I have been revising my opinions on the economy of late ...

I no longer agree with the deflationists that we will be just like Japan. That is to say in a condition of continued deflation which would be the result of keeping alive bankrupt (zombie) banks and corporations (though indeed there are already any number of zombie banks and corporations, to be sure, but our situation is different in kind from that of Japan in that the United States is capable of imperial action and foreign adventure and the Japaneses currently are not).

I also part with those predicting hyperinflation because I don’t believe Open Market Operations will have the inflationary impact they believe will occur. I say this because bank lending, the best tool for inflating money supply, will remain constrained and be a drag on the economy. This means I believe when the economy has gone into a double-dip decline between now and 2016 (or thereabouts, I have no crystal ball) the Fed will create ways to inflate using Open Market Operations that will be effective while government and business collude to create wars and an eventual green technologies bubble that should measure 27 trillion dollars when it goes bust. This is to say there are many tools at hand to keep the day of reckoning or any true democratic solution at bay.

This means hardship and increasing third world conditions in the United States for for everyone but the top 20% of our society and a kind of serfdom or corporate indenture existence for any individual within the top 20% who cannot integrate themselves into a global economy through a direct relationship with the financial markets.

Even I am amazed at how the ideas of Keynes and von Hayek are being so deftly used in concert to social engineer events so that majority will vote against their own interests within the domestic two party system. Unless you have 5 million dollars in liquidity your short and long term interests as citizen are not included on the bargaining table except as disposable collateral marketing pieces of a rhetorical nature meant to garner your vote and ratification for your current increasing marginalization and economic (and therefore political) demise.

There will be protest like in Wisconsin and the Occupy Movement, and there may be sporadic incidence of riots, but nothing that will not or cannot be contained. I see no mass action on the part of labor which will be content to be the ATM machine of the democratic party hoping to live off the scraps of access. There is still too much wealth to be squandered and only people who who can't feed themselves revolt. Access to bread and circuses even for the most squalid will continued to be provided in one form or another.

The noise you think is a bang is actually a whimper. Still if you are a humanist, if ever there was a time to live for future memory, now is that time in accordance with your highest ideals with courage to confront coupled with realistic acceptance of your basest impulses and drives. In a sentence … work on your soul and find a way to serve others.