The economic condition of the country continues to decline toward its rendezvous with an, as yet, unknowable catastrophe. Here is… a look (not a prediction) at a series of not improbable events that could develop [and which] would change our economic world overnight. Words: 1550
So says Monty Pelerin (pseudonym) at www.EconomicNoise.com in an article* reformatted and edited […] below by Lorimer Wilson, editor of www.munKNEE.com, for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article reposting to avoid copyright infringement. Pelerin goes on to say:
A Possible Economic Apocalypse Outlook For 2012
The country has officially been in economic recession since the end of 2010. Many believe that it never recovered from what began in 2008. The word depression is now commonplace. Trust in Congress has fallen to single digits. Similarly, government reports and statistics are increasingly mocked by the public. The media is likened to Pravda because only government-speak is allowed. Distrust, despair and fear are everywhere.
- Official unemployment numbers approach 14%. Unofficial estimates of unemployment range from 30 -35%. There are no signs of a turnaround in employment.
- The Dow-Jones average hovers around 4,500.
- Official GDP has been declining for four consecutive quarters. Independent analysts estimate the true numbers have been declining for two years.
- Tax collections continue to drop while Federal spending accelerates. The deficit is expected to exceed $3 Trillion. Federal debt now exceeds $16 Trillion.
- The rate of foreclosures has doubled from the previous high in 2011. Personal and corporate bankruptcies have reached levels thought impossible.
- Major companies have left or announced intentions of leaving the U.S. to avoid the confiscatory taxes and regulations. College students, unable to find jobs, are emigrating to more favorable economies.
- California, Illinois and several other states are in bankruptcy court as are thousand of municipalities. Many states and municipalities are using IOUs for payments.
- Welfare and unemployment checks are two months behind on average. Social Security checks and Medicare reimbursements are delayed. Some private pension funds have reduced their payments by 10 – 25%.
- Hospitals and doctors refuse to see Medicare patients until Federal reimbursements, already eight months behind schedule, are paid.
- Public unions across the country are on strike. Large areas are without teachers, police, firemen or hospital staff.
- Food stamps are being rejected at grocery stores because of slow reimbursement and government default risk.
- Martial law has been imposed in several cities to counter rioting and looting.
- Isolated runs on banks have occurred. Mattress-stuffing is considered less risky than zero interest returns from banks.
- The dollar is being rejected by local merchants around the world. Oil is priced in a weighted basket of currencies of which only 20% represents dollars.
- Foreign disinvestment in Treasuries has been accelerating as a result of trade wars, concerns of default and the desperate need for funding at home.
- Gold is selling at $2,800 per ounce.
- The economy continues to deteriorate despite QE on a scale not even Paul Krugman would have recommended. Treasury and toxic asset purchases have swelled the Fed’s balance sheet from $800 billion in 2008 to $6 Trillion.
- The deflationary spiral continues despite incredible money-creation. Banks continue to add more excess reserves. Creditworthy borrowers refuse to borrow. People and businesses everywhere have hunkered down, waiting for the next shoe to drop. Many withdraw funds from the banking system in fear of its collapse.
The Possible (Likely) Emergency Measure
It is against the above economic backdrop that the President of the United States Joe Biden (in office for six months after former President Obama resigned “to spend more time with his family”) appears, along with Treasury Secretary Chris Dodd and Fed Chairman Barney Frank, and issues the following short, terse message:
The Federal Government, as a result of our national economic emergency, will be recalling all U.S. dollars effective immediately. All will be replaced with new currency known as the JohnLawDollar. Each old dollar will be exchanged for three JohnLawDollars. Amounts in checking accounts and savings accounts will automatically convert by tomorrow at 10 AM. Currency in circulation must be taken to a bank and converted within the next 48 hours. Dollars in foreign countries will have 72 hours to convert. All old dollars will be unredeemable and no longer legal tender after the deadlines. All contractual obligations will be honored in JohnLawDollars.
This action is necessary in order to revive our economy from a downturn nearly as severe as the Great Depression. Your new dollars are triple what your old dollars were. With your larger amount of money, we encourage you to go out and buy stuff, lots of it. Your cooperation will revive the economy.