Sunday, November 30, 2008


Over the Thanksgiving holiday I spent some time in a house full of people I didn't know all that well. In this group was a man named Trace that, among other things, runs the website After talking with Trace for 15 minutes or so I found myself conflicted - did I like him or did I not? Smart, articulate, informed, etc., etc. but also, well, scary.

Trace's thing is finances and the economy. Over the last few months I've learned more about the economy than I ever cared to know. Just when it was making sense and I was feeling comfortable that the bottom of the decline was just round the bend, I run into Trace who tells me that the economic framework of the last 100 years (maybe even the last 600 years) is coming apart and crashing to the ground. The speed and depth of the "vaporization" of assets and capital is on a scale that is unimaginable. It was at this point I realized the first thing that I am thankful for - I don't have too much money so even though my personal capital has vaporized right in half it turns out that half of not much is also not much. The power of poverty!

Amongst the many interesting things Trace had to say I was struck by his thoughts about the politics of the last election. Trace explained that there are three layers to society. At the bottom are the poor and/or lazy that want the government to pay for everything. At the top are the ultra-wealthy who are either well-connected enough or insulated enough that they exist outside of party politics. In the middle are those that want to make their own money and keep it for their own purposes. The middle has been squeezed out by the bottom and narrows with each election. When an economic system collapses, Trace explained, there are only two options: liberty or repression. American Revolution = liberty. Rise of Nazi Germany = repression. The masses are easily susceptible to each. Trace did not go on to elaborate on whether the Obama administration was repressive or not, though he did point out the Patriot Act was the ultimate tool of financial repression allowing the government nearly unfettered access to financial information. The bailout, or government control of the economy, also is repression.

While Trace did slip very close to the edge of presenting himself as a wacky libertarian, conspiracy theory, Ron Paul clone, I feel his pain. I visit that same domain from time to time. I always come back, but I wonder if next time I'll stay.

I've been distrustful of the bailout, adamantly opposed the Patriot Act and continue to believe Ron Paul wasn't such a bad guy, so in the end I liked Trace. He didn't make me feel good about coming out of this with any money - actually he made me realize I don't have any money, just the promise of money that doesn't exist - so I'm not going to be calling him up for any warm and fuzzy chats. I'll remember his perspective on this whole mess, though. I'll remember and I'll shudder a little each time.

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