An American Spectacle: The Value Of Trying To Look Long-Term Economically

It doesn't take a genius to see that we are currently in a serious economic quagmire. With the substantial recent hit to the stock market and dismal unemployment numbers, it's enough to make one seek to escape from the real world. Unfortunately, as much as nostalgia or fantasizing about some dreamworld may be appealing, at some point we have to come to grips with reality. The reality of this economic crisis appears to be that its effects will remain with us for some time. And there does not appear to be any sign that things will get better soon. Many believe that the top three economic issues in America right now are jobs, jobs, and jobs. In this era where jobs are hard to come by and people are struggling to make ends meet, things can look very desperate very fast. Whereas some may propose radical measures to combat unemployment, the truth is that the nature of our current unemployment problem may prove to be unsolvable. If high unemployment is prolonged, then many may become unemployable; unproductivity may set in for the populace; the labor market may further deflate. Without employment for a long period of time, individuals can lose their sense of a functional reality. Given enough time and regulations, occupations that were once enjoyed may become absolutely obsolete. Students are trying to gain skills to better themselves and their society, but the market is severely broken. It may be easy for some individuals to think, "It's not my problem that some kids cannot find jobs", and then be on their way. But such a retort only highlights the deeper issues involved with this economic crisis. In a country where many are graduating from college and looking for work to no avail, it is as if older generations are telling the younger generations that they never even had a chance at a decent, functional life. What kind of society are we living in where children grow up to give up on everyday concepts like getting married, having children, and being out on their own? I mean, it's a bit comical, really. With the prospect of a higher education bubble, it is as if our scheme was all a ruse from the beginning, and now younger generations are doomed. This state of life-stagnation (with no marriage or child-rearing) on a mass scale as applied to younger generations may give way to serious cultural problems going forward. Many may simply refuse to participate owing to the broken nature of the game. The costs of such widespread unemployment may include a loss of faith, loss of integrity, and loss of credibility in our system. This sort of result would work to no one's advantage and would affect every American citizen. A growing loss of faith and integrity in the system could very well cause much more crime, unrest, cynicism, and ill will for all of us. Trust is part of what makes a society and economy healthy and able to grow; without some underlying sense of trust, commerce cannot function properly. Pervasive distrust is bad for business and can make a civilization (let alone a society) wither. Hence, the idea that "it's not my problem" can only take us so far. At some point, whether we like it or not, this mess will be everyone's problem. We should try to start solving it immediately. There is a piece of me that wishes that the market would reorient itself and that society would mobilize towards a different vision of the future. I recently explained how we need to solve the ambiguity of American politics and find some sense of direction. I also recently discussed a possible change in the American way of life where individuals could live in communes as families or a set of families to deal with the economic crisis. Although one would hope that people would grow closer in the midst of such a crisis, there doesn't appear to be any rise in communalism right now. Where families could come together, it appears our society is designed in such a way as to draw people further apart. And let's face it, people enjoy eating their Chipotle and driving their Toyota Corollas. It would appear that most Americans have not yet come to the conclusion that our way of life is going to have to radically change for us to survive. Though America is locked into a materialistic culture for the time being, the future may testify that those who were willing to come together communally were those who fared best during these hard times. One would desire that society would respond to market forces accordingly, but nothing happens. Instead, we all fall prey to the prisoner's dilemma and individuals fail to cooperate. Why this communalistic concept has not become more mainstream in these dire times is beyond me. It is said that retirement is the end goal of any investment strategy. In a way, working a job is purely an investment strategy. In light of the stock market falling and individuals being unemployed, in the long term, retirement becomes that much more out of reach. It would be safe to us that many of us have already given up on the idea of retirement sometime in the future. Thus, if we remove retirement as being the end goal of our labor, then our great American economic game is transformed. Though our markets may be broken, the economic game merely changes. Again, one would think that the market and the populace would reorient themselves for this game change, but there does not appear to be any change. Business-as-usual only seems to stop once the sky has already fallen and doomsday has set in. What this means is that for today, far from individuals' coming together, there may be a growing sense of resentment and anger in society. There may be much more distrust and much more cynicism thereby stunting business and reducing aggregate demand. Individuals may want to go out to that new restaurant, but may not, in an effort to save money or to avoid going out in public or because of a fear of food-poisoning or worse. Individuals may want to go out to see that new movie coming out Friday night, but may refrain from doing so out of fear of crime, fear of crowds, annoyance from the public, etc. In the past, such pent-up societal distrust and cynicism has become fuel for the rise of fascism and other counterproductive ideologies. This is why it is important for Americans to consider the consequences of their actions today going into the future. If our society evolves into one where an increasing number of people do not want to participate, then we will all be affected. It would be much better that we face up to the real issues today rather than let them latently metastasize and evolve into much greater problems in the future. This includes asking questions about what kind of world our children are going to grow up in and what people are going to be doing for a living in the future. We need to ask what will happen when chronically unemployed people become the norm in society. We need to ask about what's going to happen if and when Social Security collapses ten years from now. We need to ask why we're not doing a better job of preparing and mobilizing for the future. We need to ask why we're not doing a better job of passing the prospects of a better life and a better world onto our children. The sooner we come to terms with the real problems and deeper issues, the sooner we'll be able to find viable and practical solutions. If we lose sight of the long-term economically, then no matter where we turn today, we will remain lost. ACTION ITEMS: Bullish: Traders who believe that doomsday fears are unfounded and that it will be business as usual for American society for the long-term future should consider the following investment strategy:

• Buying gold and silver coins as a hedge against inflation may be a good choice.

• Also look into SPDR Gold Trust ETF GLD and iShares Silver Trust ETF SLV.

Bearish: Traders who believe that the American way of life is unsustainable and that American society will not reorient itself accordingly in time to avert disaster should consider an alternative strategy:

• Buying lots of bottled water by the gallons, kipper snacks, chili, and canned fruit in bulk. Dried fruit and dried beans also work as well.

• Buying hundreds of bars of soap to use as currency just in case the entire American economy falls apart and society collapses.

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