Lest we forget the lesson about the calm before the storm...

or more to the point, being inside the eye of the hurricane.  I look around at people I work with and people I know. They are just going about their lives as if nothing is wrong, nothing will go wrong, etc.  They seem convinced that government has it all under control, no need to worry about money in the bank, no need to worry about 401ks.  Oh sure, the recent Detroit BK has gotten them to buzz a little bit because pensions are actually getting destroyed in the process (just like I knew they would).  And there are niggling little signs of government hacks wanting to "share the burden" with military pensioners (something that I have never seen mention of before in my life until now).  But for the most part, the herd is heads down, grazing peacefully as the global debt collapse draws closer.  Some even have the audacity to mock people who are buying gold.  Yep, that's herding behavior all around.  It's not a problem until it's a problem and then damn, what a fraking problem it becomes "all of a sudden".

I don't claim to know when it will all collapse but I do think that some kind of default has to happen to lots and lots of retiring boomers, especially those who only work 20 years for the city or for the military and then believe that entitles them to lifetime benefits upon retirement.  Why must it happen?  Because the money to pay them simply does not exist.  Why not just tax the rest of us to get the needed money?  Because it is a $hit load of money that they are short and if you tax the working class (what's left of it that is) too hard then they either flee or they simply stop working so hard.  Nobody is going to just keep up their normal productivity in order to make transfer payments to government workers. Yet that is what these people are counting on.  They say "hey, we had a deal".  They say "hey, it's illegal to not pay us, we have rights".  Without really understanding it, they are really saying "hey, someone told me that you were going to be my lifetime slave.  That gives me rights of first access to the fruits of your labor.  PAY UP".

The whole thing would be laughable if it weren't so sad.  There simply isn't enough money to pay all the Ponzi promises and so payment will not be made.  We're all Detroit now (or will be soon enough).  Even if government does stupidly try to force the remaining workers to bear the load of ridiculously generous government promises, it cannot work. It will cause economic collapse at best and more likely armed revolt.  Nobody with a gun is going to allow themselves to be enslaved by someone they don't know.  It's just not going to happen in the US and it is best for all if the con men running the show begin to admit it right now just like they did in Detroit.

Here is the truth of the matter: while the soon to be informed patsies think that everyone else should just work harder in order to keep these Ponzi promises, everyone else is looking at the patsies and wondering how they could be so gullible as to listen to the sweet promises of lying politicians.  There is such a long standing track record in this country of defaulting on promises (including defaulting on gold convertibility of the dollar back in 1971) that only a complete idiot would ever trust their retirement to these con men.  The fact that so many have done it does not make people like me liable in the same way that I am zero liable if my neighbor falls for a con job and gets cleaned out like a patsy.  I will not enjoy watching them get screwed like that but neither will I bail them out.  I don't trust government and I do trust math.  Math says that government is a liar who cannot possibly pay up.

Mish wrote today that he expects a "disorderly" collapse in the EU banking system.  I couldn't agree more but what always makes Mish worth reading is that he knows the numbers involved.  He noted that, "ECB will end up as "supervisor" of 128 banks with an aggregate balance sheet "somewhere between €26 trillion and €27 trillion.".  He followed up with, "How big is the proposed bailout fund? €55 billion, not available immediately, but built up over 10 years. It will take 10 years to build up a fund equivalent to a mere 0.2 per cent of the asset base."

I hope you see the hopelessness of the situation.  Much of the EU is in a greater depression (as I predicted it would be many years ago).  You can't pay off your debts AND feed and clothe and house yourself if you don't have a good paying job.  I can't tell you whether the EU will collapse first or if Japan will collapse first or if the world's nations will agree to have a world war in order to divert everyone's attention from the collapse of the scam.  But I can tell you that this cannot end well.  I can also tell you that when the collapse does start, governments will lose the confidence of the people and that is all that keeps any buying power in the fake government money.  When governments collapse the money eventually goes worthless.  It can take longer to happen than anyone would think possible but when the collapse does occur it tends to swoop down upon the people so quickly that those who did not prepare in advance get royally screwed.

Folks, we were told that government has fixed all of the problems and to expect growth, blah blah blah going forward.  It's just another pack of government propaganda and lies.  Nothing has been fixed.  Not here in the US.  Not in the EU.  Not in Japan.  Not in China.  Not in Australia or South America or Canada.  The can has been kicked down the road and the day of reckoning has simply been made that much more harsh when it finally does arrive.  2008 was the first wall of the hurricane.  We got though it barely by the skin of our collective teeth and have been living in the eye since then.  All the while the hurricane has doubled or tripled in strength but hey, the sky above is blue so "no problemo", dude. 

Don't believe it folks.  There is no way out of this hurricane without going through the wall again.  We are surrounded by a coming catastrophe of our own design.