Will Anybody Watch the Watchmen?

CNN just published an interesting piece called "Will Anyone Watch the Watchmen?". You can read it here.

There are two potential answers to this question:

1. Not if they're smart
2. They will but they know it isn't going to be good. They are just doing it to be part of the social conversation that will rise out of this film.

So, I was an avid comic book reader when I was a kid, as was my younger brother. Between the two of us, we have about 10,000 books in storage. Although he was still actively reading in 1985, I was not. Neither of us read this graphic novel until just recently. Both of us had similar thoughts about this book. They go like this:

1. Vastly, vastly, vastly over-rated
2. Fucking stupid costumes.
3. Fucking stupid character names.
4. Fucking weak super heroes
   
5. The emphasis on personal depth and psychology is highly strained. It is not worth the number points critics assign for this material
6. Totally a product of Cold War fear of Nuclear War.
   
7. Mostly a false prophecy of the Left during the Reagan era.

On New Years Eve, 1985-1986, I attended a big thrash metal bash in San Francisco. Metallica, Megadeth, Metal Church and Exodus were all playing the Civic Auditorium. It was a blast. The concert didn't end until 1 or 2 in the morning. It was 1986 by then. As I walked to the Bart station to ride home to Concord, I spied a funny bumper sticker on a crappy Volkswagon Bug. The sticker said "Reagan '84, Nuclear War '85". I laughed like hell. By that time, the sticker was officially a false prophecy. It was typical of the hysterical San Francisco hippies of the time.

Well folks, The Watchmen is a bumper sticker just like that. It is basically a prophecy of atomic doom, and a bitter polemic written against Ronald Reagan. The objective of the book was to stir up pasificism in hearts of comic book readers like me, who voted for Reagan. It failed. It strikes me as hillarious that they have chosen to make this movie around an out-dated political rant, 21 years post-Reagan and 20 years post Cold War. I have no idea in the world how they can make this cold-war hysteria relevant today.

One wag said "Easy, just substitute Bush II for Reagan and you've got it!" Ehhh... When the movie opens a few weeks Obama will have been president for a couple of months, so you don't got it. I guess the hysterical hippies don't keep track of current events too closely.

Worse, I have never seen such preposterous implementations of already horrid costumes in all my life. The character design in this graphic novel was downright horrid. The movie guys have decided to revel in it. They think it is fun. When I saw the production notebook film, cold shivers ran through my spine. I saw visions of hundreds of millions of dollars, burning in a bond fire, during a time of economic crisis, when major studios can go bankrupt. That wouldn't be good for my town of Los Angeles.

Not since the 1960s Batman staring Adam West have I seen such cheese. That Batman was very successful, albeit a guilty pleasure for most. That one succeed because it was extremely camp. Everybody was hamming it up, and playing it tongue in cheeck. It worked because it was comedy, and the people took it that way. Unfortunately, Watchmen is being made as a serious graphic novel should be. They have delusions of greatness, seriousness, psychological depth, and political importance. This toxic mixture of stupid character design and serious themes just can't work in movie. There are reasons why so many considered this graphic novel un-filmable, and a non-movie candidate.

I want to go on the record clearly here: Watchmen is destined to be one of the biggest motion picture catastrophes in Hollywood history. I am talking about a disasterpiece of cinema. It is going to fail. It will live in infamy. In a certain sense, this movie is already a failure. Warner Bros footed the bill for this film, and wound up in a legal squabble with Fox, who now owns the rights to distribute it. This is a legal train wreck has already spoiled any potential profits that might come from this film.

The best outcome that Mr. Snyder, Fox & Warners can hope for is something like King Kong 2005. That King Kong made a lot of money, as all other King Kongs have, despite the fact that it was long and borring. It was profitable, and it more or less sunk Mr. Peter Jackson's career. Anybody noted that he hasn't been seen or heard from again? I know there are rumors of him producing several films. But he has been inactive for almost 5 years. The movie is not remembered well. Have a look at this as just one example. Rumor has it that Mr. Jackson has been sulking over the poor reception of his pet project.

I hope Zach Snyder does not do the same after Watchmen tanks. He made a truly classic film in 300. I would like to see more from him

If Watchmen turns out well, I will eat my words, but I fear not.

So if I was Responsible for Rebuilding the Detroit Lions, What Would I do?

This morning, the NFL network was replaying portions of the NFL combine, which is now history. A very interesting question got raised during the segment I watched: If you were the GM responsible for rebuilding the Detroit Lions, what would you do? Do you take Matthew Stafford, as they are expected to do? Do you go in a different direction?

First, let's admit one thing: The roster is currently a disaster. They have exactly one piece of championship material on the roster. That is Charles Johnson. Everybody else is meat for the grinder. As the panel of experts observed, the team can draft at any and all positions and make improvements. I concur, but I wouldn't do another wide receiver right now.

Mike Mayock is probably correct when he says that Detroit will follow the Atlanta model for rebuilding. This means drafting a QB high and an offensive lineman lower. This is one of the key reasons Atlanta turned it around last year. Michael Turner also had a lot to do with it. I believe Mayock called it right. Detroit will follow this model. Whether it is right or wrong for Detroit's situation is immaterial. It is a copycat league. People emulate success and anti-emulate failure. Atlanta and Miami showed us how to get out of a jam quickly last year. Most people believe Miami got lucky scoring Chad Pennington at the last second... and let's not mention Tom Brady's knee injury. For this reason Atlanta is viewed as the better model.

What would I do? I wouldn't draft a quarterback this year. Detroit is not Atlanta. They have not been to the playoffs in a decade. Atlanta had been to playoffs several times this decade. Detroit in 2009 is far more poor in terms of roster talent than Atlanta in 2008. We are looking at 3 hard years of austerity and loss before things turn around. With that in mind, I am going to avoid the thin crop of quarterbacks in 2009 and wait for the bumper crop in 2010. I going to exploit the rich crop of offensive linemen in 2009, taking three or four of them. I am going to have a talent rich sophomore offensive line {and Charles Johnson} ready in 2010 when I draft a QB from the bumper crop. The table will be set. Tim Tebow will be comfortable when we take him.

Remember, the Lions are very likely to have a poor loosing record in 2009. We're talking about 3 to 6 wins, depending upon the breaks. Tim Tebow is probably not going to be the #1 ranked QB in 2010. Some foolish idiots question whether he will make it as QB in the NFL. They questioned Dan Marino also. Tebow will be around when the Lions draft. He is obtainable. He has the talent and the mentality that the Lions require to turn the ship around. He will be the next Bobby Layne in Detroit, if the organization is smart enough to select him.

So who should the Lion's select?
------------------------------------------
1. #1 overall Jason Smith LOT Baylor
1. #20 overall Andre Smith LOT Alabama
2. #33 overall Eric Wood C Louisville

After this, they can do as they please. Basically, with two guys named Smith and one guy named Wood, they would lay in the foundation of an all-pro offensive line.

Do you really think they can get Jason Smith and Andre Smith in the same draft? Yep, I do. The market for Andre has gone cold in the aftermath of his no show. He has many problems. A lot of offensive linemen impressed the scouts this year. It is a bumper crop. Left tack is a thick position this year. They aren't scarce this time. The no-show at the combine is going to hurt him, especially when Jason Smith and Eugene Monroe lit it up. Andre Smith may very well be hanging around at #20 when the Lions select again.

I like the notion of lining all three of them up on the same side. Slot Jason at the LOT. Slot Andre at the LOG. Slot Eric Wood at the Center. That could be the best young left side since the Raiders had Shell, Upshaw and Dalby together in the Early 1970s. That offensive line won some Super Bowls for the Raiders. Jim Plunket really apreciated having those guys around.

About Andre Smith, and the Rams' #2 pick overall

So the NFL combine got underway in ernest last Thursday. Conspicuous by his absense was the Left Tackle of the Alabama Crimson Tide, Andre Smith. He pulled a no-show. They called his name inside Lucas Oil Stadium in Indianapolis... several times... over the bullhorn... and the PA... They got no response. Later, Smith made contact with several folks associated with the combine and NFL network. He simply said he was not in shape for the combine and was not going to participate.

He blew it big time. It should be noted that the NFL combine is now 28 years old. The first one was held in 1981. Since that time, only 4 men have been drafted in the first round who did not test at the combine. How many men have been drafted in the 1st round since that time 28 to 32 times 28? For the sake of simplicity lets call the number 812. If we take this figure at face value Andre Smith now has a 0.4% chance of being drafted in the first round. How many of those 4 guys just pulled a hardcore no-show? I can't answer that question. I don't know.

Let's make one thing clear: Smith will still be a 1st round draft pick, but he is going to drop down the bord. I think he is likely to be the 5th man selected in the first round who pulled a no-show. However, he's looking at a slot below #10, perhaps the 16th or 17th pick overall. Believe it or not, there is a big difference #2 and #17; Several million dollars worth of difference. So Andre just lost a couple of million bucks.

Much to my dismay, Smith was on course to be the #2 pick overall in the entire draft. My Rams were planning to take him. I don't know why, but I just never had a good feeling about this kid. Not to worry, according to Jamie Dukes, the Rams are not going to be drafting Andre Smith. It sounded to me like he had hard information. Maybe he talked with Spagnolo, who is at the combine. It should be noted that Dukes is one of the finest commentators on the NFL network, and he is a former Offensive Lineman from the Falcons. Dukes was quite plain about the fact that Andre Smith just blew the biggest job interview of his life. Mike Mayock, the best NFL talent scout period, totally agreed with him.

Incidentally, Mike Mayock finally issued his verdict on Smith. Mayock says Smith is the 16th most tallented player, and the #3 ranked tackle in this years draft. I was nodding my head in approval when I heard Mayock say this. I had a similar notion, although I would rank him a little lower. Mayock was keeping his mouth shut until after the combine. He wanted to give Smith the benefit of the doubt. If Smith had a great workout, Mayock would have upped his ranking. Smith pulled a no-show, so Mayock let it rip. Let this be a lesson to you little kiddies out there: Not everybody believes you are predestined to be the best of the best. Some people have doubts about you. The NFL Scoutting combine is your last chance to convice the doubters. You should take advantage.

Mayock's statement would tend to indicate that this is a draft rich in tackles. Thank God for my Rams.

There were many guys who impressed me during the combine drills. Chief among them were two guys: Terrance Taylor of Michigan and Eric Wood of Louisville. Taylor was the only guy to impress me in the Bench Press, and he is clearly built like Mecha Godzilla. He is highly reminicant of Larry Allen, the former all pro of the Dallas Cowboys and the 49ers. Taylor is short defensive tackle at 6'0", but he would make an excellent nose guard. Best of all, he is going to be cheap. I would take Taylor in heart beat. Eric Wood will probably be around at the top of the second round, when the Rams draft #34. I would take him there. So the question is this: What do we do with the #2 pick in the draft? I still say trade it to the Giants, but if we must use the pick, get Eugene Monroe of Virgina. This is the guy who used to block Chris Long during college practice. Let's get those two back together again.

What about more Offensive Linemen? Two won't get it done. How about Garret Reynolds of North Carolina? He's the Nephew of Tennesse Linebacker Jack Hacksaw Reynolds who was our guy back in the late 70's. Jack was our middle linebacker in Super Bowl XIV against the Steelers. He went on to play for the 49ers in Super Bowl XVI and XVIII.

Another guy I want to draft is Alex Mack of UC Berkeley. Mack made a similar mistake to Andre Smith by skipping the Combine, however, he did give early notice. First round centers are scarce these days. First round centers who skip the combine? Forget it. He will be around at the bottom of the second or top of the 3rd. If I get a crack at him I'll take him.

Ain't Nobody Gonna Say Hooray for Hollywood this year.

The Motion Picture Academy has completely lost touch with the sensibilities of the common man, and they have become totally locked away in a pseudo-artistic Ivory Tower. The is a dangerous cleavage (and I am not talking about the fake tits on the red carpet) which is damaging the so-called Female Super Bowl. The Oscar broadcast is often called the Female Super Bowl because--at least in times past--the ratings were gianormous and the price of advertising during the broadcast was ungodly.

Now I am looking at the list of highly nominated films, and I see the weakest field I have ever seen. Hardly an entertaining or memorable movie in the lot of them. This field sucks.

This former institution is diminishing rapidly, and it is all because of one thing: The Academy has gotten locked in an artistic ivory tower, and they have lost touch with the people. So why is this true?

• One Oscar boss observed "This ain't the people's choice awards." He is certainly right about that... and it's not a good thing.
  
• There is now a describable type of film that can be nominated for and win an Oscar. These films are usually off-beat and on bizarre subjects. Frequently, they challenge common morality. The are loosely typed as "Prestige Pictures".
• Prestige Pictures suck: They are almost never entertaining. They usually don't make money. Rubbish like American Beauty, The English Patient, Million Dollar Baby and Crash are already well forgotten. I never liked any of these films in the first place, and I would not have voted for them.
  
• The big studios aren't supporting prestige pictures anymore: The hardened pragmatist inside the 5 major studios wonders why the firm wastes big money on movies that win Oscar gold but don't entertain or make money. They aren't even remembered well in retrospect. The result is that movies like The Wrestler, and Milk have been put out in extremely limited release. The studios know full well that these movies won't make money, even if they win the gold. The consequence is that very few people have seen these highly nominated films, and very few ever will.
  
• You can't predict victory: Odd ball movies frequently walk off with the title. How about last year's winner No Country for Old Men? That was an odd victory. A studio in financial trouble like Paramount may intentionally engineer a film like Benjamin Button with the objective of winning Oscar gold, but this is no recipe for making money or getting out of financial trouble. Further, Paramount is not guaranteed to win an Oscar this weekend. It could well be Slumdog Millionaire.
  
• When you nominate Milk instead of Wall-e, you have committed both an artistic and a marketing blunder. Milk has less than 2% of the artistic merit of Wall-e, and it has 1.0e-23% of it's long-term commercial value in terms of residual income. Wall-e will be popular for the next 50 to 75 years. Milk will be totally forgotten in the next 2 or 3 weeks.
• On the 2/20/2009 edition of All Things Considered, NPR's evening news broadcast, film critic Bob Mudello openly declared that if the Academy wants to reverse the negative slide in Oscar ratings, they are going to have to start nominating movies like Wall-e and the Dark Knight. You can listen to that audio HERE. Nominating these films would drastically increase the number of people who had seen one of the nominated films, and give the people a sense that they have a dog in this fight to cheer for.
• Speaking of not seeing any of the Oscar nominated films. MarketWatch.com printed a very nice piece in which they showed that the films nominated for Best Picture have the lowest combined box office total in the 81 year history of the Oscars. This is the pure effect Ivory Tower made manifest in dollars and cents. People don't like the shit that has been nominated. They won't pay money to see it, regardless of what the critics and the Academy says. You can read that story HERE.
  

So what have we learned?

1. Prestige pictures suck
2. The studios know it.
3. The people won't buy tickets for that crap.
4. The studios won't market that crap
5. The Academy nominates these crappy pseudo artistic, pseudo important, pseudo intelectual films and gives them the gold
6. Ergo the rating of the Female Super Bowl are sliding.
7. A lot of women are just going to watch for the fashion show.
   

New York is the new Detroit

New York is the new Detroit

New York is fucked to the gills and everybody knows it. New York is the new Detroit. Hard to believe now, but once upon a time, Detroit was the ultimate industrial power-house city on planet Earth. Then Jimmy Carter asked Volker to raise the prime to 20%, we had the Saturday Night massacre, the recession of 1980 came along, and Detroit basically died.

Funny how that thing worked out. In the environment of tough credit, high interest, austerity, and difficulty, Americans has to become intensely pragmatic. We couldn't afford to have and hold illusions anymore. We admitted something to ourselves we didn't want to confess: Japanese cars were way better. Car companies like AMC went out of business. Detroit became a burned out shell of what it once was.

They are saying that the Great Depression II will do the same thing to New York. New York was the ultimate center of global finance: the greatest financial powerhouse in the world. Now Bear Sterns, Lehman Bros, Merrill Lynch have all gone south. Groups like Goldman Sachs & Morgan Stanley have turned into conventional banks. Citigroup is about to be butchered and sold in pieces. AIG has been nationalized. {You guys are headquartered in New York.} New York is just not going to be the same place it once was.

You can make a very strong case that it was the Investment Banks that made New York New York. The rank-in-file millionaires who bought all those expensive condo apartments and bought all that opulence, those guys lined the trading floors at these investment banks. Now nobody is going to the Opera. Most of those guys are going to disappear.

The floor traders and licensed brokers are unemployed at the moment. Those who can retire will be headed for Costa Rica. They won't stay in New York. Those who can't retire will have to go to work in Charlot, Minneapolis or San Francisco for a small pittance of what they used to make. There will be an exodus of talent from New York to the other lesser financial centers around the country.

In fact, they already are disappearing. Many New Yorkers, accustomed to hyper-crowded, hyper-rush environments have noted a distinct change in intensity, velocity and mass on the street, in subways, and when fighting for cab. Rumor has it, you don't need to fight for a cab anymore. Everything is slowing down, and depopulating.

The result is that the GDP of New York is going to go down like crazy. The population of New York is going to go down. The per-capita GDP of New York is going to go down. It already has. Just ask yourself what would happen in Los Angeles if Paramount, Universal and Fox were to collapse. Believe me, Los Angeles would become a shell of its former self. New York can't survive the collapse of their most noteworthy industry.

There is another thing: New York fed on hyper-leverage more than any other place in the entire world. The cash that has been flowing into New York over the past 15 years has been a function of debt peonage, loosening standards for credit, and lax leverage controls. Basically, the powers that be allowed banks to lever up to 30 fold on deposits. New York ate up the interest and thrived... until the bubble burst. Now the era of hyper-leverage is over. When the economy comes back, it is going to be with heavy-duty steel-reinforced concrete blockades on leverage. Banks are never going to be allowed to leverage up like this again.

Without hyper-leverage to feed on, Wallstreet is going to have to find a more mundane, safe, less profitable and steady line of work. That means a lot less GDP for New York City.

Bye Bye Pioneer

The HDTV illuminati are disconsolate and drowning in tears. They are going to lay down and cry for a hundred years.

This week, we confirmed that Pioneer is exiting the HDTV business entirely. They aren't just dropping their famous Kuro Plasma line. They are getting out of the business of HDTVs. No Lasers. No LCDs. No DLPs. Nothing. Pioneer is out.

This brought howls of dismay from the HDTV critics, who have routinely showered Kuro with every award and superlative they could muster. The basic line goes like this “It is sad that customers won't pay for the superior quality of Pioneer. This shows that there is a race to the bottom as vendors try to cut cost in this era of economic crisis.”

Well, that is pretty nice bullshit, but bullshit none the less. Let me set the record straight: Pioneer isn't quiting because people are too stupid to recognize quality when they see it, or too cheap to pay for it when they see it. Nope. That ain't the reason at all. Pioneer got run out of the plasma market by Panasonic. Panasonic beat the hell out of them. Panasonic simply made bigger, cheaper and better looking plasma screens that Pioneer. I am talking about better image quality and better styling at the same time. Pioneer could not compete with Panasonic, and they knew it, so they quit.

As long as Panasonic is around, there simply is no reason for any rational consumer to spend $6000 on a 60 inch Kuro 151FD. You could have a 65 inch PZ850U for about $4500 instead. Plasma consumers opted for the latter in 2008. Pioneer was awash in red ink.

As I have said several times in this blog: The Kuro isn't what it is cracked up to be. It is a strong performer, but quite overrated. Certainly not the best HDTV money can buy. There was certainly a cult of Kuro during its existence, but having a cult following does not prove superiority. Plan 9 From Outer Space has a cult following. It is far from the greatest film ever made.

I don't know why, but experts get locked in an Ivory Tower echo chamber sometimes. They seem to be lemmings with herding instincts. Each year in the NFL draft, the critics get hot for some prospect who surely turns into a bust. They overlook good kids who turn into all-pros. Joe Montana was drafted in the 3rd round. Kurt Warner wasn't drafted at all. So it is with movies and so it is with HDTVs. Tim Couch and David Carr were both selected #1 overall. The NFL (regretably) showed these two to be failures. Likewise, the market has rendered its verdict on Pioneer's Kuro: Kuro is a non-viable product. This means the evaluators were wrong in their initial assessments.

Some perfectly marvelous HDTVs get mediocre reviews—or no coverage at all—just because there isn't strong mind share behind them. I don't believe HDTV critics have a real scientific methodology, despite their attempts to cloak reviews in the shroud of Science. Speaking of the Pseudo Science of HDTV reviews, let's debunk that bullshit right here and now.

There is a standard called ITU BT.709. It is sometimes mistakenly called Rec.709 by the TV critics. BT.709 is an International Telecommunications Union standard. This standard defines the pixel count, pixel depth, frame rates, and color space of HDTV. The standard can be found here. It is a digital electronics standard just like any other digital electronics standard. It was formed in the same way that all standards are formed.

Now, I happen to know something about digital electronics standards. I am a programmer with more than 14 years of professional experience and about 27 years of total experience. I have to deal with ANSI, ECMA and ISO all the fucking time. I know how these standards get formed. A number of experts are drawn from major industry firms. These experts are gathered together somewhere in the world for a conference. They are sequestered in a room once or twice. You usually have just two physical meetings. The rest of the time, the experts collaborate online for about a year or two. They vote many times by email or webform. In the end, they publish a massive document which few people ever read. This document defines the industry.

What is important about this story is that it is a messy political process, dominated by industry titans with a commercial agenda. There may be one or two technology purists on the team, but any standard SIG is comprised mostly of pragmatic business-minded men... And they are always men.

BT.709 was formed by a number experts from the largest TV firms in the world. They negotiated a product which they felt they could manufacture and sell at a reasonable profit. That was the goal. Just as surely as the first ECMA standard for C# did not define a perfect or complete language, the ITU standard for HDTV did not define the philosophically perfect spec for HDTV. They are nowhere near the logical limit of visual quality in BT.709.

BT.709 is just one conclusion among many possibilities. It is just one compromise solution which got enough votes to pass out of the standards committee. It is the spec we have. It is the spec we work with, but it isn't perfect, I can assure you of this.

In the case of any standard, there are always weaknesses. There are always obvious points where you can go above and beyond the spec and achieve much better results. Exceeding the spec is no sin. Computer firms do it all the time, with delightful results. God, where in the world would we be if NVIDIA and ATI hadn't pushed way beyond the spec for VGA and SVGA?

Whenever I read reviews of the Kuro the critics always seem to propound the fidelity of the Kuro to the BT.709 standard. Repeatedly, they state that the Kuro is the only HDTV to nail the spec perfectly. Repeatedly, they chastise inferior HDTVs for failing to hit the spec. Repeatedly, they critique better HDTVs for exceeding the spec. Mitsubishi has been criticized many times for exceeding the spec.

I can understand why you chastise HDTVs which fail on the low side. This is justified. I do not agree with criticizing firms who exceed the spec on the high side. Unless you believe BT.709 is the perfect and logical limit of video quality, firms should try to exceed BT.709. This is no sin. To characterize it as a sin is just flat cold wrong. Rather, it is progressive improvement.

Ergo the cult of Kuro is simply predicated on bad ideology. That is all. Only this and nothing more. Kuro has been crowed the king by those who hold fast to this faulty ideology. There is no need to take them seriously. Their lamentations are a tale told by an idiot full or sound and fury signifying nothing.

If you happen to be one of these poor players, strutting and fretting upon the stage, only to be heard no more, I have some good news for you. It goes like this.

HDTV is a field strongly allied to the semiconductor industry. HDTV is an example of digital science and engineering. As such, it is subject to Alan Moore's law. Moore's law basically says that we double the density of transistors on any given dice size every 18 months. This means we basically double to power and sophistication of our digital electronics products every 18 months.

If you are upset that Kuro is gone, just wait 18 months. In 18 months Vizio and Phillips will be making flat pannels superior to the current Pioneer Elite Kuro Pro 151FD.

Talk of the 3rd Bubble, and Fiscal Armageddon

So, everywhere I turn these days, I hear quiet, terrified whispers about a growing 3rd bubble from guys I like to call 3rd bubble theorists. What is this 3rd bubble and what is a 3rd bubble theorist?

3rd bubble theory basically maintains that in the past 10 years we have gone through 2 violent economic bubbles and that a third one is now forming. The first bubble was the Internet bubble. It burst some time in mid September of 2000. The second bubble was the real estate bubble. It burst in mid September of 2008. Each bubble formed for about 6 or 7 years, then it exploded. You might argue that the internet bubble got underway in 1994. This when Al Gore held the famouse "Information Superhighway" conference at my dear UCLA... when I was a senior there. The second bubble got started early in 2001 when Alan Greenspan dropped interest rates to nearly nothing to cope with the onrushing crisis of the Internet bubble collapse. Household finance was cheap. Mortgages were considered safe. Banks rushed in.

Now we are building a 3rd bubble: The Government debt bubble. To cope with the explosion of the real estate bubble, the U.S. Federal Government is sucking in huge masses of capital in the form of T-Bills, whist prepping massive deficit spending packages to bail out giant corps and stimulate the dying economy. Terrified to put their money is stocks, corporate bonds, or just a plain old bank account, scarred investors are all to happy to slam their cash into a T-Bills. It is considered the only risk free investment.

These theorist maintain that we are in for a protracted period of grinding deflation. Everyone in the world is trying to deleverage at once. This is a fancy way of saying we're all trying to get out of debt... except the government. Firms and Families are taking all revenues and paying down debt. This is why spending has dried up, and the governments of the world are rushing to fill the gaps as spenders of last resort.

As the use of leverage goes away, the size of M1 and M2 money supplies dries up. As buyers take all profits and pay and pay down debt, demand slips. Together, these two forces produce enormous deflationary pressure. Business must offer fire-sale prices to attract any buyers at all. Ergo the prices of gasoline, Townhouses, Blu-ray disks and Tabasco sauce drop.

In this scenario, the value of the dollar increases. The value of commodities, goods and services decrease. Your dollar becomes more and more valuable as time goes on. Corporate profits look worse and worse. It doesn't make sense to buy stocks, commodities, or invest in new business when you are in a deflationary cycle.

In this scenario, investors will just keep stuffing their money into Government T-Bills. Since they are stuffing their money into Government T-Bills, Government debt increases. Since they are not stuffing their money into good, productive, profitable private enterprise, GDP does not grow. Rather, it is likely to shrink. Because GDP does not grow, but rather shrinks, Government tax revenues shrink. Because the government is likely to cut taxes as a stimulus, revenues will shrink here as well. [Beware of the Arthur Laugher curve, but not in this environment.]

So here it is: Another bubble of insolvency. With ever increasing debt, and with decreasing revenues to pay for it, the Government debt bubble eventually burst. What does the end of the world look like when the 3rd bubble bursts? What features will this Fiscal Armageddon manifest?

First, the Government will default on its debt. It will not be able to pay loan service without printing money. When the government defaults, probably after attempting to print itself out of this mess, the good 'ol Dollar bill will bust. The value of the USD will basically fall off to nothing. We will experience hyper-inflation of 3,000% per month, as producers of goods and services around the world shun our money. The Government will have to introduce a new currency, which I will call the VDollar, or virtual dollar. This will be an electronic currency only. There will be no paper or coin. It will probably be Gold-backed, but only in theory. Attempt to trade your digital bits for actual gold and you will get the cold shoulder. Nevertheless, expect the Government to spin-up some yarn about gold securities in Fort Knox, or something like that.

If the U.S. Federal Government busts the dollar bill, it will be a defeat the dimensions of which we have never experienced. It will be a route from which no honor can be salvaged. I don't want to imagine which Hell or what chaos will be visited upon the world if this scenario comes to pass.