Catacomb Resident Blog

So It's Crashing

15 March 2023

First, I must acknowledge that yesterday's post never went live until this morning. This blog does not use any kind of special software to serve up the content. This is a static webpage operation; I have to update the index page manually every time I post (that is, adding a new file), along with the RSS feed. So I write the files on my computer, then copy them to the server. I'm not exactly sure what happened, but I did copy the files over yesterday. Yet, somehow things got rolled back to the previous day's files. I'm certain the guy who owns the server didn't do anything like that, not on purpose, so it's a complete mystery to me.

Now, on with today's post...


Let's put two and two together here. I've made the case that God is in control, though He is a feudal Master who delegates some tasks. Satan is not God's enemy, but he's our Enemy. Thus, Satan has a huge job of keeping in thrall all of those who fail to embrace the Covenant God offers. That's the majority of the human race. There aren't many folks who qualify for covering under the Covenant these days. That's why the world is such mess. Almost everything we see happening today is under Satan's dominion.

I've also made the case that those who seek divine covering under the Covenant don't face the same sorrows as the rest of the world. Granted, the Covenant only ameliorates the suffering that comes down on us from the Curse of the Fall. Still, the difference is notable, and that's the source of our testimony to the lost and dying world. People can see that God provides for us in ways that mitigate the sorrows of our mortal existence. The difficulty is that we need to see His blessings so we can rejoice and exude that attitude that gives our witness a punch.

And that joy requires that we get a realistic grip on how His Covenant blessings work. There's no way He's going to explain to us in precise mathematical ratios how much better off we'll be under His Covenant. That would be missing the point. The point is that those around us will notice, so the blessings will always be managed by His hand to enhance His glory. It's not so much about our comfort, but that we focus on His reputation and boast in His provision.

The American economy is wholly focused on more stuff and greater comfort. Back a couple centuries ago, that wasn't such a complicated thing. The standard of living was mostly a matter of food and shelter. Leisure time wasn't really a major consideration, though I believe a cursory analysis would show that the long hours of the previous centuries were not so heavily burdened with the fast-paced productivity emphasis we have today. Agriculture and resource harvesting wasn't conducted at a break-neck pace except in rare circumstances. That's only seen in mass production. As a higher proportion of the population went into manufacturing, more people had to endure the productivity drive. So at some point, people began to aspire to more time away from the working environment, and propaganda (advertising) glorified it.

Given that materialism was already the primary root of American culture, everything that was built on it remains false; it's outside of any Covenant promises. But this has gone farther into the most extravagant pursuits of anything and everything except the Creator's glory. Today, the US economy is loaded up with false expectations. We can read about the "addiction" of American business to easy credit and low interest rates, and how the whole thing has been tweaked and twisted until it cannot function at all without those low interest rates and very loose liquidity.

But loose liquidity (too many dollars available in the economy) and the high velocity of currency movement (gotta keep that money moving) brings other problems. It's utterly impossible to fine-tune the flow to benefit the financiers without slopping it over too much so that the little people start demanding their share. By the time the effects of a certain level of liquidity can be read in the markets, it's quite a long lag time and things are already too far the wrong direction.

Just so, people who can understand economics and how fragile things are cannot give you a firm estimate of when things will crash. It did crash in 2008, but the bankers kept the system alive by drastic measures we may never really understand completely. There were an awful lot of secret deals that are still at least partially secret, involving an awful lot of things ranging between precious metals and commodities to derivatives and so forth. But whatever those private deals might have been, it appears that those same deals won't help much this time. It has to do with having no more stuff to deal; all the stuff they could control is already committed. They've run out of room to run.

As Brandon Smith warns:

There are many financial tricks that might slow the pace of a credit crash, but not by much. And, here’s the kicker – Unlike in 2008, the Fed has created a situation in which there is no escape. If they do pivot and return to systemic bailouts, stagflation will skyrocket even more. If they don’t use QE, then banks crash, companies crash and even bonds become untenable, which puts the world reserve status of the Dollar under threat. What does that lead to? More stagflation. In either case, rapidly rising prices on most necessities will be the consequence.

How long will this process take? It all depends on how the Fed responds. They might be able to drag the crash out for a few months with various stop-gaps. If they go back to stimulus then the banks will be saved along with equities (for a while) but rising inflation will suffocate consumers in the span of a year and companies will still falter. My gut tells me that they will rely on contained interventions but will not reverse rate hikes as many analysts seem to expect.

But a crash will never be absolute. People will always find a way to exchange at the local level, but that's the reason we should have been looking at what is available locally. The market for imports or even things shipped long-distance inside the country is what will be shaken the hardest. Not stopped altogether, mind you, but shipping will be cramped a great deal. That kind of market relies too much on banking, and banking will get very tight. Easy money will be replaced with very hard money, in the sense that credit will shrink to almost nothing. It will be like those lakes that dropped during a major drought in the southwestern US: When the liquidity goes down, only the smallest boats can keep floating and maneuvering. The big boats can't even turn around, should they succeed in floating at all.

That's the key to understanding an economic "collapse" -- liquidity. How much money is available and how easily can you get it? Because everything our economy does requires credit. The use of credit reflects a very low trust in God to provide His way. The whole business of borrowing for anything more than mere physical survival itself is contrary to the Covenant, and is forbidden in the code of law.

But it's not legalism. The system can force you to borrow in various ways, and your convictions may call for taking out loans just to do all the other requirements of the Lord. It's not an absolute prohibition. Rather, what's utterly prohibited is charging interest to your covenant brothers and sisters. But more broadly, the lack of a Jubilee wiping debts every generation is why civilizations collapse. Ours is heading down the tubes.

Outlook: Anything that relies on quick and easy credit (imports, long-distance shipping, etc.) will be at high risk of shutting down. Stuff produced locally will be in abundant supply, especially if it normally ships out to other places. In other words, basic life support will continue because it's always been mostly local, but things brought into the local economy from any great distance will become a short supply. Prices will rise on some things, fall on others, and common expectations for comfort will evaporate. How quickly people can adjust their demands will determine whether social stability will collapse, too. When your local population is loaded with low-trust people who suffer from a very short-term orientation, crime will explode.

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