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Tuesday, January 12, 2016

THIS depression

I remember, when after publishing The Return of the Great Depression in 2009, various critics used to cite various "green shoots" reports in an attempt to taunt me for being incorrect. "What depression?" they would ask mockingly.

"Just wait," I would tell them. "We are in the early stages of a depression that is bigger than the Great Depression." Seven years later, even rosy-goggled mainstream economists like Brad DeLong are admitting that the situation is historically dire.
Economist Joe Stiglitz warned back in 2010 that the world risked sliding into a “Great Malaise.” This week, he followed up on that grim prediction, saying, “We didn’t do what was needed, and we have ended up precisely where I feared we would.”

Joe Stiglitz is right.

In the aftermath of 2008, Stiglitz was indeed one of those warning that I and economists like me were wrong. Without extraordinary, sustained and aggressive policies to rebalance the economy, he said, we would never get back to what before 2008 we had thought was normal.

I was wrong. He was right. Future economic historians may not call the period that began in 2007 the “Greatest Depression.” But as of now, it is highly and increasingly probable that they will call it the “Longest Depression.”
You don't say.... Remember, while I am certainly capable of being wrong, I am well-read, well-educated, and significantly more intelligent than the norm. So, even if I am wrong, I usually have a fairly solid set of facts and logic behind the position I am expressing.

Perhaps more importantly, and unlike most of those who opine on such matters, I have no dog in the hunt. While I would very much like the economy to be booming, I am not financially dependent upon saying so.  While the measures that Stiglitz and Krugman were pushing were absolutely and utterly wrong - the "extraordinary, sustained and aggressive policies to rebalance the economy" would have only made things worse, as what was needed was a huge round of bankruptcies to clear the zombie debt - they were right to observe that the Neo-Keynesian measures utilized were doomed to be ineffective.

I wish I had been wrong about the Great Depression 2.0. But I wasn't. And, as even Nate will likely admit now, I was also right about the global economy falling into worldwide deflation.

Unfortunately, this tends to indicate that I am likely correct about the world rapidly heading towards large-scale 4GW, including multiple civil wars, across more than one continent.

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116 Comments:

Anonymous KoranBurningFaggot January 12, 2016 12:12 PM  

Obviously Vox is a sorcerer and all of the bad things are his fault, not the people who forced banks to give non Asian minorities mortgages because credit ratings are racist.

Anonymous Jim Clay January 12, 2016 12:13 PM  

I enjoy reading your blog, but I wish that you included links to the source of your quotes.

Anonymous Faceless January 12, 2016 12:14 PM  

People who violently reject this stuff, pretend you're nuts at the time, then, when it becomes obvious, try to claim "Nobody saw it coming!" live in a bubble of delusion. It's funnier still when they are play-pretend self-described "rationalists" or members of the "reality based community" or FLS whatever the new euphemism is for liberal atheist, because you realize - the crutch that needs to be kicked out is their idea that, through various force mechanisms, they can get everybody to accept a delusion in place of objective reality.

No wonder they love the idea that economics is just animal spirits, and if they could get something with a really tight apple-shaped ass to run in front of the economy, it would be doing great.

Anonymous Faceless January 12, 2016 12:15 PM  

Just grab the whole paragraph, click "Search Google For..." and you hit the huffpo article.

Blogger dc.sunsets January 12, 2016 12:15 PM  

Vox, how much influence does Prechter's work exert on your position? While his forecasts have largely failed, the logic of his analytical approach seems unshakeable.

We've been in a Social Mood mania since 1995. It coincided with the largest credit bubble in recorded history. This filled an ocean of IOU-dollars debt. That ocean's turbulence caused dollar liquidity to slosh from one market to another, creating the very serial bubbles we see during the last 17 years.

Mass optimism yielded the financial manias, but it also yielded the social fads we suffer (defining deviancy down, immivasion, cultural Marxism, etc.)

It's all arising from the same cause. It will all reverse only when we see unequivocal signals that the ocean of Bond Wealth has begun to irreversibly evaporate back to the pre-mania puddle.

Blogger Salt January 12, 2016 12:16 PM  

@2 Google.

Anonymous Internet Guy January 12, 2016 12:18 PM  

@2 Jim Clay

Just copy the first phrase in the text and pray to the Google.

OpenID Jack Amok January 12, 2016 12:21 PM  

The exploding number of parasites trying to live off the shrinking number of people actually doing something productive makes it inevitable. You simply cannot have a thriving economy with less than two-thirds of your workforce working, and well over half of that doing nothing more than paper-pushing and retail. Throw in a massive influx of low-trust people into our society and it's that much worse.

Economics is complicated, but if you think about it as a village with people doing stuff, a lot of bullshit falls away. Ultimately economics is "the allocation of scarce resources that have alternate uses," and methods of allocating those resources that don't work for a society where everybody knows everybody else aren't going to be long-term stable. Our economy is too heavily politicized, and what's worse, politicized with distant and increasingly untrustworthy polities.

Anonymous Jim Clay January 12, 2016 12:22 PM  

@4 @6 Yes, I get that we can google the quotes. But it's an (admittedly minor) hassle. The economist side of me thinks that it's way more efficient to have one person do something once, then have two thousand people do that same one thing.

It also encourages getting the context of the quotes. I learned from reading more of the article that, true to his liberal world-view, Delong thinks he was wrong by not being liberal enough- i.e. we should open up the floodgates of monetary easing and have lots of debt relief and financial regulation.

Anyway, I appreciate Vox's works and am not trying to be a pest. Just expressing a wish.

Blogger Tank January 12, 2016 12:26 PM  

In related news, Fannie Mae has a new problem to "help" Hispanics:

1. 3% down
2. Bad credit OK
3. Include income of other household and non-household members to qualify, even though they are not liable in any way for the loan payments
4. Name of program: HomeReady

What could go wrong?

Blogger dc.sunsets January 12, 2016 12:26 PM  

Delong thinks he was wrong by not being liberal enough- i.e. we should open up the floodgates of monetary easing and have lots of debt relief and financial regulation.

Unbacked credit emission is like crack cocaine. Economists & analysts are like pushers and addicts. Whenever sobriety threatens, the answer is always "pass me the crack pipe."

OpenID genericviews January 12, 2016 12:27 PM  

It is much worse than last time. it is just better hidden. We don't have soup lines because we have SNAP/WIC/and food banks. We don't have tent cities because we have section 8 and AFDC. We have programs on top of programs that distribute money to the poor, the disable, and the unemployed to the point where they are richer than the middle class in most other countries.

During the 1929 Great depression, they didn't know they were in a depression either.

Blogger CarpeOro January 12, 2016 12:27 PM  

Suggested sidearms for the coming fun and games? I've got some precious metals, makes sense to be able to protect them with lead. Fiat money has been used to fuel this idiocy is going to finally hit tp value.

Anonymous Faceless January 12, 2016 12:28 PM  

@8

Why build authority for Huffpo?

Blogger VD January 12, 2016 12:31 PM  

Vox, how much influence does Prechter's work exert on your position?

None at all. I have great respect for Bob, and I think that he is generally correct, but to date, socionomics have proven to be a much blunter tool than he, or I, would like it to be.

Blogger dc.sunsets January 12, 2016 12:31 PM  

When people are maniacally optimistic, they trust their rulers, the "experts," the bank, their broker, Ahmad from Islamistan, Pedro from Meso America, Trayvon, and all the people promising them Future Dollars.

When this long spell finally breaks, all that trust will evaporate. If people collectively decide to distrust issuers of IOU-dollars, what is the debt worth (and what will interest rates do)?

We've waited and waited. It isn't here yet. But no tree grows to the sky. Eventually Chicken Little will be right, even if he's too old to care.

Blogger Student in Blue January 12, 2016 12:31 PM  

We're in a worldwide deflation? I haven't noticed it in the day-to-day. It certainly doesn't seem reflected in general goods prices.

Blogger VD January 12, 2016 12:32 PM  

Why build authority for Huffpo?

Nothing like that. I just forgot. If you're under any illusions that this is some sort of carefully considered, delicately arranged sort of blog, I'm afraid I must disabuse you.

Anonymous Viidad January 12, 2016 12:34 PM  

@17

That's why we love you, Vox.

Anonymous The OASF January 12, 2016 12:35 PM  

I felt that the book got bogged down with the economic theory for about the last 1/3 of the content... and it seemed to be much less than a comprehensive review of the solutions to the problems at the conclusion. But in all fairness, that probably wasn't the intent of the closing chapters anyhow.

Chapter 4 (No One Knows Anything), however, was a treasure and a gift to humanity - worthy in of itself of expansion into its own book. In fact, a guy could probably get a good idea of his own testosterone levels based on how badly he wanted to go for the pitchfork after reading that chapter.

Anonymous Faceless January 12, 2016 12:37 PM  

@17

Far from it. I know it's because it's not top of mind. However, I did have in mind the analysis that Drudge will link to all sorts of places, but simply not the Huffington Post.

Standard practice: Forgetfulness or haste
Once it's brought to your attention: Hey, if the great man himself won't link to it...why bother?

Anyway, WTF cares about whether you link or not. With the scrambled handles, I never know who's a regular, and we have actually had slow people before.

Blogger dc.sunsets January 12, 2016 12:38 PM  

socionomics have proven to be a much blunter tool than he, or I, would like it to be.

I think history has proved that Bob underestimated the ability of a complex system to flip heads 15 times in a row. That's exactly what I think has occurred; systems trend and enter brief cusps where the trend can reverse or continue (heads or tails.) We currently lack the mathematics to describe this; we await the invention of this new calculus.

This is the message I've learned from long-term stock speculators who play both sides. They excel at determining when the appearance of a trend change is real.

Blogger Jack Ward January 12, 2016 12:44 PM  

I hope you're wrong, but know, ultimately, that you're probably right about the chickens coming to roost.
I just finished book one of The Fall of America. Sobering stuff. Its full of small unit tactics and 4G adaptations in the field. Interesting to say the least. Definitely troubling in the author's conclusions. Much in the vein of Victoria. I may even get the other three books in the series.

Blogger Ben Cohen January 12, 2016 12:44 PM  

Vox have you ever read Martin Armstrong's work. If so, what do you think of his models?

Blogger Jack Ward January 12, 2016 12:46 PM  

@20 I just gave up the idea of scrambling my handle. The name is real and if someone[s] want to come after me I welcome the fun.

Blogger dc.sunsets January 12, 2016 12:47 PM  

We're in a worldwide deflation?

No. Not until the bond market begins to make major moves down (in total value.)

In the meantime, your paper dollar in your pocket buys twice as much gasoline as it did a couple years ago.

Blogger Nick S January 12, 2016 12:57 PM  

Will the Fed go NIRP? That quarter percent bump looked like a head fake to me.

Blogger White Knight Leo #0368 January 12, 2016 1:00 PM  

"While the measures that Stiglitz and Krugman were pushing were absolutely and utterly wrong"

Well there's the problem: people took Krugman's advice.

Anonymous DT January 12, 2016 1:04 PM  

Bernie Sanders is going to make everything free so it's all OK guys.

Blogger Nick S January 12, 2016 1:10 PM  

Remember, while I am certainly capable of being wrong, I am well-read, well-educated, and significantly more intelligent than the norm.

There you go trying to play off the fact that you have a Tardis. C'mon, we all know there aren't enough hours in a day to keep up with all the stuff you keep up with and don't give me that crap about the possibility of multiple Voxs.

Blogger Quizzer W January 12, 2016 1:10 PM  

I propose the name "The Silent Depression" because it has been completely hidden in all the economic make-believe statistics. Even if the political will was there to "restate" the stats, they raw data isn't there to do so.

That's okay. Economists of the future will need something to argue about, and the exact beginning and ending dates is relatively harmless. They won't be able to argue that Keynesian economics suck. Of course, that won't stop some from trying...

Anonymous Mr. Rational January 12, 2016 1:10 PM  

@25 Such a pity that it's impractical to stockpile petroleum; even the SPR is only good for a few months.

I write this as the snow blows and drifts outside.  I may or may not bother digging out before evening.

Blogger Student in Blue January 12, 2016 1:14 PM  

@25
In the meantime, your paper dollar in your pocket buys twice as much gasoline as it did a couple years ago.

While certainly true, I was chalking that up to A) ISIS selling oil on the black market, through Turkey, B) no one else wanting to halt productions in the middle east even though price is dropping, and C) increased US production of energy.

Just not necessarily deflation, since other price levels seem to be hovering in the same area, if not increasing (i.e. dollar menu from McD's).

Then again, only recently have those fast food chains been comfortable enough with prices to offer things like "4 for 4$" and "5 for 4$", whereas before $5 for a lunch was already an amazing deal.

Blogger Danby January 12, 2016 1:38 PM  

I was chalking that up to A) ISIS selling oil on the black market, through Turkey, B) no one else wanting to halt productions in the middle east even though price is dropping, and C) increased US production of energy.

don't forget D) Saudi trying to bankrupt US gas producers and Russia by exploiting their low costs of production. This extended period of low-cost oil is a long move by OPEC to destroy the producers of the higher-cost fracked and Arctic oil.

Blogger Student in Blue January 12, 2016 1:42 PM  

@Danby
This extended period of low-cost oil is a long move by OPEC to destroy the producers of the higher-cost fracked and Arctic oil.

Was there leaked evidence of this plan, or just one of those "it's a blindingly obvious conclusion"?

Anonymous March Madness January 12, 2016 1:44 PM  

Energy, oil in this case, is a proxy for economic production. Much like people looked at energy production in China. But you have to factor in other causes like the financial war being waged on the BRICs. Oil is one of the BRICs larger income streams and the neocons along with the Saudi's are trying to price them down out of the market, and out of meddling in Syria. Saudi's may also be playing a longer game against the neocons in that this also nukes the shale oil industry in US and Canada.

Bottom line, don't use oil prices as your main deflator/inflator indicator.

Blogger Praxis Archon January 12, 2016 1:45 PM  

VD - Do you have any thoughts on how the twin problems of the ZIRP economy (and the massive mis-allocation of capital) will intertwine with the 2015 Hegira? It seems like the conventional response from the opinion setters for lackluster growth is more neo-liberalism (aka free trade, free movement of peoples, diminished sovereignty). Do you think that the Western elite is now cognizant that the grand neoliberal scheme was a failure both as an economic and as a political project?

Mark Steyn posted the following in his column today:

Yet not enough of us are even aware of the problem. And almost everyone who matters in the western world - in politics, the media, law enforcement - has decided it's best to keep us unaware. After reading my book, the novelist Martin Amis asked Tony Blair whether its demographic thesis was part of the political conversation during his meetings with European leaders. Well, said Tone, it's part of "the subterranean conversation". And that's how they intend to keep it.

This somewhat suggests that the elite is aware of the monster they have created. Further reinforced by the fact that there have been numerous sales of "luxury bunkers" and from what I have read the financial elite all have exit options vis a vis Europe should it go south.

From a personal preparation perspective is there anyway to preserve any existing wealth from the current system from being destroyed in the coming conflagration?

Thanks.

Anonymous ArmyStu January 12, 2016 1:46 PM  

The job growth and economic growth we have seen in the U.S. after the banks but us in recession is the kind of "depression" I can get behind.

You can say you were right. But saying so doesn't make it so.

Anonymous joe doakes January 12, 2016 1:47 PM  

4G war means self-reliant means firearms, including stand-off weapons, not just pistols. So Vox, do your sources have a recommendation on AR-15 variant versus AK variant? Ease of operation and maintenance versus availability of parts and ammunition in post-collapse middle America? Also, gold has always been, well, the gold standard. But how do I get change back from my ingot? Recommended alternatives? Silver coins? Unset gemstones?

Blogger justaguy January 12, 2016 1:47 PM  

#29: So VD is a Time Lord? Does this mean he gets a new name?

Blogger swiftfoxmark2 January 12, 2016 1:48 PM  

@19

I agree. Chapter 4 was one of the most enlightening chapters on economics I have ever read. It really should be taught in all basic economics classes.

Unfortunately, most economists have a sense of pride about them.

Anonymous March Madness January 12, 2016 1:48 PM  

I agree with D.C Sunset that when you see real credit/debt destruction going through the bond market then you know the deflationary tsunami has reached the shoreline.

Blogger Danby January 12, 2016 1:54 PM  

@34
It's the conventional wisdom, backed by OPEC actions;
"Don't expect oil prices -- and therefore U.S. production -- to go up any time soon.

Saudi Arabia, especially, but also Iran, as the dominant players in the group, are intent upon putting pressure on those areas of the world that they feel threaten their control of world energy markets.

They are especially concerned about the United States and the shale operations that have picked up in recent years. Since it generally costs more to produce oil and gas in the United States than it does in the Middle East, the effort is to challenge the new producers in the U.S and in so doing to maintain market share for OPEC, but particularly Saudi Arabia."

Blogger BassmanCO January 12, 2016 1:54 PM  

This comment has been removed by the author.

Blogger BassmanCO January 12, 2016 1:54 PM  

@37

ArmyStu,

The train is fine.

Blogger Cataline Sergius January 12, 2016 1:56 PM  

My concern now is that the big one won't kick off fast enough.

I'm not as young as I used to be. The idea of waiting around for another fifteen years for Go Live in the Next American Civil War has limited appeal.

On top of that, there are people who are likely to die of old age before then who...

Well...

Blogger dc.sunsets January 12, 2016 2:02 PM  

Every pundit, analyst and "reporter" engages in the time-honored tradition of explaining infinitely complex systems to us wogs.

Here's the progression:
X happens.
Pundits & Experts look around for a coincident event and/or plausible-sounding theory (CE/PST)and tell us "WHY THIS HAPPENED."

The next day, week or year X happens again and we are given a different CE/PST. Or we have the same CE as prior, but instead of X happening, 1/X happens.

Then we get an entirely different CE/PST to blame. This week stocks rose due to declining oil. Next week stocks went down due to declining oil, or they went up due to rising oil, or....whatever.

This causes me to see, in my mind's eye, all of these clowns "telling me why X happened" wearing grass skirts, beating drums made of human skin, their faces painted and sharp bones pushed through their nasal septa. We humans haven't changed at all. Still a bunch of superstitious savages.

Not ONE person who claims such knowledge possesses it. They are all con artists.

Blogger Danby January 12, 2016 2:04 PM  

@38 Joe doakes
...have a recommendation on AR-15 variant versus AK variant? Ease of operation and maintenance versus availability of parts and ammunition in post-collapse middle America?
I've never been a fan of AR-pattern rifles. For my money, you're much better off with an M-1 Garand or even an M-1 Carbine, as long as you're not doing a 50-mile march through swamps and forest. Like AKs, AR-15s are cheap, reliable, and relatively ineffective. Unlike AKs, the are also accurate.

Also, gold has always been, well, the gold standard. But how do I get change back from my ingot? Recommended alternatives? Silver coins? Unset gemstones?

Mexican pesos and junk silver for day-to-day transactions, bread and milk. Silver rounds for larger transactions with more savvy players, guns and cars. Kruggerands and American Eagles for bribing the border guards and buying property. Gemstones for sewing into your clothes so the guard at the death camp can have a nice present for his wife.

Anonymous Mr. Rational January 12, 2016 2:10 PM  

@33 Exactly.

@34 KSA has declared that it is seeking to hold market share; in other words, force the glut of high-cost oil from places like the Bakken back off the market.  This is working.  Lots of US shale drillers are headed for bankruptcy.  I recall a recent article regarding an Alberta oil-sands operator in financial trouble.

KSA has an average IQ of crap, but it's not a democracy and the people in charge are no dummies.  They see things like Elon Musk taking on the high-end car market, Chevy going head to head in the mass market with the Bolt, and the move of heavy trucks to natural gas that was in progress until the bottom fell out of the market.  They know that they're going to lose customers in droves as soon as prices go up again.  They intend to be the last man standing and get every red cent they can out of Ghawar before they have to cut and run ahead of a mob of caliphists.

Blogger Markku January 12, 2016 2:18 PM  

We're in a worldwide deflation? I haven't noticed it in the day-to-day. It certainly doesn't seem reflected in general goods prices.

The post clearly assumes that you are familiar with the previous discussions. So, even if it just lazily says "deflation", it really means "debt deflation", as that was Vox claim.

Blogger VD January 12, 2016 2:19 PM  

Do you think that the Western elite is now cognizant that the grand neoliberal scheme was a failure both as an economic and as a political project?

Certainly. The thing about politicians is that all they ever care about is a) getting re-elected, and b) kicking the can until they are out of office and collecting their massive pensions.

So now they just want to stave off the crisis until they are out of office and have a place on an island somewhere. They won't try to solve it or do anything that might risk bringing it about sooner, even if their attempts to keep a lid on it make it worse in the long run.

These are not people who think about the long run.

Blogger Rye Bread January 12, 2016 2:22 PM  

#38

AR15 - Not because its a better platform, but its available. Ammo, and spare parts will be what your opposition is using.

Blogger SciVo January 12, 2016 2:24 PM  

While the measures that Stiglitz and Krugman were pushing were absolutely and utterly wrong - the "extraordinary, sustained and aggressive policies to rebalance the economy" would have only made things worse, as what was needed was a huge round of bankruptcies to clear the zombie debt - they were right to observe that the Neo-Keynesian measures utilized were doomed to be ineffective.

Why is this so hard for even the "experts" to understand? They only had to look at Japan's example, which had been well-studied by that point. Huge debt overhang from a real estate market bubble popping, zombie banks refusing to recognize the loss of value of their assets and just pretending to not be insolvent, acting as an infinite black hole sucking up all attempts at stimulus.

It was all right there. A perfect model, that even a mere hobbyist like me was already aware of before it happened here. And when they declared our zombie banks "too big to fail" and shrugged and let them stand, the result was obvious and inescapable.

So if we could see it so easily, why couldn't the professionals?

Blogger Student in Blue January 12, 2016 2:26 PM  

@Markku
The post clearly assumes that you are familiar with the previous discussions. So, even if it just lazily says "deflation", it really means "debt deflation", as that was Vox claim.

Ah, my mistake. Thanks, Markku.

Blogger Markku January 12, 2016 2:31 PM  

Things were more straightforward when there were only two kinds of currencies: commodity-based, and complete fiat. Only with the complete fiat currency do prices respond in an absolutely predictable way to the size of the money supply.

But debt-based currencies like the US dollar are a more complex case. On one hand, the Federal Reserve and the government would like to inflate, and to a degree they are successful. However, at the same time, the debt "supply" decreases by means out of their control. So, deflation leads to a result where prices stay roughly the same, but money becomes immensely more difficult to come by.

Blogger Student in Blue January 12, 2016 2:33 PM  

@Danby, Mr. Rational

Thank you for the backstory and links. I'll educate myself immediately.

Anonymous Hang the Bankers January 12, 2016 2:35 PM  

So if we could see it so easily, why couldn't the professionals?

Because they could, they can, and they are doing all this with intentional deliberation for ulterior motives that go beyond mere economics.

Blogger pyrrhus January 12, 2016 2:35 PM  

We cannot solve our problems with the same thinking we used when we created them.

Albert Einstein


Blogger pyrrhus January 12, 2016 2:40 PM  

@17 Chinese producer prices are spiraling down rapidly, so real deflation is already hitting worldwide....unless you count things like college tuition and other government rigged markets

Anonymous Stilicho January 12, 2016 2:46 PM  

@55 well said Markuu

Blogger dc.sunsets January 12, 2016 2:46 PM  

AR. If you bother with a rifle, a scope is necessary. Flat-top AR's scope nicely, AK's don't. Get one with 1-7 or 1-8 twist so you can use 77gr and 75 gr bullets (far superior terminal performance, $1+/shot), 5.56 NATO or Wylde chamber, preferably with QPQ/Melonite or nitrided barrel (better than chrome lining, it's the new gold standard.) All sorts of places are making these, they're all good. It's just a jigsaw puzzle.

This probably is okay for sporting, occasional problem use. If arming up for the 2nd Am. Rev., you probably need one of the newer (much more expensive) platforms: SCAR, HK416, maybe Tavor, etc. Not my cup of tea.

Blogger Snidely Whiplash January 12, 2016 2:49 PM  

So if we could see it so easily, why couldn't the professionals?

When you very high income level depends on you not seeing something, it becomes very easy not to see it.

Blogger dc.sunsets January 12, 2016 2:55 PM  

Like AKs, AR-15s are cheap, reliable, and relatively ineffective.
FMJ ammo. It's not any better with M80 30 cal out of an M14.

Dr. Martin Fackler treated plenty of actual battle casualties in his career. His discussion of the "lethality" of AR/AK or even M1 guns shooting FMJ bullets is quite illuminating.

This is why there's so much attention paid to the 77 gr OTM bullets for 5.56 and why the Army Marksmanship Unit people developed the 6.8 SPC cartridge for the AR. With Hornady 110 gr BTHP loads you can't tell the difference between 6.8 SPC out of a 16" barrel and 7.62 NATO (308 Win) 155 gr VMAX out of a 20" barrel in gelatin tests.

One other major benefit of the AR: Giessele Triggers, specifically the SSA-E. This is why the AR is the middle-class white guy's Barbie Doll; endless accessories to play with.

Blogger Snidely Whiplash January 12, 2016 3:08 PM  

I can see where dressing up your gun could be fun, but when it comes down to it, what counts is ft/lbs delivered accurately on target.

For pure stopping power, it's hard to beat .30-06 or .303BR. Or even 7.62x54R or 8mm, for that matter. The problem with those rounds is not the rounds, it's the size of the magazine on the guns that use them. If solo against multiple attackers, 5 or even 10 rounds is really inconvenient.
So, yeah, I like my Lee-Enfield, and my Mauser. Ar-10? Eh, not so much.
I haven't tried an AR-10 yet, but among "modern sporting rifles", that sounds much more like my style.

Anonymous WillBest January 12, 2016 3:08 PM  

This extended period of low-cost oil is a long move by OPEC to destroy the producers of the higher-cost fracked and Arctic oil.

This seems counterproductive. Its not as if the capital equipment is going to vanish. The investors will lose their shirts, and somebody else will pick it all up with a lower cost basis.

Blogger Snidely Whiplash January 12, 2016 3:08 PM  

AR-15, not so much. Like I said, I haven't tried an AR-10 yet.

Blogger Snidely Whiplash January 12, 2016 3:16 PM  

@64 Will Best
It would be a stupid move if you expected to remain in the market beyond 5 years. When you're looting, however, long-term thinking is not really the agenda.

Blogger Marsh 01701 January 12, 2016 3:19 PM  

@26. Dollars may buy more gas, but it's buying less food.

Anonymous Samson January 12, 2016 3:29 PM  

Do you think that the Western elite is now cognizant that the grand neoliberal scheme was a failure both as an economic and as a political project?

I remember attending a conference a couple of years ago with a Christian colleague of mine who is older and better-networked than I, and has acquaintances in high places (within our country, at least). He made a remark that has stuck with me, to the effect that elites are beginning to clue in that anti-Christianism has been a disaster. It's just that so far, they want a return to some form of workable society without the actual Christianity.

Of course I have no idea if this is true, but nevertheless it gave me an odd sense of hope that at that time I had been lacking.

Anonymous Sixty Nine January 12, 2016 3:57 PM  

"The Fed can't print more borrowers." - VD

Blogger kennymac January 12, 2016 4:04 PM  

Joe D, do yourself a favor, don't listen to these idiots and get an AR.

Anonymous KoranBurningFaggot January 12, 2016 4:21 PM  

This seems counterproductive. Its not as if the capital equipment is going to vanish.

Even without non Asian minorities around equipment that is not maintained might not work.

I can see where dressing up your gun could be fun

Put a dress on your gun and it can self identify as pre ban weapon.


OT: British kids to be taught niggers settled in the UK before the English.

http://www.dailymail.co.uk/news/article-3392088/GCSE-pupils-taught-nation-s-earliest-inhabitants-Africans-Britain-English.html

"GCSE students are to be taught that some of our nation’s earliest inhabitants were Africans who arrived here long before the English.

The Mail on Sunday has discovered that the extraordinary rewriting of our island’s history – the politically correct work of a Marxist academic – will be offered to thousands of history students throughout England from September.

Its creators claim the course addresses the ‘white male-dominated’ view of history – but it has outraged some of Britain’s most eminent thinkers.

Booker and Nobel prize-winning novelist V.S. Naipaul said: ‘Once again political correctness is distorting our history and the education of our children.’

And historian Sir Roy Strong, author of The Story Of Britain, said: ‘This stands history on its head, projecting back on to the past something that isn’t true.’


Anonymous Mr. Rational January 12, 2016 4:32 PM  

@67 10% of gasoline IS food, aka ethanol from what would otherwise be for human or animal consumption.  Remember the Arab spring, ginned up by high food prices in the Maghreb?  That originated in Washington, with the Renewable Fuel Standard.  An SUV-full of E85 consumes enough corn to feed one person for a year.

Anonymous Leonidas January 12, 2016 5:07 PM  

@72: Speaking of which, I went in to the local big-box grocery store chain a couple of weeks ago looking to buy some fresh corn on the cob for my son's birthday (by request). Now, I wasn't expecting to have a great selection of it - it's off season here, after all. But this is the 21st century, so I assumed they'd have some trucked in from somewhere else like they usually do.

Couldn't find any. So I went to talk to someone, and ask if I was just missing it (it's a big grocery store, it happens sometimes). Nope. Turns out they didn't have any at all. And neither did any of the other eight or nine stores in town of the same chain.

Because there's an f-ing corn shortage.

Nevermind that the 2015 corn crop was the third highest on record - we have a shortage. Because we're burning it all up in our cars, by government mandate. Absolute insanity.

Anonymous grey enlightenment January 12, 2016 5:17 PM  

These are liberals who want to enlarge the already bloated welfare state. The left wants more regulation, which hurts job creation and then they complain the economy isn't adding enough jobs.

Blogger Nick S January 12, 2016 5:43 PM  

So VD is a Time Lord?

Rumor has it.


Does this mean he gets a new name?

He has many names yet shall remain nameless in certain circles.

Anonymous Discard January 12, 2016 5:57 PM  

38. joe doakes: Get something in 7.62x39 and 5.56, plus whatever else pleases you. You can't choose wrong if you choose both. And if you're not a hunter or marksman to begin with, a 200 yard weapon is good enough.

Blogger Were-Puppy January 12, 2016 6:01 PM  

@46 Cataline Sergius
My concern now is that the big one won't kick off fast enough.

I'm not as young as I used to be. The idea of waiting around for another fifteen years for Go Live in the Next American Civil War has limited appeal.

---

It's hard to win one for the Gipper when you've become the Gipper :P

Blogger Markku January 12, 2016 6:04 PM  

I used to wonder, how DO you get an absolute fiat currency the starting momentum? How do you get people to believe that it has value before people see others successfully buing stuff with it?

The answer turned out to be amusingly simple. As the monarch, demand taxes in that new currency, throw them in jail if they won't pay.

Blogger weka January 12, 2016 6:07 PM  

Vox, are you sure you and SpaceBunny have not been having coffee with Alte from the late lamented TradChristianity? Her comment is when there is an excess of unwanted men, there will be war.

Blogger SciVo January 12, 2016 6:09 PM  

@ Snidely Whiplash:

Oh right, Upton Sinclair.

Re: oil, so this is a tell that their reserves are running low?

Blogger Snidely Whiplash January 12, 2016 6:24 PM  

@80,
Or, more likely, their time.

Anonymous #8601 Jean Valjean January 12, 2016 6:50 PM  

@78 Markku

You must have been reading about Modern Monetary Theory (MMT) which promotes the idea that taxes drive the value of money.

MMT gets a lot right and I particularly like their focus on accounting. However, they also get some things wrong. For example, it takes more than taxes to give money value. It also takes a productive nation. If a nation produces nothing, no amount of taxes will help. See Zimbabwe.

Blogger Cataline Sergius January 12, 2016 6:50 PM  

@77

(*sigh*)...yeah...

Blogger weka January 12, 2016 6:55 PM  

Wrong question. What could go right?

Home ownership is a proxy for credit worthiness which I'd a proxy for fresh and sober living. Frugal and sober living is hood for the individual and society.

The federal elite measures the proxy and cannot think of its meaning....

Blogger weka January 12, 2016 6:57 PM  

Look at commodity prices. They ate tanking. The currency is being debased to disguise this in the high Street

Blogger weka January 12, 2016 7:04 PM  

Look at commodity prices. They ate tanking. The currency is being debased to disguise this in the high Street

Blogger weka January 12, 2016 7:07 PM  

Wrong question. What could go right?

Home ownership is a proxy for credit worthiness which I'd a proxy for fresh and sober living. Frugal and sober living is hood for the individual and society.

The federal elite measures the proxy and cannot think of its meaning....

Anonymous Mr. Rational January 12, 2016 7:35 PM  

@73 And the farmers love it, because it lets them sell everything they can grow.

Privatized profits, costs socialized not just in the USA but around the world.

Blogger Anthony January 12, 2016 7:37 PM  

@64 - This seems counterproductive. Its not as if the capital equipment is going to vanish. The investors will lose their shirts, and somebody else will pick it all up with a lower cost basis.

That's already happened, probably a few times for the more expensive wells. There are a few problems with that scenario: first, there are significant operating costs to extracting fracked shale oil, even if you get the mineral rights and equipment for free. Second, the equipment deteriorates if it's not used for long enough. Third, the workers leave for other jobs if the work stops for long enough, and some of them just won't come back. So keeping the price of oil below what the frackers can compete with for long enough makes it harder for the frackers to jump back in when the price goes back up.

However, it appears that the frackers are more resilient than the Saudis counted on, or that the Saudis are trying to break someone else for political reasons. Or both. Because even when oil dipped below $40/bbl, it didn't shut down all the frackers, and most of them bounced right back once the price rose again.

Blogger dc.sunsets January 12, 2016 7:57 PM  

@ snidely, I'm not a first hand expert, but the info published on DoD letterhead presumably comes from those who are.

According to them, ft-lbs on target don't matter, permanent tissue damage does. 2000 ft-lbs of 30 cal that cuts a 0.3" neat hole through non-critical tissue is not disabling. Only if the bullet upsets and destruction spreads out from the wound track does "more energy" matter, and even then it's not the energy, it's damage directly caused by bullet fragments actually hitting stuff that matters.

A 62gr 5.56mm bonded bullet load by Federal is more trustworthy than 30 cal 147gr FMJ out of an M1A, AR10 or a 30-06. (Unless you're trying to penetrate a concrete wall.)

See links here for more science of wound ballistics
http://68forums.com/forums/showthread.php?42025-Wound-ballistics

Blogger James Dixon January 12, 2016 8:19 PM  

> Yes, I get that we can google the quotes. But it's an (admittedly minor) hassle.

Seriously? How hard is highlight, right click, Search Google? Well, maybe if you're using IE.

>> While certainly true, I was chalking that up to A) ISIS selling oil on the black market, through Turkey, B) no one else wanting to halt productions in the middle east even though price is dropping, and C) increased US production of energy.

> don't forget D) Saudi trying to bankrupt US gas producers and Russia by exploiting their low costs of production.

You left out E) the economic recession in China.

> You can say you were right. But saying so doesn't make it so.

No, but being right does. All those supposed jobs? Yeah, right.

Blogger Rusty Fife January 12, 2016 9:07 PM  

@37. Praxis Archon

From a personal preparation perspective is there anyway to preserve any existing wealth from the current system from being destroyed in the coming conflagration?

@39. joe doakes

So Vox, do your sources have a recommendation on AR-15 variant versus AK variant?

Both you guys need to forget about saving your shit and worry about saving your lives. Getting in a firefight over your gold isn't the way to do it.

Guns make too much noise and show where you are. It is much better to leave. Don't worry, the orcs won't stay and they can't carry much

1. Get Poole's book "The Tiger's Way".
2. Look at the way the German's and VC set up a squad type defensive position. It is easy to do even in a suburban neighborhood; make sure you have a way to squirt out.
3. Meet your neighbors over a few beers.
4. Have 30days worth of food available
5. Have somewhere else to run before the riots start.

Anonymous Mr. Rational January 12, 2016 9:16 PM  

@89 it appears that the frackers are more resilient than the Saudis counted on

Banks have been slow to mark loan values to market or cut credit lines, because of the damage it will do to their books.  Now where have we seen this before?

Here's a couple articles on the current situation:
http://www.rigzone.com/news/oil_gas/a/142406/Baker_Hughes_US_Oil_Rig_Count_Lowest_Since_2010_As_Drillers_Step_Up_Cuts
http://www.wsj.com/articles/oil-plunge-sparks-bankruptcy-concerns-1452560335

@92 Got any links about defensive positions?  I'm out in the countryside way beyond where riots will reach, but looters are always a threat.  My best defensive weapon may be a chainsaw; I can drop trees across the main roads in, leaving only little 2-tracks through farms.

Blogger BC January 12, 2016 9:23 PM  

OT: @dc.sunsets and others. I'm just starting to build an AR15. Any recommendations on an upper/lower receiver set. I want to use one with very high quality and robust (ie not super lightweight). Looking at F1 Firearms and Mega.

Blogger Groot January 12, 2016 9:24 PM  

@68. Samson:
"elites are beginning to clue in that anti-Christianism has been a disaster."

According to Charles Murray in Coming Apart: The State of White America, 1960-2010 (a book I highly recommend, as I do just about anything written by the man), there is a strong direct (i.e., positive) correlation between being rich, being educated, remaining married, and being religious. He exhorts the elites to "preach what they practice." The closer you are to the bottom, the more likely you are to be an atheist.

Blogger Rusty Fife January 12, 2016 9:25 PM  

@93. Mr. Rational

Links? http://www.amazon.com/Tigers-Way-Privates-Chance-Survival/dp/0963869566

Basically, Asian armies (including the Germans) spend most of their time hiding the positions; not fortifying them. Plus there is always a back door out. The stuff on VC and Japanese was the most applicable methinks.

Blogger Rusty Fife January 12, 2016 9:34 PM  

@93 Mr. Rational

The book has a whole bunch of information on 'military crest' where to place claymores, automatic (semi-auto) weapons, and squad communications procedures that are impossible to find elsewhere. You won't regret it.

Blogger Joshua Sinistar January 12, 2016 10:01 PM  

Oil prices are going down because The Saudis are trying to wipe out the frackers and hurt Russia and Iran who are both dependent on Oil revenue. Saudi Arabia is PISSED about the Iran Deal. They've already started retaliated by going after Shia clerics. Iran is sending terrorist cells to try to destabilize the House of Saud. Interestingly The United States is doing nothing really big even though Iran and Saudi Arabia have started fighting. The Economy is now dead. Expect a whole new wave of retail chain closures soon. More discounters are coming in. Deflationary pressures on prices have started already after another Bad Christmas. This nigger is killing them. I expect Obamacare going up again is gonna squeeze the life out of more retail outlets and some coffee shops and restaurants are probably gonna fold because there are HUGE INCREASES in premiums again. This nigger is a Real Albatross. He blew it up. The Federal Reserve either raises interest rates, or you're gonna see huge drops in prices that crush commodity investors and kill the profits for guys who are big commodity brokers. No way these big wheels are gonna want to take this haircut, so they're gonna squeeze Yellen to raise rates.

Anonymous farmer Tom January 12, 2016 10:03 PM  

The comments about food and fuel are hilarious.

Maybe you all ought to actually know what you are talking about before you comment.

Blogger 罗臻 January 12, 2016 10:14 PM  

Someone who's been writing good stuff on deflation is Snider from Alhambra. Latest here: Rough Contours of Bond Cycle Implications

China has been a slow motion train wreck since 2011. The deflation model is playing out as expected (the stock market bubble was a margin-debt driven surprise, yet the collapse totally textbook too). The currency runs have begun as the Chinese public begins to withdraw dollars from the financial system.

Anonymous map January 12, 2016 10:15 PM  

I don't think that natural resource prices really indicate what is going on. Oil and mining are highly cyclical businesses. This is due to the nature of these industries. They are very capital and time intensive. Resources cost a lot of time and money to extract.

So when supply and demand imbalances occur, the resource sector isn't able to react as quickly as other markets. This long lag time creates huge price swings... extreme highs and extreme lows you don't see in most other markets.

When demand exceeds supply in most markets, you see a relatively quick reaction from producers to meet the new demand. Compare this to resources like copper or gold. Before you can produce it, you have to go find it and build a mine. The exploration cycle – the pre-development cycle – can take up to 10 years. In the meantime, prices can soar, while the market waits for that increased supply.

On the other side, after supplies come onto the market, prices peak and start to fall. What happens is that the industry comes to regard their sunk costs as just that... sunk costs. So they're hesitant to slow production, in spite of high supplies and falling prices. They'll continue to produce even when prices fall below the level at which they would be profitable. In fact, they'll often produce even below the marginal cost of production for a while in a contest known in the resource industry as "the last man standing."

The reasoning here is that it might cost them more to shut down a project and restart it than it would to continue operating at a loss. And each producer wants to be the first in the game when the cycle turns back around. This drives prices even lower than they otherwise would go.

So you have this extraordinary cyclicality as a consequence of the capital and time intensive nature of the business.


Anonymous map January 12, 2016 10:26 PM  

I think the US government has now allowed oil exports from the United States.

Blogger The Other Robot January 12, 2016 11:00 PM  

Mish says Recessionary decline in rail traffic

Anonymous WillBest January 12, 2016 11:24 PM  

Because there's an f-ing corn shortage.

Nevermind that the 2015 corn crop was the third highest on record - we have a shortage.


Nonsense. Corn is selling at $3.50 a bushel which is about a five year low. There is no shortage. Now 2012 where it was over $7 and they were rioting in Mexico... that was a shortage.

Anonymous kjj January 12, 2016 11:56 PM  

@39

Your first AR should be custom assembled, at home, by you. Bonus points for DIYing an 80% lower, but commercial/FFL is fine. Use cheap and/or surplus parts.

Home assembly is an education that you can't get any other way. Tinkering with it until it runs like a Swiss watch is another. And these will be very useful skills in most SHTF scenarios.

After that, you have options. You can keep your rifle (it runs great now, remember?), or you can swap parts if you want to make focused improvements, or you can find a different upper assembly, or buy a complete second rifle.

I recommend a M4-style (flat top with rail) for your first build. Put a red dot on it.

Folding iron sights tend to be either expensive or useless. If cash is tight, skip them for now. Obviously, without backup sights, you'll have a hard time hitting the ground if your electronic sight fails for some reason (and they do). As a compromise, get some cheap fixed (non-folding) sights to store. If SHTF ahead of schedule, you can install them.

A cheap and dirty A2 for your second build might be a good idea for some people. Cheap fixed triangular stock, cheap non-rail handguard, carry handle, fixed front sight. Basically the gun that you always see in Vietnam movies.

Eventually you'll get to your serious keeper rifle. This might be your first with some changes, or it might be brand new. Most of the gun posts on this site are advice on getting this gun. Those posts have better advice than anything I could say. My only disagreement is that I don't think that everyone should necessarily skip immediately to this rifle. Obviously, if your need is urgent, get the serious rifle first.

Anonymous kjj January 13, 2016 12:23 AM  

@84

This is the eternal woe of economics, finance and management.

That which can be measured can be managed. That which is managed is gamed. Once a measure is gamed, it no longer measures what it measured before.

Virtually everything that annoys you about calling a call center is the result of some metric that management used, for a while, to monitor things.

In finance, any indicator that reliably produces alpha becomes an indicator of beta (by definition) once the knowledge gets out. In the markets, this is the result of an invisible hand.

In government, it is the result of deliberate action. Home ownership as a proxy for the country's economic health evaporates the instant that someone realizes that it is cheaper to game the proxy than to improve the proxied. Ditto the "people seeking and receiving payments for unemployment insurance" number, usually given the intentionally misleading title "Unemployment rate". Which do you think is more expensive to game, GNP or GDP?

Anonymous kjj January 13, 2016 12:36 AM  

@103

It might be worse than the numbers suggest. With no pipeline, the North Dakota oil is moving by rail. Long trains, lots of them. Every day.

On the other hand, in 2008-9, every siding and stub around here was packed full of idle cars (dry bulk, box and cattle). They haven't come back yet.

Blogger weka January 13, 2016 1:00 AM  

@99. I live in dairy country. I monitor (well, I follow a blog that monitors) the Global Dairy Price, because if that falls, I get busy with bankrupt farmers getting drunk, depressed and scaring the cows and their families.

The price is tanking. This stuff I do know better than US farmers because NZ has ZERO subsidies in agriculture.

Anonymous map January 13, 2016 1:03 AM  

When choosing weapons for the zombie apocalypse, you should focus on only two factors: common calibers and common magazines.

You want to buy guns whose ammunition and magazines are everywhere.

For handgun, that is 9mm with Glock magazines.

For rifle, that is 5.56mm with AR15 magazines.

That means inexpensive Glocks in 9mm, either gen3 or gen4 and and inexpensive AR15.

Building either one of these is highly recommended.

Blogger Quintus Maximus January 13, 2016 1:07 AM  

Vox, thoughts on the Baltic dry index? It appears to have fallen through the basement of the floor.

https://twitter.com/quintusmaxum/status/687121206009450498

http://www.zerohedge.com/news/2016-01-11/nothing-moving-baltic-dry-crashes-insiders-warn-commerce-has-come-halt

Anonymous Halifax Donair January 13, 2016 1:29 AM  

@98 I bought a computer for my Dad today at a Staples. By the amount of stock, the few employees working, and their attitude, it looks like they're closing soon. Recently I was in a mall and over 3/4 of the stores were either for lease or turned into office space.

Blogger SciVo January 13, 2016 2:17 AM  

Not Vox, but low BDI is both trailing and lead. Bad past production, cheap energy future.

Blogger JohnG January 13, 2016 5:31 AM  

@39 Depends on how tacticool you want to be. An AR is fine, but you can find a good AK for around $600 - you're not going to get a good $600 AR. The 7.62x39 (AK) round is going to have more energy (about double) at 500 yards than the 5.56/.223 (AR), though both of those are mainly 300 meter guns. AK ammo is cheaper. People bitch about AK accuracy but it'll hit a man center mass at 300 meters just fine, and there's good non-Russian ammo out there. The AKs have world renowned reliability even when filthy, the AR not so much. Upgrades for either platform are plentiful, there's plenty of things out there to put on an AK to mount an optic. You can in theory carry more ammo with the AR for the weight, but with FMJ ammo (in the .223, which is essentially a varmint caliber) if you've got to shoot something more than once to make it stay down, then the ammo advantage just went away. A great AR (H&K, POF, Wilson) is going to cost more than $2000, tho there's some nice stuff around $1500 (Sigs, etc) - check Gunbroker for latest prices. An good AK starts $600 before upgrades, a really nice one runs about $1000, and your custom shops can make a phenomenal AK for less money than a custom AR. There's other considerations of course, recoil is stouter in an AK but by no means unmanageable - a good muzzle break fixes a lot of the muzzle jump.

Blogger dc.sunsets January 13, 2016 8:35 AM  

@BC there's no one answer. Assembling an AR is usually simple and most "makers" get their parts from the same few sources. There aren't many barrel makers, for instance. I've not owned anything from F1 or Mega; the latter has a very good reputation, of course. Unless you go with a non-standard lower (e.g., LWMT) they're all basically the same as long as they're 7075 alloy.

Like I wrote, my preference is for
1. 1 in 7 or 1 in 8 twist
2. Midlength gas system 16" bbl
3. Wylde or 5.56 NATO chamber
4. Nitrcarburized barrel
5. Flat top upper
6. Wilson combat scope mount
7. Giessele SSA-E trigger
8. Norgon ambi-catch
9. Magpul MOE-K2 grip

I'm not a fan of M4 pattern barrels on carbine gas systems. Too much gas back in my face.

My view is that of a hobbyist. I don't approach this like I plan to fight a war. I'm not a .mil ex-SF type, just a guy who enjoys tools that work well in the venues he actually expects to encounter. I was a very early adopter of the 6.8, for example.

Blogger BC January 13, 2016 1:45 PM  

@dc.sunsets
In particular, thanks for the advice and generally for the insightful commentary.

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