To continue:
We all know what discounting by time is. By think of it as discounting by “genetic distance.” For example, we are less likely to consider the suffering of a pig in our ethical calculus than a human. Within the human race, this overtly manifests itself as racism, and Peter Singer calls this “speciesism” outside of out the human species.

Regarding that view… it seems to be a force for global protectionism (protects local jobs from foreigners who presumably do not share as much genetic material), although there are other forces against it.

About the list:
I would add Henry C. K. Liu to that list too although he isn’t an Austrian. He called the fall of the dollar in 2002.

However, I am going to be realistic now instead of making policy recommendations on the US that are unrealistic. In my mind, a break up of the US is far more likely than social democracy. I do not think it is possible because of ethnic inhomogenity. Read this for more. (Yes, it was a psychology paper written by a liberal if one wants to use ad hominems on the source.) I do believe our morality is derived from our evolutionary heritage (and also market behavior; those who understand it can use it to have an edge in trading securities), and respect for the in-group is one feature of morality. It is hard to justify this using abstract moral principles (because it evolved as a means of passing on our genes to future generations), but it is a salient future in human morality. One reason why this probably evolved is to deal with the free rider problem. In addition, it is also congruent with the “selfish gene” hypothesis and “kin selection” since people who possess similar ethnic heritage have very similar genetic material relative to other groups.

Another implication of this view is that immigration would make Japan’s problems worse. In addition, there is a large poor working class there and they do not need more competition.

Again, using that argument, the prospect for France isn’t that good either, but this is more long run thinking and I do not think it has much use in security valuation.

There is simply not enough money and not enough workers to pay for all of the promises made in the past. This is one of the major problems of socialist policies.

kynikos,

A US conversion to a European style socialist system has huge implications for global stability. It implies reduced US economic output and reduced US influence on the world in general. Many people seem to think that this is would be a good outcome, but it is a mistake to think that the US is a destabilizing force on the world. It is not. Such an outcome essentially would require breakup of the USA and the formation of a new government with a new constitution.

Thinking beyond the huge economic problems that the US faces, it seems as though there is going to be a power shift towards the dictatorial / communist governments, which is never a good thing.

In my mind there is a danger zone here from 1-5 years away. If we get through the financial collapse ok, we could go on for a long time as a corrupt socialist state, as almost all of Europe has since the 1930s.
”

Trust me… becoming like Europe would be the best thing for the US. So Mike puts a negative normative valence on the European social model.

I do not know what Mike means by “wealth,” but I’ll say that their social capital (if that’s a form of “wealth”) is largely depleted by immigration. And the US’ manufacturing capacity (if that is a form of “wealth”) is athropied generally by trade policies and other political stupidity. Too bad… socialism is not possible in the US.

I do favor the European welfare model as a political outcome to this instead of extreme laissez-faire capitalism (despite their redistribution and high taxation, Sweden more laissez-faire than the US if we disregard the redistribution.) At least it would reduce the suffering (but reduce the creation of other forms of “wealth” and “prosperity.”) and most people would prefer that. In my view, the US model offers most people equity-like risk, and debt-like returns, but Nordic socialism offers bond-like returns with bond-like risk. (In this context, the word “bond” refers to a security with a risk/reward profile of German government bonds, US treasuries, or high grade corporate bonds; I think the deflationary crisis showed many fixed income investments have high risk such as asset backed securities.)

Of course, Mike does not argue that the US’ former (and especially their current) economic policies is a local or global optimum that is congruent with his notion of “freedom.” But, I just wanted to say that I disagree his negative view of European socialism and point out that if socialism is actually possible, it would be to the benefit of the US.

I also challenge the notion that European socialism is “corrupt” (it could depend on how one defines “corruption”), but if one uses the Corrupt Perceptions Index, it shows that Sweden, Denmark, Finland and Norway are less corrupt than the US. Hong Kong and Singapore do well too.

So buying seeds, rootstock and a good solar power system might be a more practical use of funds for the semi-rural patriot. Firewood I’ve got and we have more deer than we know what to do with.

I envy the Swiss. They mined all the roads in and out of the country decades ago…

Add a hunting rifle, a sidearm and an axe to that equation, and you’ve got food, heat(as long as you have a fireplace) and self defense taken care of as well.

The root of the question seems to be ‘how can I best preserve the wealth I have?’ and I think your answer, though not satisfying, is probably right:

“And what do all of these followers of the Austrian School think we (meaning our governments) should do, now that their worst fears are coming true? In a word, to a man, nothing.”

Where the difficulty comes is in understanding what we (meaning individuals) should do. There’s no doubt in my mind that we, as a government, will do something; that’s what governments do in times like these. Personally I don’t think the governments of the world will magically save me or my family. This leaves the responsibility as a personal one.

What are the true measures of wealth? Dollars? Gold? Refurbished Porsche parts?

How about food, water, power and shelter? A person can make arrangements for water and shelter, one because it’s easy to find and in great supply, the other because it can be held individually. Power and food are both problematic since the means to produce these things aren’t generally held by an individual and so subject to real ownership.

My thinking is that the prudent investor would have clear title to a home and a water well. Cash in excess of short term needs should be converted to a barter medium. But what barter medium? Gold is popular but it’s not nutritious. Stored food rots. Its difficult to capture and contain energy.

Is cash under the mattress better than gold? I would think not, however the collapse of the Weimar Republic suggests gold may be a risky avenue as well. I believe there are still ongoing efforts to return gold seized by the Nazi’s to the descendants of Apocalypse victims.

I don’t see a clear solution to this problem. It seems better that we make all attempts to avoid the economic collapse that is threatening us. If that fails, I would think that all bets are off.

Positing chaos, the rest is easy.

We could just become France, stagnation and slow decay, living for decades off the wealth that was built when the nation was free. Or we could implode rapidly as the financial crisis deepens — likely as the currency fails, if it fails, and it may not completely.

In my mind there is a danger zone here from 1-5 years away. If we get through the financial collapse ok, we could go on for a long time as a corrupt socialist state, as almost all of Europe has since the 1930s.

Some of your assertions are scary. But I must admit, I’ve come to some similar conclusions about the direction the United States is taking though from a totally different perspective. Some of your ideas represent a convergence of two different sets of ideas that seem to be leading to the same conclusion.

So, a question. If the United States is in fact heading for massive social upheaval, do you have any kind of prediction or idea regarding a time horizon of such a series of events if taken from a financial perspective?

In my considerations of an event of this kind, I do not think I could leave my country. And so I must consider how my family and I could weather such event here. Having a time frame in mind would be very helpful in preperations.

Thank you.