Into The Grey Zone The future is always a grey zone, never black and white.

This week is going to be important for global markets and the effects may not be visible for weeks or months after. Specifically, the United States Treasury is about to try to borrow $235 billion dollars in one week. And it is reported that they are going for similar triple digit amounts in a number of weeks ahead as well.

I really do not see how this level of borrowing can be sustained for anything more than the briefest period of time. And even this level of borrowing, held to a short period of time, is going to set off shock waves in the international markets. How the market reacts to such borrowing though is not going to be easy to predict.

Due to the jackasses who spam endlessly, account creation is via my approval only. If I don't recognize your handle, I'll probably delete it. If this annoys you, then good.

Last night I had a realization about what I am watching happen to the entire global economy. It's a response to a disease (debt) that is acting like a cancer that has metastasized to the entire body. One by one each of the critical organs begins to die, slowing to a crawl, and eventually falling down. Meanwhile, the brain, lacking valid inputs and warped by the disease itself, begins to hallucinate, believing itself to be recovering health when it and everything around it is dying.

"We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution." - Abraham Lincoln

Before you can even begin preparing for "hard times" you should have some idea of what "hard times" you expect. The fellow who is preparing for 7% unemployment and the loss of his job has a very different set of boundaries than the fellow who is preparing for total global thermonuclear war.

Monday, March 2, 2009 could be a rough day in US financial markets. As I write this, Asia is down hard in early trading while it is still Sunday here in the United States.

"An unarmed man is a subject, an armed man is a citizen." ~Thomas Paine~

So we're going to spend $900 million to help rebuild Gaza. Wow. Just wow. I hate to sound like a jerk but seeing as how we are in financial chaos within our own country and seeing as how Gaza was not exactly the greatest place to live in to begin with don't you think this is just ludicrous?

It's February and the market is down almost 25% since Obama was elected. The major financials have lost over 30% of their remaining value since Obama announced his non-plan to "save" the banks two weeks ago. We've got people like Rick Santelli on CNBC Thursday doing a major league rant about government subsidizing 'bad behavior' and calling for a "Chicago Tea Party". Meanwhile GM seems to have written off Saab and thrown it to the wolves/creditors. And today's market is just barely above its 2002 low of 7286. That's before adjusting for inflation.

The most likely short term collapse scenario that I can envision is similar to what was described in Lessons From Argentina's Economic Collapse (PDF). That would be a financial implosion so drastic that it basically either collapses central government or leaves central government so ineffective that it might as well not exist, at least in terms of providing services. The least likely short term collapse scenario that I can envision is global thermonuclear war. But saying it is the least likely doesn't mean you should ignore it. It simply means that an extraordinary number of conditions would have to line up in the short term for that to occur.