(Hat tip to: Gary North)
Most people will not change. Too radical.
The best examples in the 20th century were Jews in Germany in 1933. They stayed. This included Jewish bankers, all of whom could have left. They thought they could deal with Hitler. They did not read Mein Kampf. They did not take it seriously.
About 7% did leave early: 38,000 out of 523,000. More left after 1938. At some price, almost all could have left. There were countries that would have let them in. They would have had to learn a new language. They would have arrived in poverty. But Jews had faced those options ever since the Assyrian captivity in the eighth century B.C. So what?
Jews had an answer for worrywarts. “No problem. It can’t be that bad.” It got worse.
Look back at the economy in October 2007. The Dow was at 14,000. The banks were booming. Real estate was down a little, but the experts gave no warning. They were wrong. All of them.
The U.S. government is running a $1.8 trillion deficit this year. Federal tax receipts are down 34%, which means that the deficit will go above $2 trillion. No one cares. No one says, “This is the end. The American economy will never again be what it was.”
And what do most people say? “No problem.”
Medicare will go bust. Social Security will go bust. “No problem.”
The unemployment rate keeps rising. “No problem.”
When people refuse to face reality, because reality is going to be more painful than anything they have experienced, they think the status quo ante will return. “No problem.”
The price/earnings ratio for the S&P 500 is over 120. Traditionally, 20 was regarded a sell. The investor pays $120 on the hope that the stock will retain a dollar of earnings, and pay investors some minimal percentage of these earnings as dividends. “This time it’s different. No problem.”
Your friends don’t want to hear your pessimism anymore. They don’t want to change. They will refuse to change.
People count the costs of doing something radical. It’s high. They have counted the immediate cost of doing nothing new. It seems low. They prefer doing nothing.
But what about the long term? What about:
1. Retirement (no Social Security or Medicare)
2. The Federal Deficit ($1.8 trillion this year)
3. Federal Reserve’s monetary base (doubled)
4. Falling house prices
5. Rising unemployment
6. The war in Afghanistan (forever, until our defeat)
How do you reason with these people? Answer: you don’t, if you value your time and your privacy. If you turn out to be wrong, you will be ridiculed or at least treated as a child. If you are correct, you will be hated.
They don’t want to change. They will not change. They will not listen to you.
And when things turn out much worse than even most newsletter writers are forecasting, you will be hated.
Do you have a real plan to deal with what is obviously an unfolding disaster: rising government ownership, massive deficits, rising unemployment, falling house prices, busted retirement pensions, rising interest rates (falling corporate bonds), and Federal Reserve inflation on a scale never seen in American history?
Or do you think you can delay. “No problem!”
A Tsunami is coming. In such a scenario, you have got to get out of the water and off the beach. But few people ever do.
Allocate some percent of your wealth to tsunami-avoidance. Do it quietly. Do not discuss this with your big-mouth brother-in-law.
What do you really think is likely to happen? Not what you would prefer will happen.
Problems. Big, big problems.
(Source: Gary North)