people are not spending because we have a debt based economy, and the value of the debt is based on the faith that it will be repaid. The debt was created out of thin air, and is disappearing back there. Minski describes the deteriorization of an economy from hedged to specuulative to ponzi. We are falling out of a ponzi economy.
The excess stability that was maintained by Greenspan let the world economy leverage into a ponzi state. The errors were built into the system and then exacerbated by the human idiosyncracies of the few powerful men who controlled the fed and by extension the worlds standard of reserve. Greenspans particular idiosyncracy, IMMHO, was that he was a short little man of a small religious minority who wanted big buxomme connected blonds of the majority religious sect. the best way to have access to what he wanted was through power, which was enhanced by maintaining continuing expansion of the credit bubble until extreme stabiility over an extended period led to an extreme ponzi world wide.
One of the beauties of gold is that it has no human frailities. It's supply cannot be manipulated by easily manipulating digits on a computer. It issues no press conferences. It does not testify before congress. and it doesn't need to get laid.
Of course it can suffer from all the problems of violent coerceive, statists. It can be seized at gunpoint and concentrated by force or fraud licensed by those with physical might. that is why the gold standard was a failure in the end. the gold was concentrated by the fraud of fractional reserve banking permitted and encouraged by governments that benefitted from the fraud and used their might to solidify the fraud into a worldwide system of central bankers to protect the fraud artists whenever their perfidity was unearthed by a bank run. Thus small bank runs, like small forest fires were suppressed for decades, even national bank runs were suppressed by international bailouts, and so the fraud deepened, like fuel in a forest that has gone without fire for a century. Finally the fraud got so deep worldwide that a conflagration was unleaseshed. A giant worldwide forest fire of bank runs.
With no central banking, one hundred percent reserve banking, strict enforcement of fraud prohibitions, and material money that cannot be easily increased in quantity, none of this is possible.
The global bank run happening now is the inevitable result of bad monetary choices made for a very long time. The actual tradegedy is horrific, but trying to stop it is futile. The situation reminds me of the Johnstown flood. For yearss the PTB were warned that the dam for the country club lake was faulty. Warnings were ignored. the members of the power elite enjoyed languid summer days floating under parasols on the lake, as slowly, unseen, the dam weakened with each trickle. The final collapse was catastrophic for the thousands in the valley below. once unleashed, the flood could not be stopped.
Resources wasted in futile attmmpt to stop the flood will be washed away with it.
tThe best action now is to get out of the way. take what you can carry and seek higher ground. Marshalling energy and resources to save oneself, and then aid the victims around you. In attempting to stop the flood , the governement risks being washed away, and or materially weakened.