Paul, how DO you make sure your citizenry gets to its right levels of employment when the jobs are being increasingly taken by non-citizens?

I can't imagine...


Duh, you make them citizens and give them more stuff paid for by the original productive citizens! It's Common Core Math, so it can't be wrong!

Anonymous Stg58/Animal Mother November 21, 2013 9:35 AM  

You idiots are not taking into account the area under the curve! There's no way this is scientifically accurate! I am a Ph.d!

Anonymous Brother Thomas November 21, 2013 9:37 AM  

>>> "It's really quite remarkable what lengths reasonably intelligent people will go to in order to hold onto their conceptual models while ignoring the obvious."


As you have stated before, man is not a rational creature, he's a rationalizing creature. He will spend an enormous amount of time, money and resources attempting to justify his preconceived notions.... evidence to the contary, no matter how obvious, be damned.

Anonymous Peter Garstig November 21, 2013 9:37 AM  

They will choose the slow death. I tend to think that this might all take longer than anticipated here.

Blogger IM2L844 November 21, 2013 9:38 AM  

Am I just being ignorantly paranoid or do most people not understand what a precarious economic situation the world is in? It seems to me there is a very real potential for any number of events that might trigger a cascading sell off of American assets. I'm guessing the resulting inflation and the consequentially inevitable rising interest rates could be catastrophic for the entire world.

Do I have it all wrong here?

Anonymous Stilicho November 21, 2013 9:43 AM  

I saw a black swan on the way to the range this week. Omen?

Anonymous Alas November 21, 2013 9:45 AM  

If you are borrowing in order to transfer money to vibrants, debt default doesn't really help you. Yeah, you cleared the slate today, but tomorrow the vibrants will still have their hands out and now you can't borrow any more, too bad so sad.

Anonymous Josh November 21, 2013 9:47 AM  

Obviously...we need to declare war on the moon!

Anonymous Alexander November 21, 2013 9:54 AM  

If we took all the bureaucrats of the supranational organizations and forced them to fight to the death, how much of the debt could be recouped on admission fees?

Gotta start somewhere!

Blogger JartStar November 21, 2013 9:56 AM  

I'm more amazed at what he did admit in that article.

Anonymous Cap't Feral November 21, 2013 10:03 AM  

"Obviously...we need to declare war on the moon!"

That would be lunacy!

Anonymous Roundtine November 21, 2013 10:10 AM  

The mainstream economists are flailing around with no answers, completely ignoring the fact that this is the very problem of excess credit that was predicted for decades by those whose models take it into account.

If you read Krugman and Summers description of the economy, their policy makes no sense, yet if you look at it from the perspective of debt deflation, the policy proposals make sense in that they are aimed at causing hyperinflation. Krugman is "right" to always want a bigger stimulus, more spending, more printing because when the goal is inflation, that'll do it.

It's amazing though to see mainstream economic ideas about debt. On another site, one guy was arguing that not only is one person's debt another's asset (so it's a wash), but that if you say someone in the future is worse off due to inflation, then someone else in the future must also be better off as well, because one person's loss in this game is the other's gain.

Blogger Dan Hewitt November 21, 2013 10:11 AM  

Paul Krugman on August 28, 2009:
“Contrary to what some think, we’d actually expect growth over the next decade to be somewhat above trend, as the economy picks up some of the current slack. That’s what the historical record tells us actually happens.”

http://krugman.blogs.nytimes.com/2009/08/28/the-burden-of-debt/

Anonymous Anonymous November 21, 2013 10:13 AM  

Am I just being ignorantly paranoid or do most people not understand what a precarious economic situation the world is in? It seems to me there is a very real potential for any number of events that might trigger a cascading sell off of American assets. I'm guessing the resulting inflation and the consequentially inevitable rising interest rates could be catastrophic for the entire world.

Do I have it all wrong here?


Yes. Your optimism is at odds with reality.

Anonymous Will Best November 21, 2013 10:17 AM  

Problem is massive default ravages the bureaucrat class because that is where all their pension money is being stored. So it will never get done.

Blogger IM2L844 November 21, 2013 10:28 AM  

Yes. Your optimism is at odds with reality.

That's reassuring. Well, it's 5 o'clock somewhere. ;)

Anonymous John in Highland Park November 21, 2013 10:30 AM  

"Hyperinflation or debt-default. The latter is the better, wiser, and safer choice."

Agreed, but isn't the historical narrative one of currency debasement and putting the problem off for as long as possible. If we take our medicine and default, which I view as not politically possible, then are we not then discussing siesmic economic, societal, and political changes...i.e. French Revolution, Bolshevik Revolution, Weimar Germany as possible outcomes? The current political class will not give up power voluntarily which is what a default would lead to in my view.

Anonymous Steveo November 21, 2013 10:31 AM  

VD - The debt has to be cleared from the system. There are two ways out. Hyperinflation or debt-default. The latter is the better, wiser, and safer choice.

I agree 100% as well.
IMO that means hyperinflation. It is impossible for the progressive/socialist/communist to the better, wiser, safer thing in this circumstance. And then, when the USD loses reserve currency status; a tsunami of dollars coming out of the world wide woodwork to flood the market will be the real kicker. Silver's a buy right now - and 7 years from now when I'm shopping at 100 Dollar General, I'll be glad I put some back for a rainy score of years.

Blogger Nate November 21, 2013 10:33 AM  

"The latter is the better, wiser, and safer choice."

This should've been my whole debate strategy.

Because when have they ever made the better, wiser, safer choice?

Blogger Nate November 21, 2013 10:34 AM  

"And then, when the USD loses reserve currency status; a tsunami of dollars coming out of the world wide woodwork to flood the market will be the real kicker."

Exactly.

Anonymous Krul November 21, 2013 10:35 AM  

Paul Krugman - [I]f Mr. Summers is right, everything respectable people have been saying about economic policy is wrong, and will keep being wrong for a long time.

It's a good thing Mr. Krugman isn't "respectable". Dodged a bullet there, he did.

Mr. Summers began with a point that should be obvious but is often missed: The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed.

What do Keynesians mean when they say the economy is "depressed"? He's clearly not saying that there is a recession or that statistical measures of economic well being are negative, so what is he saying? What exactly makes him think that the economy could be less "depressed" than it currently is, and if it can't as Mr. Summers suggests then how can you call it "depressed"?

Anonymous Stilicho November 21, 2013 10:53 AM  

Now all Krugman needs to figure out is how to print a lot more money, divert it to consumers, and convince them to spend it, borrow more, spend that, etc. And it needs to be done at a rate that exceeds the historic rate of aggregate debt increases in order to "grow" our way out of this depression. Of course, it has to be continued indefinitely as well: you cannot dismount the inflation tiger or you'll lose a big chunk of your ass. Economists call this deflation.

Anonymous TWS November 21, 2013 10:55 AM  

The key will be whether confiscation is tried before default. If they confiscate we'll know they've given up and will start looking for new hosts.

Any nation still solvent at that point ought to keep an eye on their silverware.

Blogger Nate November 21, 2013 10:55 AM  

"Agreed, but isn't the historical narrative one of currency debasement and putting the problem off for as long as possible. If we take our medicine and default, which I view as not politically possible, then are we not then discussing siesmic economic, societal, and political changes...i.e. French Revolution, Bolshevik Revolution, Weimar Germany as possible outcomes?"

clearly you're new here.

Anonymous TWS November 21, 2013 11:00 AM  

If they were serious about stimulating the American economy (as opposed to enriching the rent takers) they would have simply paid American mortages with the first couple rounds.

Americans would have trillions more to spend and invest and it was our and our children's money in the first place. Why enrich foriegn bankers anyway?

Blogger Nate November 21, 2013 11:00 AM  

"The key will be whether confiscation is tried before default."

doesn't matter. There isn't enough to confiscate.

Anonymous TWS November 21, 2013 11:02 AM  

Doesn't matter but it will reveal their motives for all to see.

Blogger Nate November 21, 2013 11:03 AM  

"Doesn't matter but it will reveal their motives for all to see."

It didn't in Cyprus.

Anonymous Josh November 21, 2013 11:04 AM  

Agreed, but isn't the historical narrative one of currency debasement and putting the problem off for as long as possible. If we take our medicine and default, which I view as not politically possible, then are we not then discussing siesmic economic, societal, and political changes...i.e. French Revolution, Bolshevik Revolution, Weimar Germany as possible outcomes? The current political class will not give up power voluntarily which is what a default would lead to in my view.

Countries default all the time. Russia did so less than two decades ago.

Blogger Nate November 21, 2013 11:09 AM  

"Countries default all the time. Russia did so less than two decades ago."

Iceland did it less than 5 years ago.

Anonymous zen0 November 21, 2013 11:11 AM  

What is the obsession with full employment?

The fat lady at the bus depot in Chapala, Mexico is employed. She takes a dirty mop and smears the floor once every fifteen or twenty minutes, then sits down and has a smoke.

She is fully employed.

Anonymous Peter Garstig November 21, 2013 11:12 AM  

How much was the bail-in in Cyprus again? What is the threshold of bail-in for people to explode? 50%, 75%, 90%?

I think it's pretty high. It's for the common good, and people like to be good.

Blogger JartStar November 21, 2013 11:15 AM  

"doesn't matter. There isn't enough to confiscate."

That doesn't mean they won't take what they can get. National governments are already making plans to confiscate money from "tax dodgers" who put their money overseas.

Anonymous civilServant November 21, 2013 11:17 AM  

The debt has to be cleared from the system.

You mean the U.S. dollar. Yes?

There are two ways out. Hyperinflation or debt-default. The latter is the better, wiser, and safer choice.

One reads that the entire purpose of the entire system is to obligate with permanent debt. Why would those who benefit from this replace it with anything different?

Blogger Nate November 21, 2013 11:17 AM  

"That doesn't mean they won't take what they can get."

Not saying they won't try confiscation. I'm saying confiscation won't prevent the economic TERRIBLESHRIEKINGDOOM

Anonymous civilServant November 21, 2013 11:19 AM  

As you have stated before, man is not a rational creature, he's a rationalizing creature. He will spend an enormous amount of time, money and resources attempting to justify his preconceived notions.... evidence to the contary, no matter how obvious, be damned.

Yes. And for most this is an entirely rational and efficient course of action. Those who attempt to take into account every little fact that comes along before they act become paralyzed. "In the long run we're all dead" and all that.

Anonymous civilServant November 21, 2013 11:21 AM  

I'm saying confiscation won't prevent the economic TERRIBLESHRIEKINGDOOM

Not everywhere simultaneously. But on a local basis yes it will.

Anonymous Anonymous November 21, 2013 11:22 AM  

Steveo November 21, 2013 10:31 AM

.... Silver's a buy right now -...


Could you please recommend a place to buy silver?

thx

t

Anonymous civilServant November 21, 2013 11:28 AM  

How much was the bail-in in Cyprus again? What is the threshold of bail-in for people to explode? 50%, 75%, 90%?

Most people will not "explode" willy-nilly. They need a goal towards which to explode ... so to speak. For example in the Los Angeles riots we see people "exploding" and burning down their own neighborhoods but Cypriots will not act so irrationally. Finance is the only industry Cyprus has and Cyprus is an island. If (as might be advocated here) they hang their bankers and burn down their banks they will be left with nothing with which to continue. There is nowhere for the people to go. If there were any alternatives for them then they might indeed "explode".

Anonymous Ferd November 21, 2013 11:28 AM  

Ramp up a war with China!! WooHoo....a big chunk of debt is erased and we have to go back to manufacturing our own stuff. Seems like a winning economic policy. That and we can test some of those old nukes just wasting away in storage.

Blogger Nate November 21, 2013 11:31 AM  

" Finance is the only industry Cyprus has and Cyprus is an island. If (as might be advocated here) they hang their bankers and burn down their banks they will be left with nothing with which to continue"

You sound like a liberal.

The old dead banks will be replaced with new banks healthy banks. New banks are born every day.

Blogger James Dixon November 21, 2013 11:35 AM  

> Could you please recommend a place to buy silver?

1) Do you mind your purchase being tracked? If not, any of the major online vendors are probably good.

2) Do you want silver bullion or silver coins? If coins, collector's quality or junk silver? Different vendors have different specialties.

I've dealt with Apmex before. I have a friend who uses Kitco, I can't honestly say I know enough to give good advice as to who's better.

Blogger El Borak November 21, 2013 11:44 AM  

simplytimothy: Could you please recommend a place to buy silver?

AJPM has always worked for me when buying or selling in bulk. But I recommend that you haunt your local coin shows and vacuum up all the old junk* silver you can. With cash.

* defined as pre-1965 US dimes, quarters, and halves sold as '$x times face value', not as individual coins.

Anonymous TWS November 21, 2013 11:44 AM  

America isn't Cyprus. You can eat all the eggs you want but once you eat the chicken you're done. Cyprus is nothing there's always a Cyprus. If they're going to kill their host it proves they're nothing but fleas and hopefully (if that is true) people will see it as deliberate malice rather than bumbling incompetence.

Anonymous Anonymous November 21, 2013 11:51 AM  

El Borak--thanks

James Dixon. Ann Barnhardt had a post where she bought silver dimes (and quarters?) in bulk from an online outfit. I could not find a reference to it on her new site. Her argument was its a known weight of silver.

t.



Anonymous p-dawg November 21, 2013 11:52 AM  

@simplytimothy: I recommend that you visit a gold/silver broker in your area. Not a "we buy gold" place or a pawn shop, but a real broker. In my experience, it's best to see what and whom you're dealing with, and walking out of the store with your purchase feels a lot better than waiting on the mail. I generally ask for whatever's closest to the day's spot price. Numismatic value is chimerical. The more you spend, the better price on individual ounces you get. That's true in a lot of places but especially when dealing with precious metals. Buy a bag instead of a tube, buy a tube instead of single coins. (if you're buying coins). I recommend staying away from the very large bars (100oz or more) unless you are a champion weightlifter and/or you're extremely rich. Hope some of this helps.

Anonymous zen0 November 21, 2013 11:55 AM  

civil servant asserts:

Those who attempt to take into account every little fact that comes along before they act become paralyzed.

What about those who act without taking big facts into account? How smart is that?

One reads that the entire purpose of the entire system is to obligate with permanent debt.

Where does one read that?

Anonymous p-dawg November 21, 2013 11:55 AM  

Oh, and always pay cash. If they ask your name, tell them whatever you want, as long as it's not your name.

Blogger Nate November 21, 2013 12:00 PM  

'America isn't Cyprus. You can eat all the eggs you want but once you eat the chicken you're done. "

***chuckle*** America ain't the chicken. America is the worms in the Chicken's gut.

Blogger JCclimber November 21, 2013 12:15 PM  

Since guns are never off topic, quick question for some of the Ilk.

buying ammo online, good, bad, ugly? I thought about the gov't tracking my purchase and using it to determine that I had a gun, then decided I didn't care about that facet. I would have preferred untraceable cash purchases, but that runs up the expense a lot and there aren't any inexpensive sources within 30 miles anyway.

It is amusing that I'm about 3 miles from the border of a zip code that won't allow online purchases of ammo. All the more reason to stock up, in my opinion.

Blogger JCclimber November 21, 2013 12:18 PM  

I"m having trouble seeing what is wrong with the part quoted here. I guess I'll need to read the original.

Anonymous civilServant November 21, 2013 12:21 PM  

Finance is the only industry Cyprus has and Cyprus is an island. If (as might be advocated here) they hang their bankers and burn down their banks they will be left with nothing with which to continue

You sound like a liberal.

The old dead banks will be replaced with new banks healthy banks. New banks are born every day.


You sound fairly liberal yourself. "People ... you know ... do things."

But I have a question for you. You argue for hyperinflation. Over at Zerohedge one reads, "As Denninger noted, QE is deflationary." I understand this to mean that creating more debt money decreases the amount of money available for non-debt-payment economic activity. This would seem to preclude any possibility of debt currency hyperinflation as commonly understood. Please comment.

Anonymous Jack Amok November 21, 2013 12:22 PM  

We have, he suggested, an economy whose normal condition is one of inadequate demand ...

Dumb, stupid Keynesians. Always thinking about demand, never thinking about productivity. Hunger doesn't make the food grow, work does. If we had fewer people shuffling paper (including debt instruments) and more people making stuff, our economy would be fine. Shoot the lawyers, hang the politicians, launch the bankers into space and burn the HR minions at the stake. One generation later, the economy will be astonishingly good.

Because when have they ever made the better, wiser, safer choice?

Generally right after they've run out of worse, dumber, more disastrous ones. Unfortunately they're awfully creative at coming up with bad ideas. I expect they'll invent a new sort of stupidity this time. Our great, great, great grandkids will study it like we study the Tulip Bubble.

Blogger JCclimber November 21, 2013 12:26 PM  

Ahhhhh, the stupid, it burns!!!! I finally read the linked article. The quote below really shows how this guy is not actually stupid. Just what he says seems stupid. Since we know he isn't stupid, or at least low IQ, we are left searching for another explanation. I believe it is because he has consciously chosen to side with Satan. Perhaps not in person, but by denying the creator God and the historical record, Krugman has embraced the core of folly.

Thanks Vox for continuing to shine the light of truth on these cockroaches. It is a continual education on just how open the elite are about their goals and methods in attacking the foundations of a moral and strong nation.

"More broadly, if our economy has a persistent tendency toward depression, we’re going to be living under the looking-glass rules of depression economics — in which virtue is vice and prudence is folly, in which attempts to save more (including attempts to reduce budget deficits) make everyone worse off — for a long time.

I know that many people just hate this kind of talk. It offends their sense of rightness, indeed their sense of morality. Economics is supposed to be about making hard choices (at other people’s expense, naturally). It’s not supposed to be about persuading people to spend more. "

Blogger JCclimber November 21, 2013 12:30 PM  

Also, the last two paragraphs I quoted above reinforce the point that Jesus made, to not store your money where rust degrades and thieves break in and steal.
The thieves are stealing the value of your savings, your FRNs, your stocks, your pensions, your 401ks and IRAs.
Plan your personal economics accordingly.

Blogger Ashley November 21, 2013 12:32 PM  

simplytimothy:

"Could you please recommend a place to buy silver?"

You should buy copper or steel. You get so much more for your money!

But if you insist, I highly recommend DBS Coins. Not a huge dealer and limited selection, but very low markup on small to medium size purchase amounts and absolutely impeccable service.

And in case you didn't get the joke above, I'm recommending that you follow in the footsteps of giants and buy gold instead.

Anonymous Brain Death November 21, 2013 12:35 PM  

JCclimber: Try Cabelas online. www.cabelas.com They offer free and/or reduced shipping from time to time which helps with such a heavy package. There are still periodic shortages that may affect the selection, but you are going to run into that whereever you shop. Good luck.

Anonymous Krul November 21, 2013 12:37 PM  

"More broadly, if our economy has a persistent tendency toward depression, we’re going to be living under the looking-glass rules of depression economics — in which virtue is vice and prudence is folly, in which attempts to save more (including attempts to reduce budget deficits) make everyone worse off — for a long time.

I know that many people just hate this kind of talk. It offends their sense of rightness, indeed their sense of morality. Economics is supposed to be about making hard choices (at other people’s expense, naturally). It’s not supposed to be about persuading people to spend more. "


Isn't Krugman here implicitly admitting that the rule for non-depression economic situations is to limit deficit spending and save?

Anonymous Stg58/Animal Mother November 21, 2013 12:41 PM  

JCClimber:

One stop shopping: www.gunbot.net.

Blogger James Dixon November 21, 2013 12:47 PM  

> Ann Barnhardt had a post where she bought silver dimes (and quarters?) in bulk from an online outfit.

Apmex offers that. That's what I meant by junk silver.

Of course, if you're not preparing for TEOTWAWKI (or at least the collapse of the dollar, which for many would amount to the same thing), then you may just want to get something like SLV instead. It's a lot easier to buy and sell it, but all you have is a paper claim.

Blogger hga November 21, 2013 12:49 PM  

JCclimber: One thing I've noticed is that the ammo companies I like to buy from have the world's worst record of keeping track of your past purchases ^_^.

I like Natchez Shooters Supplies, good prices and close to me so shipping isn't so bad. If you're worried about what can be gleaned from your credit card records and the like, a vendor like them or Cabelas (who are first rate) who sell a wide variety of stuff might help a bit. E.g. are you buying 1,000 rounds of Federal 5.56 mm Lake City seconds or a hunting blind, game cameras, and a few boxes of hunting ammo?

Anonymous patrick kelly November 21, 2013 12:56 PM  

+1 for gunbot.net.

Get over fears of being on lists. If you don't I would suggest you will not suddenly become braver when you need those guns, bullets and coins.

Burying guns only makes it easier to bury you. Yeah, there's a time to move or hide, but if you don't have a plan to use them, or get them to someone who will, how is having them in the ground going to help anything? They gonna release you from the FEMA camps to visit them sometime?.....You gonna' dig them up exactly when? for what?



Anonymous civilServant November 21, 2013 12:58 PM  

buying ammo online, good, bad, ugly? I thought about the gov't tracking my purchase and using it to determine that I had a gun, then decided I didn't care about that facet.

Well. Were I in charge of such surveillance ....

If you or anyone in your family ever have bought a gun you already are flagged by the algorithms. If you buy ammunition not matching your guns of record then this will be another flag. If you buy large quantities this will be another flag. If you buy large quantities of ammunition not matching your guns of record this will be another flag. And so on.

Cross-matching may then begin. If your gas card or license plate number show up regularly in this non-online-purchase area especially after your on-line purchases or if large numbers of gas cards or license plate numbers from gun owners in this non-online--purchase area regularly show up near you then this will be a cross-flag. And so on.

Next comes focus. If you accumulate enough flags then your data field may receive an eyes-on review.

Resource management and discretion then play a role. You may warrant minor intervention but be passed over for many years simply because there are not enough agents to cover low priority cases. Someone may commit a crime with ammunition you appear to supply and thus your case may be promoted to a higher intervention priority for which agents are available. Overt laws may be passed or covert policies implemented mandating control of such issues and thus your case suddenly requires mandatory intervention. This intervention may take many forms ranging from an IRS audit of your sales activity to blue lights in your driveway at 0400 to complete lock-up of all your finances until certain questions are answered - and they may not actually care if the questions ever are answered.

It is all about priorities.

Anonymous mistaben November 21, 2013 1:01 PM  

Stop it, civilServant. You're frightening the children!

Anonymous patrick kelly November 21, 2013 1:03 PM  

"Stop it, civilServant. You're frightening the children!"

I think it's damage control. The children frighten him and the other servants...

Blogger RobertT November 21, 2013 1:05 PM  

I agree. This is perfectly obvious. Plus I agree with all the potential disasters that could be awaiting us in the future. Most of them are unavoidable.

But ...

I have noticed something in my clientele. There's been a lot of attrition since 2008. Judging by the commercial vacancies around here, i'd say around 50%. But those companies strong enough to weather it this far are now showing unusual signs of vibrancy. Revenues and profits are starting to shoot up. Some of them, many of them in fact, to levels they only dreamed about pre-2008.

I have begun to tell my clients, and those you pay attention to me, that I have changed my prognosis and firmed up my expectations for the 21st century. I am now expecting the 21st century to be a combination of deadly chaos and turbulence combined with the biggest and craziest boom of all time. Where they fall in this scenario depends on continually improving their infrastructure to take advantage of the best business practices as they develop.

This is much more important than creativity. Creativity can be copied. (To wit, Samsung and Android copying iPhone.) Infrastructure can be copied too, but it's tons harder to achieve. That is why we have begun to push infrastructure in our practice.

Amazon is the future of business.
Google is the future of knowledge.
and, of course, our firm is the future of professional services.

Blogger JCclimber November 21, 2013 1:09 PM  

Thanks ya'll. Calguns also recommended those online ammo retailers. I went with Lucky Gunner.

I know that all credit card transactions are permanently archived, so I just needed to decide if I wanted to appear on their radar. The gun I purchased was a cash transaction with zero paperwork needed, however the ammo it requires is shared with the AK47. So I had to decide if I wanted to appear on the radar or not, when the original purchase was invisible to them.

Then I found out that most ammo sales in Kalifornia have a video record so I figured whatever, I'll just fade into the mass amounts of other online purchasers. Even in Kali. Perhaps my molon labe sticker should get put up somewhere.

Anonymous Brain Death November 21, 2013 1:11 PM  

Guns an ammo (at this point, at least) are fungible. What happened to that 9mm pistol I bought 5 years ago? Sold it. What happened to all that 3000 rounds of 9mm ammo I bought? Fired it through the pistol before I sold it. A full gun registration scheme would make things more strict, but I anticipate there are ways to outsmart that as well.

Also, never go canoeing with your entire gun collection in the canoe.

Anonymous Steveo November 21, 2013 1:27 PM  

simplytimothy -

Buy silver, in person at local coin/bullion stores in a major city near where you live. Ask around and choose the one or two with excellent reputations (and lower premiums). If they do not have Silver Eagles or Maple Leafs or one of the other commonly traded 1 oz coins, on hand - don't buy. If you give them money, they should put Silver in your hand. If they have pre-65 US Coins (Half dollars, Qtrs & Dimes) on hand, buy that next (which is the least expensive way to buy silver that I have found & it's well understood by the American public). I personally won't touch the paper market with a ten foot pole.

FWIW, I believe owning physical metals to be part of a wealth protection strategy & not for trading purposes (as in trading in the market often). I believe the next rush to purchase will (months? a year? two?) see many people jump into silver for the same reason... they can't afford gold and they want something. When is just a WAG. But I would be surprised to see silver prices making it below $17 in the near term - in any case I call it a buying opportunity all the way down during the next weeks. When it bottoms and starts up again, I believe availability will dry up in a hurry, but at the moment, local stores have many hundreds and hundreds of ounces of Silver on hand for sale.

Blogger James Dixon November 21, 2013 1:29 PM  

> Well. Were I in charge of such surveillance ....

We really don't need to know your wet dreams, civilServant.

Anonymous patrick kelly November 21, 2013 1:29 PM  

"Why were you canoeing with all your guns?"

"We wanted to hunt snipe on the island".

Anonymous Anonymous November 21, 2013 1:35 PM  

I have noticed something in my clientele. There's been a lot of attrition since 2008. Judging by the commercial vacancies around here, i'd say around 50%.

I was at a tire place yesterday, and the guy took a phone call from someone looking for used tires. He said his supply is lower than ever because everyone's driving them until they're completely shot. A friend in a service industry said everyone asks for used parts, even if it only means a small discount. I see storefronts sitting empty that have been that way for a year or more. And I live in a fairly stable area that wasn't noticeably hit by the mortgage bust.

The opening scenes of Atlas Shrugged -- when Eddie is walking through the city and noting the empty windows, realizing it bothers him but not being able to figure out why because he's gotten used to it -- are starting to seem very familiar.

Anonymous Jack Amok November 21, 2013 1:47 PM  

Well. Were I in charge of such surveillance ....

No doubt you'd have top men - TOP...MEN... - building the website.

"Why were you canoeing with all your guns?"

Well, I just saw a Brady Campaign ad, and I was so overcome with grief at owning those horrible, nasty, raciss and sexissst guns, that I went right out and threw them all in the river...

Or, y'know, just say you turned them in at one of those "no questions asked" gun buy-back events.

Anonymous civilServant November 21, 2013 2:13 PM  

What happened to that 9mm pistol I bought 5 years ago? Sold it.

And if they never ask? If they simply presume and act?

Anonymous Josh November 21, 2013 2:19 PM  

No doubt you'd have top men - TOP...MEN... - building the website.

You mean the government is accidentally going to ship ammo to everyone?

I assume that's what's going to happen with these top men in charge.

Blogger Eric November 21, 2013 2:30 PM  

Countries default all the time. Russia did so less than two decades ago.

And Argentina did last... hmmm what day is it?

Blogger Nate November 21, 2013 3:02 PM  

"I understand this to mean that creating more debt money decreases the amount of money available for non-debt-payment economic activity. This would seem to preclude any possibility of debt currency hyperinflation as commonly understood. Please comment."

What's to comment about? If you'd paid attention during the debate you'd see the was already roundly dealt with.

Hyper inflation is what happens when no one wants dollars anymore.

Anonymous Brain Death November 21, 2013 3:03 PM  

"And if they never ask? If they simply presume and act?"

Can't prove a negative.

Blogger Nate November 21, 2013 3:05 PM  

"You sound fairly liberal yourself. "People ... you know ... do things.""

That's not liberal. Liberal is... "Governments ... you know... do things". Business doesn't need government's help to get started. Banking is a fantastic way to make money. The morons in iceland shouted that the loss of the big banks there would mean the end as well. And low and behold... the sky did not fall.

New players enter the market. Problem solved.

Anonymous civilServant of Borg November 21, 2013 3:39 PM  

You will all be assimilated. Resistance is futile.

Anonymous patrick kelly November 21, 2013 4:11 PM  

""And if they never ask? If they simply presume and act?"

Can't prove a negative."

I think he means the JBTs show up, break your door down, hold your family at gunpoint, and thoroughly search and tear apart everything looking for those guns you lost or sold.

Anonymous Stilicho November 21, 2013 4:11 PM  

One reads that the entire purpose of the entire system is to obligate with permanent debt.

Where does one read that?

My guess is that he read it in his employee handbook.

Blogger James Dixon November 21, 2013 4:21 PM  

> I think he means,,,

That's what he's carefully trying to imply without actually saying it, yes.

Of course, he's first assuming a great deal of database connectivity which simply doesn't exist, and as demonstrated by the Obamacare website, isn't within our government's competency to create.

Blogger Animal Uncontrol November 21, 2013 4:26 PM  

"I think he means the JBTs show up, break your door down, hold your family at gunpoint, and thoroughly search and tear apart everything looking for those guns you lost or sold."

I agree that's what he was alluding to. Good luck with that, though. Are they going to strip every home in the country to the studs looking for contraband? Even the most hard core government supremacist is going to have a really hard time promoting THAT as a good idea.

As much as some people may WANT that to happen, I think any serious gun control initiatives are off the table for a while: The country is broke, its a logistical impossibility, and there is dwindling political support for it.

Anonymous Anonymous November 21, 2013 4:28 PM  

Steveo and others, thanks.

I have found I semi-local shop I can check out.

Kitco shows silver at ~$20/oz. I am sure I will have to pay more than that from a local dealer. What is fair? When do I run?

thx.

t

Anonymous Noah B. November 21, 2013 4:46 PM  

You could do a lot worse than buying through Kitco or Northwest Territorial Mint. You will hear so much crap from unscrupulous dealers it's stunning.

Anonymous Steveo November 21, 2013 5:05 PM  

simplytimothy -

Today I would buy (1) 1 Oz .Silver Canadian Maple Leaf for $22.57... that's based on a silver price of 20.09/oz
I would not buy (1) 1 Oz. Silver Eagle for $24.72 as the premium is ridiculously high.

Also, there are volume discounts to look at and consider.

Blogger tz November 21, 2013 6:06 PM  

There is one orthogonal issue with the hyperflation v.s. default. Please do either as soon as possible.

Japan has lost two decades since its just a hair short of 40k Nikkei peak. It was able to delay either massive defaults or hyperinflation (they appear to be going to the latter path, but even so, slouching, not running).

America had a completely horrible depression in 1920-21, but no one remembers it because the default "rebooted" the economy. "The Great Depression" was Great more because of the stupid attempts to put off the pain and extend it out until or through WW2.

"The Return of the Great Depression" has been and will be the continuation of the partial bailouts, ignoring the flashing neon "bankrupt" signs for financial institutions, and transferring more wealth into black-holes until something breaks.

One can keep the brain-dead, comatose economy on the respirator indefinitely if you are willing to continually spend to do so. Yet the economy is a phoenix. Let it die, and it will be reborn immediately from the ashes.

Anonymous patrick kelly November 21, 2013 6:24 PM  

"Good luck with that, though. "

Yeah, that's what I think too, guess I'm Mr. Obvious today.... Once word gets out stuff like that is going down unintended consequences tend to grow and gain momentum......

Anonymous mistaben November 21, 2013 6:35 PM  

"Good luck with that, though."

Exactly. I know more than a couple of people who have already given some thought to how they would respond to such a situation.

Blogger JCclimber November 21, 2013 6:57 PM  

The databases have already been built. The data has been hoovered already, and has been for several years.
What they are working on now is a way to get them to talk to each other, correlate the data.
And then figure out what patterns to look for, write the programs to search and sieve the data, build correlations, and give the ability to tie anonymous emails and posts to credit card accounts, web traffic, voting patterns, travel patterns, and so on.

Can't do it very well. Yet. But they're not throwing the data out, and like a cold case where they never tossed out the murder evidence, someday they will be able to make the connections.

I'd just prefer to make this difficult for them and let them go after the easier targets, to give warning and time to put plan C into action.

Blogger Nate November 21, 2013 7:08 PM  

"The databases have already been built. The data has been hoovered already, and has been for several years. "

Whoever told you this... has no idea what they are talking about... and likely just made it up to impress you.

There are no inter-connected data-bases. There never have been. The people in charge aren't even remotely capable of understanding what goes into creating such a thing.

Anonymous Noah B. November 21, 2013 7:22 PM  

Total Information Awareness, Nate.

Total. Awareness. Of Information.

Blogger JCclimber November 21, 2013 7:30 PM  

Nate, not everyone working for the NSA is a government idiot.
And, they were able to tell me that much of what they were working on, several years ago.

Not someone who would lie to me, nor even exaggerate. But they also expressed that the work is not moving very fast, which surprises no one. But the data is still there, and growing.

Blogger Nate November 21, 2013 7:50 PM  

"Nate, not everyone working for the NSA is a government idiot."

Nope. they are very bright. but that doesn't change the fact that there are paper records spread all over gun stores that have been kept that way undigitized for decades... and digitizing them is NEVER going to happen.

and until they are digitized... there is no database... at least no database worth a damn.

Blogger Nate November 21, 2013 7:52 PM  

go to an average murder investigation where they found the gun... and see how long it takes them to figure out who's gun it is and where it was bought.

If someone doesn't tell them outright who's it is... they don't have a prayer. Often when they find guns in houses of suspects they can't actually find any paper trail to link the gun to anyone.

Blogger James Dixon November 21, 2013 7:52 PM  

> Can't do it very well. Yet.

Correct. The information is all there (well, some of it, but best not to discuss the details). But the connectivity and searching capability isn't. Maybe it will be, eventually. But the odds are that things will change dramatically before we reach that point. One way or the other.

Anonymous Whatever November 21, 2013 9:42 PM  

"There are no inter-connected data-bases. There never have been. The people in charge aren't even remotely capable of understanding what goes into creating such a thing."

Really? A simple search revealed a December 2003 report by the Markle Foundation Task Force, in conjunction with Congress, proposed a detailed and massive system of interconnected commercial and government databases for a host of federal agencies to access. I would imagine that within the past decade a host of projects have been dedicated toward that end.

Blogger rycamor November 21, 2013 10:02 PM  

Whatever November 21, 2013 9:42 PM

"There are no inter-connected data-bases. There never have been. The people in charge aren't even remotely capable of understanding what goes into creating such a thing."

Really? A simple search revealed a December 2003 report by the Markle Foundation Task Force, in conjunction with Congress, proposed a detailed and massive system of interconnected commercial and government databases for a host of federal agencies to access. I would imagine that within the past decade a host of projects have been dedicated toward that end.


And I don't think you understand just how hard it is to actually make that all happen. They can "propose" anything they want. And I'm sure tons of contractors will gladly give them the big ol' "can do" message, and get to work billing those hours. Most likely the result is still a big mess.

I've done enough database integration projects to know that just connecting one organization's database to another's is usually the job from hell. Trying to connect hundreds or thousands all at once is generally a pipe dream. It's quite possible that over the past ten years real progress has been made, but it is just as possible that there has been ten years of tail-chasing.

Of course They want everyone to think they have a perfect and complete real-time grasp on what is going on, because intimidation is the real key, but that doesn't mean they actually have it.

Anonymous Jack Amok November 21, 2013 11:37 PM  

Really? A simple search revealed a December 2003 report by the Markle Foundation Task Force, in conjunction with Congress, proposed a detailed and massive system of interconnected commercial and government databases for a host of federal agencies to access. I would imagine that within the past decade a host of projects have been dedicated toward that end.

Why, I do declare. I think we've found the project manager for healthcare.gov.

Shouldn't you be busy doing a tech surge or something?

Anonymous Whatever November 22, 2013 12:17 AM  

Jack, don't be a knobshine. The point is that gummint is busy figuring out how to connect its vast network of databases, regardless if the task is monumental. From failure comes understanding, from understanding comes incremental success, from incremental success comes task fruition.

Blogger rycamor November 22, 2013 12:53 AM  

Actually, what worries me more is not that they will actually have a perfect database solution, but that they will have a giant kludge of a system that they *think* is perfect, ergo will trust whatever answers it spits out. I foresee lots of false positives and accidental disappearances in the works. (Tuttle, Buttle, anyone? Have you got a 27 b/6? Sorry, I'm a bit of a stickler for paperwork.)

Anonymous Jack Amok November 22, 2013 1:16 AM  

Shine your own knob, Whatever. The "gummint" may think they are figuring something out, but they're not. A task that is monumental for an organization with effective accountability systems may eventually get done. But an organization that shuns accountability (and the folks at the top set the tone) will fail at even slightly difficult tasks.

They wont' get the project done because the people working on it don't need to get it done to prosper, and the people who might actually care about having it don't know how to built it or manage people who can.

rycamor has the right idea. They'll decide they need a flashy operation to go with some press conference and take whatever crap spews out of the system and run with it. All the same to them. Take a hundred random names out of the phone book (hmmm, or the 21st century equivalent) and raid them, you're bound to find something illegal in a few houses (especially since everything is regulated - "well, no guns boss, but we did find a stash of 60 watt incandescent light bulbs in the back of the closet..."). So they crow about the few hits and ignore the misses, just like with drug raids today. Ooops, too bad we killed that grandmother and her dog, we had a tip there was a meth lab at that address. But you can't let a little think like that get in the way of ridding our streets of these deadly drug...

Their incentives are not compatible with finishing your uberbase.

Anonymous DonReynolds November 22, 2013 2:16 AM  

Medicine is basically a poison that is beneficial in small doses for targeted ailments. Those who think that a small amount is good, may imagine how ingesting vast quantities must be terrific, and will generally manage to kill themselves. (Aspirin is a good example.) Mr. Krudman is just such an individual. Like Homer Simpson, he has decided that something may be missing from his diet so he eats vast quantities of estrogen, which were left on the curbside with wire hangers, by the neighbor who just moved away. Krudman's medicine did not target the problem and he did not follow the directions on the label and the medicine was expired before he found it. What a surprise, to him, that it did not work. His answer, we just need to eat more of it.

Anonymous Anonymous November 22, 2013 7:11 AM  

Steveo and Noah B thanks.

Anonymous patrick kelly November 22, 2013 11:45 AM  

The more I work with computers and software the more I'm amazed any of it works.

Blogger JCclimber November 22, 2013 1:20 PM  

I'm looking at this from another viewpoint.
Person X does something that puts them on the government radar (like ask Obama an uncomfortable question like Joe the Plumber).
Government sends a tracer program through all their poorly linked databases, running the queries using information that they have already gathered using normal channels. They dig up all kinds of background info until they find some plausible grounds for taking action.

I'm not worried about them running an algorithm to search out "all owners of guns who might be able to shoot straight". Too many hits, and as has been pointed out, very low degree of accuracy.

Anonymous Chad November 22, 2013 4:05 PM  

Is it just me or does Krugman essentially say that if his solution does not work then apparently the problem was unsolvable to begin with? Does his hubris know no bounds?

Anonymous Whatever Jack November 23, 2013 12:45 AM  

Clearly, you are letting your own anti-government meme color your judgement.


“A task that is monumental for an organization with effective accountability systems may eventually get done.”


The accountability systems are in place. To what extent they have worked or will work varies according to political stripe. You are predisposed with finding fault regardless if their is judicious oversight.


“the people who might actually care about having it don't know how to built it or manage people who can.”

Where have you been? The wave of the future is having instant access to information. Having data available at a moment’s notice. Databases being able to “speak” to one another is at the forefront of several projects. The incentive is take that knowledge, make sense of that knowledge, find patterns, and make things more efficient. Private contractors are at the forefront of this expanding enterprise. The specifics is too large to accurately track given the severity of the security clearances and hoops one must jump through. The intelligence agencies and the State and Defense Departments require viable methods to acquire, accumulate, store, and process data. Nearly 900,000 civil servants, military personnel, and private contractors with top-secret security clearances are scanned into offices protected by electromagnetic locks, retinal cameras and fortified walls that eavesdropping equipment cannot penetrate. What the hell do you think they are doing?


“They'll decide they need a flashy operation....ridding our streets of these deadly drug.”



That entire rant is based on emotions. Are you on your period, or do you froth at the mouth with your rhetoric?


“Their incentives are not compatible with finishing your uberbase.”

I’m sure your sentiments are shared with the Secretary of Defense, the Joint Chiefs of Staff, the CIA, and the FBI. You’re right, their rate of return on this investment is miniscule. (rolling of eyes)

Post a Comment

Rules of the blog
Please do not comment as "Anonymous". Comments by "Anonymous" will be spammed.

<< Home

Newer Posts Older Posts