Probability/Severity index

When it was at the top of the heap, Bill & Dave’s Hewlett Packard management training included analyzing potentially risky decisions using a Probability/Severity index. If something was very likely to happen, but would have little impact on operations, the probability would be high, but severity low. Plan for it taking place, but don’t put too many resources into mitigation as there are few consequences to worry about.

While I and most schooled in Austrian Economics are certain the dollar collapse is imminent, you may think we are imbibing strange substances. Thus you give looming economic disaster a low probability. Fine, but consider the severity if we are right. This potential merits a good look even if you think we fear too far.

Some think we claim a pending rerun of The Great Depression. Nope.

* Prior to The Great Depression, the USA was a manufacturing colossus. Now the USA manufactures precious little. We export dollars and import manufactured goods.
* In the 1920s Americans had over 1-year’s income in savings. Now we owe more than that in unsecured consumer debt. There’s no savings to fall back on.
* In the 1920s the dollar was convertible to silver on demand. Now there is no connection whatsoever. The Federal Reserve has no limits on the number they print.
* In the 20’s nearly every household was getting by on one income. Hit with a job loss, both could seek income, providing twice the margin for error. Now it takes two full-time jobs outside the home to “make ends meet”.

You furthermore should understand what began at Bretton Woods in 1944. There and then the conspirators established the dollar as the world currency. Thanks to that event, all of the world’s currencies are “backed” by US dollars. In one hiccup, every one of them could come home expecting to buy something of value. All of the currencies in the world will turn to dust with the dollar.

Whatever probability you establish as the possibility the Austrian school of economic science is right, you have to multiply it against the severity of not only massive job losses, but the destruction of the dollar itself.

The severity is more extreme than anything this country has experienced in 233 years (Happy Anniversary). No matter how “out there” you think we are, the possibility deserves a bit more attention than whatever mind-numbing stuff you are watching on TV.

Give it an hour and read these essays.

… GO NOW …

Now read one of these books
and/or these.

I’ll lay out a few probabilities for the future in my next installment.

The beast lay on the ground writhing in its death throes. Its massive head, legs, tail and body wreaking destruction on everything around it. Even in dying, it continues to crush innocent and guilty alike who are unfortunate enough to be within reach.

Keep your head down, pantry full, bunker ready and friendships strong. The next phase will be interesting.