Scary post 'o the day -- thanks for the nightmares GP

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career.We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

Three short notes, then I'll leave you to your thoughts:

■ We've been warning on these pages about the risk of deflation for a while. It's likely that no one reading this has experienced such a world. To get a sense of life in a deflationary world, try this.

■ About the euro, is this why it bounced off of $1.26 and sits at $1.31 at the moment? (Euro chart here.)

■ About civil liberties and the mental "state of the nation," I offer this thought experiment.

Imagine that there were a second big terrorist attack sometime during Bush II's reign, in 2005 or 2006 for example. The response would have been to shut down the country even further. The experiment — how much further? If the "authorities" wanted to institute exit visas, for example, would the country have objected?

The point is this — the degree of loss of liberty we could experience is not a function of what the American people will tolerate. The American people tolerated Bush v Gore. It's a function of how much loss of liberty the "authorities" (Our Betters) are interested in imposing.

So what is that extent? What's the lower limit to the shutdown, in a world gone into the streets — Occupyers, homeless; browns and blacks; criminals, druggies, the terminally unemployed — in other words, all the Unpeople we have within us?