What the entitlement culture is doing to the US - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 19 October 2012
What the entitlement culture is doing to the US A  A  A

Madrid, Spain

"Asia has a big advantage," said our old friend Marc Faber, at yesterday's Halkin conference in London. "It doesn't have the same entitlement culture of the developed countries."

"Entitlement culture..."

He was talking about zombies. People who take, but don't give. Parasites on the productive economy.

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Of course, zombies come in all shapes and sizes. Many are decent people...who work hard...do their best. They've been forced...or seduced...into zombiedom, often without realizing it.

Here's a note we found in our in-box yesterday. The writer explains why there are so many troubled zombies in the Midwest. They are zombies because they depend on government subsidies and giveaways for their money. They are troubled because they know the country is going broke:

    I'm from Nebraska. Middle America understands the subsidies that benefit them (and they will be tireless in defense of ag subsidies especially; the fastest growing luxury car market in the US is Omaha. But they also understand that spending and deficits are on a crazy track that is undeniably unsustainable. And that, plus the fear of a government that it seems can only grow, overwhelm the desire for subsidies (and they know Republicans will never really stop ag subsidies since there are 3 times as many Senators from Nebraska and the 2 Dakotas as there are from California).

    The ag economy is thriving to a great extent because of the ethanol mandate which has been very effective in more than doubling the price of corn (now, often above the price of wheat per bushel, which until recently was unheard of) as we burn food for fuel.
Zombies to the left. Zombies to the right. And zombies on every streetcorner when you're trying to get home.

It's the 'entitlement society,' as Marc puts it. Half the households in the US tap into money that doesn't belong to them - they're beneficiaries of money from the government. And they are not likely to give it up.

"Once you get into a situation like that, where people have a legal right to receive money from the government, it is almost impossible to stop it," Marc continued.

So what will happen now, one member of the audience wanted to know.

"I don't know. No one knows. But the best thing you can do to protect yourself is probably to buy a farm in a remote location."

Marc is not necessarily bullish on agriculture prices. Instead, he is bearish on central banks and central governments. Between the two of them, they will bring on a disaster. Having a little farm of your own may be a good investment - no matter what happens to the price of wheat and soybeans.

Some things are more important than money. Like survival, for instance.

"The history of the human race is a history of war," says Marc. "And the next war may not be groups of tanks facing off with one another. I can imagine that London's water or electricity will be cut off. Or, the system of internet connections...or the electronic banking system...will be shut down. We all depend on those things much more than we realize. Society has become very complex and very inter-dependent. A breakdown anywhere could mean a breakdown of the whole system. That's when you'll wish you had followed my advice and gotten a farm where you could be more or less self-sufficient...at least for a while.

"That could be the most important investment you ever make."

In terms of return on investment, a farm may not be the best move you ever make. But neither is a smoke detector. But now, central bankers and central governments have matches in their hands and pyromania on their minds. It's time to take precautions.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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3 Responses to "What the entitlement culture is doing to the US"

Hasit Hemani

Oct 20, 2012

" But now, central bankers and central governments have matches in their hands and pyromania on their minds. It's time to take precautions." with this comment you can't end the article.I thought the article has just begun, and it will reveal the foolhardiness of the high tech economic brains' new fundas and it ended abruptly. But Why the central govt. and bankers would do the torching of the economy ?



Oct 20, 2012

The Indian government is headed by a bunch of people who know nothing but vote bank politics. As a result we keep doling out subsidies like MNREGA that create zombies just like US. This bolsters the deficits, creates inflation and makes people worthless over a period of time. The competitiveness of India will reduce if we create zombies due to inefficient mechanisms



Oct 19, 2012

I am from India. Is there an entitlement offer in my country which claims of growth but not going broke. There is already one which is troubling me and I am not sure if it is from the Government. And I also wanted to know if this is true, Is it a plot against the individual like me who is a controversial responder to all the Corruption and Scam news to the country's private national news channels.

I like your investment idea to buy a farm in a remote location which is also my ambition for a long time but cannot afford it right now as i have lost some money in trading derivatives as a retail trader even though I have a feeling that my strategies are not too wrong but there is something in the trading system that either my own broker is trading against my order or the big traders or operators want to flush out the retailers.

And today i find in a business daily, Mr Jignesh Shah of FT Group says that 90% of retail investors lose money trading derivatives. Have the exchange or operators or brokers mapped out the number of retail investors trading derivatives and trade against these individuals to rob or keep them out.

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