TRIGGER POINTS AND EVASIVE ACTION
When would a wise Jew have begun making plans to leave
Germany? 1933? 1934? 1938? 1939?
In retrospect, most people would say 1933, the year
Hitler was appointed (not elected) Chancellor by President
von Hindenburg. On 30 January, Hitler became Chancellor. He
asked Hindenburg to dissolve the government and schedule
new elections for March 5, which Hindenburg did.
Should a Jew have begun packing his bags? Maybe not.
Maybe after the next election, the Nazis would have been
defeated.
On 27 February, the Reichstag building burned down.
One man did it, who admitted he had done it. Hitler
immediately identified him as a Communist, although even
today, it is not clear that he did anything but act alone.
Hitler used this as a propaganda tool. On March 5, the
Nazis got 44% of the popular vote, up from 33%. With an
allied party, they had 52% of the vote in the Reichstag.
Was it time to pack the bags? Maybe not. The Nazis did
not have a majority. They had only a coalition majority.
On March 23, the government passed the Enabling Act.
It took a two-thirds vote to do this. Hitler now possessed
dictatorial powers. He had attained these by means of
support by rival political parties.
http://en.wikipedia.org/wiki/Reichstag_fire
Was it time to pack the bags? Maybe not. Those powers
might not be used.
On April 1, a one-day boycott of Jewish businesses was
staged by the S.A., which were technically private storm
troops. Was it time to pack those bags. Maybe not. This was
not government-directed. It was only symbolic.
What about 1935's Nuremberg Laws on Citizenship and
Race? They made it illegal for Jews to be citizens. But
that was only politics. How many votes did Jews have,
anyway? They were only 1% to 2% of the population. Politics
isn't everything.
And so on, right down to Crystal Night in November
1938, when rioters broke the plate glass windows of 7,500
Jewish-owned businesses and burned or damaged 200
synagogues, meaning most synagogues in Germany.
After that, over 100,000 Jews packed their bags and
departed. Between 1933 and 1939, about half the Jews in
Germany emigrated: 250,000. But half did not.
There were a series of trigger points, 1933 to 1939.
Most Jews sat tight until very late.
Yet in Austria, Ludwig von Mises saw the handwriting
on the wall in 1934. He looked at the map. He concluded
that the Nazis would wind up running Austria. Hitler was an
Austrian, and he would want to control Austria. He packed
his bags and took his first salaried teaching position, a
job in Geneva, Switzerland. He warned Jewish friends to get
out. Economist Gottfried Haberler did, in 1936. Economist
Fritz Machlup already had. He fled in 1933. Well, not
quite. He was in the United States in 1933, and he decided
not to return to Austria. Both men found safe havens in the
United States. So did Mises in 1940, when he left
Switzerland, barely escaping German troops in France as he
and his wife road a bus toward Spain, and from there to
Portugal and the United States.
One might have thoughy that a careful reading of "Mein
Kampf" (1926) would have been a sufficient trigger point in
the Summer of 1933. The gun was loaded. Then the hammer was
cocked in March: the Enabling Act.
Laws enacted by the Reich government shall be
issued by the Chancellor and announced in the
Reich Gazette. They shall take effect on the day
following the announcement, unless they prescribe
a different date. Articles 68 to 77 of the
Constitution do not apply to laws enacted by the
Reich government.
Articles 68 to 77 stipulated the procedures for
enacting legislation in the Reichstag. "So what?" This
seems to have been a mere technicality. The language was so
procedural. But there was substance to it. As we read on
Wiki, "The Enabling Act allowed the cabinet to enact
legislation, including laws deviating from or altering the
constitution, without the consent of the Reichstag."
http://en.wikipedia.org/wiki/Enabling_Act_of_1933
It was time to move out and move on . . . and not just
if you were Jewish.
Some people see the signs. Others do not. Some decide
to get out while the getting is good. Others do not.
Incident by incident, trigger point by trigger point,
people see signs. Most people ignore them. "It can't happen
here." Most times it doesn't. Sometimes it does.
TRIGGERS AND SAFETIES
On April 5, 1933, President Franklin Roosevelt, in
office for one month, signed Executive Order 6102.
Executive Order 6102 required U.S. citizens to
deliver on or before May 1, 1933, all but a small
amount of gold coin, gold bullion, and gold
certificates owned by them to the Federal
Reserve, in exchange for $20.67 per troy ounce.
Under the Trading With the Enemy Act of October
6, 1917, as amended on March 9, 1933, violation
of the order was punishable by fine up to $10,000
($167,700 if adjusted for inflation as of 2010)
or up to ten years in prison, or both.
http://en.wikipedia.org/wiki/Executive_Order_6102
There was no public outcry. There was no sense of
loss. Violation of gold contracts, which had been legal
ever since 1879, had taken place, but few people cared.
That was a trigger point. There were many others. The
journalist Garet Garrett wrote of the New Deal in 1938,
"the revolution was." It was, in his words, a revolution
within the form.
There are those who still think they are
holding the pass against a revolution that may be
coming up the road. But they are gazing in the
wrong direction. The revolution is behind them.
It went by in the Night of Depression, singing
songs to freedom.
There are those who have never ceased to say
very earnestly, "Something is going to happen to
the American form of government if we don't watch
out." These were the innocent disarmers. Their
trust was in words. They had forgotten their
Aristotle. More than 2,000 years ago he wrote of
what can happen within the form, when "one thing
takes the place of another, so that the ancient
laws will remain, while the power will be in the
hands of those who have brought about revolution
in the state."
http://mises.org/books/pottage.pdf
That revolution avoided identifying the trigger points
for what they were. So did most Americans.
Another monetary trigger point was Nixon's unilateral
decision on August 15, 1971, to cancel all gold contracts
with foreign central banks to pay an ounce of gold for $35.
Again, there was no sense of outrage.
Along with that declaration, he froze wages and
prices. There was widespread cheering in the business
elite. That was a popular decision. The resulting
shortages, losses due to production bottlenecks, and long
lines in front of gasoline stations were not blamed on the
controls, at least not by the average voter.
Over the next decade, the United States suffered the
worst price inflation in its peacetime history. Gold went
from $35 an ounce in 1971 to over $800 an ounce in January
1980, falling only because Paul Volcker's Federal Reserve
policy of tighter money (1979-82) reversed the inflationary
panic.
Nixon's decision was a pair of trigger points, both
having to do with the violation of contracts.
There were counter-indications: safeties, to stick
with the analogy of triggers. The main ones were the
reduction in top marginal income tax brackets, first by
Kennedy and then by Reagan. Under Carter, price floors
imposed by Federal regulatory agencies were reduced or
eliminated. In transportation these changes produced rapid
economic growth and innovation, along with price cutting. A
decade earlier, the Federal Communications Commission's
Carterfone decision began to break the back of AT&T's
monopoly, which led to enormous innovation in
telecommunications.
The passage of the Patriot Act of 2001 was a blow to
liberty. The development of the Internet since 1995 has
been a much greater advancement of liberty.
TWO STEPS FORWARD, ONE STEP BACK
To shift the analogy, we are now in a "two steps
forward, one step back" scenario. I think we have been
since the end of the Vietnam War. The defeat of the United
States was visible. The government has subsequently sought
to reclaim the old trust, but it has failed to do so. The
public accepts inconclusive, drawn-out wars in the Middle
East only because it has no commitment to victory. Voters
assume that there will be no victory. This is not the basis
of strong political commitment. This is not the basis of
that crucial form of political capital: legitimacy.
The public's support of the Federal government has
been reduced to the Valley Girl's shrug: "Whatever." As
long as the public gets access to its entertainment and
does not suffer immediate pain, it ignores the Federal
government. Bureaucrats prosper, but the tax resistance is
strong and deep. The Federal government has been unable to
collect taxes in excess of 20% of GDP since 1946, and it
has never collected more than 23%, during World War II. The
pubic loves increased spending, but only if it is borrowed.
So, lots of money is borrowed by the Treasury. That
borrowing is now facing resistance. The Federal Reserve is
creating money to buy the deficit. China isn't. Japan
isn't. PIMCO isn't. Interest rates are low because only the
Federal government is borrowing heavily.
The Federal debt climbs relentlessly. The public does
not care enough to accept cuts in spending, but it will not
tolerate actual revenue increases. The debate over the
deficit is gridlocked. That means more debt. It also means
default. Today's "no pain, big deficit" will become "big
pain, big default." The only question is this: By what
arrangement? Hyperinflation? Outright default? Piecemeal
default?
BROKEN WINDOWS, BROKEN BUDGET
In Frederic Bastiat's story of the broken window, the
public sees spending as a way to get the economy going. The
broken window produces economic growth. The story points to
the truth: it takes resources to repair windows. That is
the thing not seen. The lesson: look for the thing not
seen.
The thing not seen today is the cost of communication.
Digits keep getting cheaper. Ideas spread far faster.
Networks are created by the millions. The government is in
control of none of this.
The more oranges in the air, the harder the juggler's
routine. This is the dilemma of every government on earth.
The real economy is growing because of cost-cutting and
innovation. The government wants to control this process,
but it can't.
On all sides, the politicians are besieged. They
cannot balance the budget. They have no intention of doing
so. Yet their failure places them on the dole. Ben Bernanke
is like some modern day J. P. Morgan, providing money in a
crisis, the way Morgan did (briefly) in 1907. But what will
happen when QE2 ceases? If the private sector wants to fund
the Federal government, capital will shift to Washington,
where it will be consumed.
The Federal government still parades as the ultimate
source of bailouts, the safety net of the nation. But with
whose money? Not the taxpayers' money. They won't pay. They
have kept Federal revenues below 20% of GDP for two
generations.
The Navy sends its dozen carriers to sweep the oceans,
but it can't catch land-based guerillas. Without boots on
the ground, there is no way for the military to impose its
will. The fiscal bloodletting required to fund the deployed
troops is huge. The Taliban is not losing. Iran is not
losing. It is not clear that Qadaffi is losing. Where are
we winning? "Wherever," says the Valley Girl.
The budget is the visible symbol of political
futility. There is no resolution. The Democrats' version
of the irresistible force is Medicare. The Republicans'
version of the immovable object is tax resistance. The
solution, so far, has been QE2. But it is scheduled to end
on June 30th.
Stalemate internationally is defeat. We will
eventually run out of money and patience. Stalemate
domestically is defeat. We will eventually run out of
money and patience.
The government is fixing broken windows. Every time
one gets fixed, two more get broken. Think of North Africa.
Think of Pakistan and Afghanistan. Think of the deficit.
Think of unemployment.
Crystal Night in 1938 was deliberate. It was not
metaphorical. But it was surely symbolic. We are watching
the economic equivalent of crystal night. The windows keep
breaking. The policies of fixing the broken glass seem to
lead to more broken glass. The new windows must be paid
for. By whom? For how long? At what rate of interest?
"WE TOLD YOU SO"
At some point, there will be too much broken glass for
the government to conduct business as usual. Interest rates
will rise. Prices will rise. Output will slow. Unemployment
will rise.
When politics shifts to establishing blame for visible
failures, the FCC-licensed airwaves and shrinking print
media will be filled with versions of "We told you so." The
Establishment will have its explanation, which will be Paul
Krugman's "the Federal government should have spent more."
On that defense, the Keynesian Establishment will bet the
farm.
In contrast will be the Internet, which will offer
multiple networks of blame-shifting. But there will be a
common theme: "Tax somebody else." Blame will be handed out
to many deserving candidates, but the common theme will be
this: "They bailed out their cronies."
The future of American politics will be settled by the
winning faction in the blame-shifting enterprise. But the
winners will have to be able to back it up with this: "We
told you so."
The economic gurus of the future will have to do the
same.
So will the hedge funds and portfolio managers.
To survive the coming fiscal cataclysm, one must be
vocal now. One must also put his money where his mouth is.
And he had better keep more of his money than the
competition.
CONCLUSION
Modern men know little history. Few people today know
the central issue of World War II. The World War I
settlement allowed Germany access to the free city of
Danzig, a port city. Beck, the Polish Foreign Minister,
refused to grant this access in 1939. So, Germany invaded
Poland. So did the Soviet Union three weeks later.
Jews caught in the west got trapped by the German
Army. Those in the east were trapped by the Soviet Army.
Germany's invasion of the USSR in June 1941 sealed the fate
of Jews in Poland.
Poles paid little attention to German politics in the
1930s. Jews in Poland were not concerned with these details
until 1939. By then it was too late. They were victims who
had no warning.
This is always the fate of those caught in a crossfire.
The average citizen has no real understanding of the
underlying causes of booms and busts. He trusts the
government. He thinks that those in charge know what they
are doing. Yet the evidence indicates otherwise.
There will be victims. The Great Default will affect
millions of people who do not understand that they are at
risk or why.
I suggest that you mentally identify some trigger
points as indicators. When they are set off, one by one,
increase your commitment to finding and funding a port in
the coming storm. Think "Tuscaloosa." Think "Joplin."
I hear sirens.
------------------------------------------------------
The Daily Reckoning is a free, daily e-mail service
brought to you by the authors of the NY Times Business
Bestseller "Financial Reckoning Day", "Demise Of Dollar",
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When would a wise Jew have begun making plans to leave
Germany? 1933? 1934? 1938? 1939?
In retrospect, most people would say 1933, the year
Hitler was appointed (not elected) Chancellor by President
von Hindenburg. On 30 January, Hitler became Chancellor. He
asked Hindenburg to dissolve the government and schedule
new elections for March 5, which Hindenburg did.
Should a Jew have begun packing his bags? Maybe not.
Maybe after the next election, the Nazis would have been
defeated.
On 27 February, the Reichstag building burned down.
One man did it, who admitted he had done it. Hitler
immediately identified him as a Communist, although even
today, it is not clear that he did anything but act alone.
Hitler used this as a propaganda tool. On March 5, the
Nazis got 44% of the popular vote, up from 33%. With an
allied party, they had 52% of the vote in the Reichstag.
Was it time to pack the bags? Maybe not. The Nazis did
not have a majority. They had only a coalition majority.
On March 23, the government passed the Enabling Act.
It took a two-thirds vote to do this. Hitler now possessed
dictatorial powers. He had attained these by means of
support by rival political parties.
http://en.wikipedia.org/wiki/Reichstag_fire
Was it time to pack the bags? Maybe not. Those powers
might not be used.
On April 1, a one-day boycott of Jewish businesses was
staged by the S.A., which were technically private storm
troops. Was it time to pack those bags. Maybe not. This was
not government-directed. It was only symbolic.
What about 1935's Nuremberg Laws on Citizenship and
Race? They made it illegal for Jews to be citizens. But
that was only politics. How many votes did Jews have,
anyway? They were only 1% to 2% of the population. Politics
isn't everything.
And so on, right down to Crystal Night in November
1938, when rioters broke the plate glass windows of 7,500
Jewish-owned businesses and burned or damaged 200
synagogues, meaning most synagogues in Germany.
After that, over 100,000 Jews packed their bags and
departed. Between 1933 and 1939, about half the Jews in
Germany emigrated: 250,000. But half did not.
There were a series of trigger points, 1933 to 1939.
Most Jews sat tight until very late.
Yet in Austria, Ludwig von Mises saw the handwriting
on the wall in 1934. He looked at the map. He concluded
that the Nazis would wind up running Austria. Hitler was an
Austrian, and he would want to control Austria. He packed
his bags and took his first salaried teaching position, a
job in Geneva, Switzerland. He warned Jewish friends to get
out. Economist Gottfried Haberler did, in 1936. Economist
Fritz Machlup already had. He fled in 1933. Well, not
quite. He was in the United States in 1933, and he decided
not to return to Austria. Both men found safe havens in the
United States. So did Mises in 1940, when he left
Switzerland, barely escaping German troops in France as he
and his wife road a bus toward Spain, and from there to
Portugal and the United States.
One might have thoughy that a careful reading of "Mein
Kampf" (1926) would have been a sufficient trigger point in
the Summer of 1933. The gun was loaded. Then the hammer was
cocked in March: the Enabling Act.
Laws enacted by the Reich government shall be
issued by the Chancellor and announced in the
Reich Gazette. They shall take effect on the day
following the announcement, unless they prescribe
a different date. Articles 68 to 77 of the
Constitution do not apply to laws enacted by the
Reich government.
Articles 68 to 77 stipulated the procedures for
enacting legislation in the Reichstag. "So what?" This
seems to have been a mere technicality. The language was so
procedural. But there was substance to it. As we read on
Wiki, "The Enabling Act allowed the cabinet to enact
legislation, including laws deviating from or altering the
constitution, without the consent of the Reichstag."
http://en.wikipedia.org/wiki/Enabling_Act_of_1933
It was time to move out and move on . . . and not just
if you were Jewish.
Some people see the signs. Others do not. Some decide
to get out while the getting is good. Others do not.
Incident by incident, trigger point by trigger point,
people see signs. Most people ignore them. "It can't happen
here." Most times it doesn't. Sometimes it does.
TRIGGERS AND SAFETIES
On April 5, 1933, President Franklin Roosevelt, in
office for one month, signed Executive Order 6102.
Executive Order 6102 required U.S. citizens to
deliver on or before May 1, 1933, all but a small
amount of gold coin, gold bullion, and gold
certificates owned by them to the Federal
Reserve, in exchange for $20.67 per troy ounce.
Under the Trading With the Enemy Act of October
6, 1917, as amended on March 9, 1933, violation
of the order was punishable by fine up to $10,000
($167,700 if adjusted for inflation as of 2010)
or up to ten years in prison, or both.
http://en.wikipedia.org/wiki/Executive_Order_6102
There was no public outcry. There was no sense of
loss. Violation of gold contracts, which had been legal
ever since 1879, had taken place, but few people cared.
That was a trigger point. There were many others. The
journalist Garet Garrett wrote of the New Deal in 1938,
"the revolution was." It was, in his words, a revolution
within the form.
There are those who still think they are
holding the pass against a revolution that may be
coming up the road. But they are gazing in the
wrong direction. The revolution is behind them.
It went by in the Night of Depression, singing
songs to freedom.
There are those who have never ceased to say
very earnestly, "Something is going to happen to
the American form of government if we don't watch
out." These were the innocent disarmers. Their
trust was in words. They had forgotten their
Aristotle. More than 2,000 years ago he wrote of
what can happen within the form, when "one thing
takes the place of another, so that the ancient
laws will remain, while the power will be in the
hands of those who have brought about revolution
in the state."
http://mises.org/books/pottage.pdf
That revolution avoided identifying the trigger points
for what they were. So did most Americans.
Another monetary trigger point was Nixon's unilateral
decision on August 15, 1971, to cancel all gold contracts
with foreign central banks to pay an ounce of gold for $35.
Again, there was no sense of outrage.
Along with that declaration, he froze wages and
prices. There was widespread cheering in the business
elite. That was a popular decision. The resulting
shortages, losses due to production bottlenecks, and long
lines in front of gasoline stations were not blamed on the
controls, at least not by the average voter.
Over the next decade, the United States suffered the
worst price inflation in its peacetime history. Gold went
from $35 an ounce in 1971 to over $800 an ounce in January
1980, falling only because Paul Volcker's Federal Reserve
policy of tighter money (1979-82) reversed the inflationary
panic.
Nixon's decision was a pair of trigger points, both
having to do with the violation of contracts.
There were counter-indications: safeties, to stick
with the analogy of triggers. The main ones were the
reduction in top marginal income tax brackets, first by
Kennedy and then by Reagan. Under Carter, price floors
imposed by Federal regulatory agencies were reduced or
eliminated. In transportation these changes produced rapid
economic growth and innovation, along with price cutting. A
decade earlier, the Federal Communications Commission's
Carterfone decision began to break the back of AT&T's
monopoly, which led to enormous innovation in
telecommunications.
The passage of the Patriot Act of 2001 was a blow to
liberty. The development of the Internet since 1995 has
been a much greater advancement of liberty.
TWO STEPS FORWARD, ONE STEP BACK
To shift the analogy, we are now in a "two steps
forward, one step back" scenario. I think we have been
since the end of the Vietnam War. The defeat of the United
States was visible. The government has subsequently sought
to reclaim the old trust, but it has failed to do so. The
public accepts inconclusive, drawn-out wars in the Middle
East only because it has no commitment to victory. Voters
assume that there will be no victory. This is not the basis
of strong political commitment. This is not the basis of
that crucial form of political capital: legitimacy.
The public's support of the Federal government has
been reduced to the Valley Girl's shrug: "Whatever." As
long as the public gets access to its entertainment and
does not suffer immediate pain, it ignores the Federal
government. Bureaucrats prosper, but the tax resistance is
strong and deep. The Federal government has been unable to
collect taxes in excess of 20% of GDP since 1946, and it
has never collected more than 23%, during World War II. The
pubic loves increased spending, but only if it is borrowed.
So, lots of money is borrowed by the Treasury. That
borrowing is now facing resistance. The Federal Reserve is
creating money to buy the deficit. China isn't. Japan
isn't. PIMCO isn't. Interest rates are low because only the
Federal government is borrowing heavily.
The Federal debt climbs relentlessly. The public does
not care enough to accept cuts in spending, but it will not
tolerate actual revenue increases. The debate over the
deficit is gridlocked. That means more debt. It also means
default. Today's "no pain, big deficit" will become "big
pain, big default." The only question is this: By what
arrangement? Hyperinflation? Outright default? Piecemeal
default?
BROKEN WINDOWS, BROKEN BUDGET
In Frederic Bastiat's story of the broken window, the
public sees spending as a way to get the economy going. The
broken window produces economic growth. The story points to
the truth: it takes resources to repair windows. That is
the thing not seen. The lesson: look for the thing not
seen.
The thing not seen today is the cost of communication.
Digits keep getting cheaper. Ideas spread far faster.
Networks are created by the millions. The government is in
control of none of this.
The more oranges in the air, the harder the juggler's
routine. This is the dilemma of every government on earth.
The real economy is growing because of cost-cutting and
innovation. The government wants to control this process,
but it can't.
On all sides, the politicians are besieged. They
cannot balance the budget. They have no intention of doing
so. Yet their failure places them on the dole. Ben Bernanke
is like some modern day J. P. Morgan, providing money in a
crisis, the way Morgan did (briefly) in 1907. But what will
happen when QE2 ceases? If the private sector wants to fund
the Federal government, capital will shift to Washington,
where it will be consumed.
The Federal government still parades as the ultimate
source of bailouts, the safety net of the nation. But with
whose money? Not the taxpayers' money. They won't pay. They
have kept Federal revenues below 20% of GDP for two
generations.
The Navy sends its dozen carriers to sweep the oceans,
but it can't catch land-based guerillas. Without boots on
the ground, there is no way for the military to impose its
will. The fiscal bloodletting required to fund the deployed
troops is huge. The Taliban is not losing. Iran is not
losing. It is not clear that Qadaffi is losing. Where are
we winning? "Wherever," says the Valley Girl.
The budget is the visible symbol of political
futility. There is no resolution. The Democrats' version
of the irresistible force is Medicare. The Republicans'
version of the immovable object is tax resistance. The
solution, so far, has been QE2. But it is scheduled to end
on June 30th.
Stalemate internationally is defeat. We will
eventually run out of money and patience. Stalemate
domestically is defeat. We will eventually run out of
money and patience.
The government is fixing broken windows. Every time
one gets fixed, two more get broken. Think of North Africa.
Think of Pakistan and Afghanistan. Think of the deficit.
Think of unemployment.
Crystal Night in 1938 was deliberate. It was not
metaphorical. But it was surely symbolic. We are watching
the economic equivalent of crystal night. The windows keep
breaking. The policies of fixing the broken glass seem to
lead to more broken glass. The new windows must be paid
for. By whom? For how long? At what rate of interest?
"WE TOLD YOU SO"
At some point, there will be too much broken glass for
the government to conduct business as usual. Interest rates
will rise. Prices will rise. Output will slow. Unemployment
will rise.
When politics shifts to establishing blame for visible
failures, the FCC-licensed airwaves and shrinking print
media will be filled with versions of "We told you so." The
Establishment will have its explanation, which will be Paul
Krugman's "the Federal government should have spent more."
On that defense, the Keynesian Establishment will bet the
farm.
In contrast will be the Internet, which will offer
multiple networks of blame-shifting. But there will be a
common theme: "Tax somebody else." Blame will be handed out
to many deserving candidates, but the common theme will be
this: "They bailed out their cronies."
The future of American politics will be settled by the
winning faction in the blame-shifting enterprise. But the
winners will have to be able to back it up with this: "We
told you so."
The economic gurus of the future will have to do the
same.
So will the hedge funds and portfolio managers.
To survive the coming fiscal cataclysm, one must be
vocal now. One must also put his money where his mouth is.
And he had better keep more of his money than the
competition.
CONCLUSION
Modern men know little history. Few people today know
the central issue of World War II. The World War I
settlement allowed Germany access to the free city of
Danzig, a port city. Beck, the Polish Foreign Minister,
refused to grant this access in 1939. So, Germany invaded
Poland. So did the Soviet Union three weeks later.
Jews caught in the west got trapped by the German
Army. Those in the east were trapped by the Soviet Army.
Germany's invasion of the USSR in June 1941 sealed the fate
of Jews in Poland.
Poles paid little attention to German politics in the
1930s. Jews in Poland were not concerned with these details
until 1939. By then it was too late. They were victims who
had no warning.
This is always the fate of those caught in a crossfire.
The average citizen has no real understanding of the
underlying causes of booms and busts. He trusts the
government. He thinks that those in charge know what they
are doing. Yet the evidence indicates otherwise.
There will be victims. The Great Default will affect
millions of people who do not understand that they are at
risk or why.
I suggest that you mentally identify some trigger
points as indicators. When they are set off, one by one,
increase your commitment to finding and funding a port in
the coming storm. Think "Tuscaloosa." Think "Joplin."
I hear sirens.
------------------------------------------------------
The Daily Reckoning is a free, daily e-mail service
brought to you by the authors of the NY Times Business
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