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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: jvbigo who wrote (371246)	7/14/2008 6:30:55 AM
From: stan_hughes	Read Replies (1) \| Respond to of 436258

Thanks for bringing that up. My mother-in-law is now 83 -- she's from Liverpool and was trained and worked as a radar operator during WW2. She lived through the blitz and everything that went with it, the whole shebang -- how's that for a way to gain your perspective on what is and isn't important in this life We talk about the state of the world comparatively often, and there's nothing like hearing the way things really were from somebody who lived through an event or an era versus reading about it. She's still as sharp as a tack mentally and understands general macroeconomics, and she can see the financial system devolving here as well as I can Being born in 1925, she doesn't have much first hand experience about the 1930s depression per se except in the context of what it was like being a child in that environment, but she remembers her parent's behavior, especially the prevailing mindset of the need for self-preservation and the code of not wasting anything. Needless to say, that mindset got lost somewhere along the way over the past 70 years or so, but I agree with Heinz on this topic -- it's in the early stages of making a big comeback As the western populace shifts back on a social level from its excessive consumption ways to a more conservative way of life where existing resources must be relied upon (because new wealth isn't being generated and can no longer be conjured up through access to credit), there will be broad-based realization of the need to protect what one already has before the remainder is completely squandered. Once attuned to this new notion of "that's all there is, there is no more", people will become absolutely phobic about any further deterioration in the value in their remaining assets, leading them (among other things) away from all forms of speculation, which obviously would include these freshly frightened boomers exiting the stock market in a massive recognition phase That will pave the way for the credit revulsion stage of the current chain of events, when things are going to get uglier than most people alive today can currently fathom. Not many can conceive of a world not dominated by credit -- imagine for example what general price levels would be if everyone had to pay cash (or electronic cash at least) for a car or a house -- how very 19th-century quaint would that be One other point probably needs to be made here as well -- the Fed can do a lot of interesting things, but it can't direct and steer the country away from the social and attitude changes I've described, because those changes are a response to decades of over-consumption, the limits of which have finally become reached in our time. The credit party is over for the US for the next decade or two at least, and everybody had better get used to it and act accordingly .