Will our economy and our society suddenly collapse in the near future or will they gradually crumble and fall apart after years and years of continuing decay? That's a fascinating abstract discussion, but also a very practical concern we must address if we're to have the faintest hope of surviving, much less prospering.
"Cognitive Dissonance," a regular poster at Zero Hedge, just posted his second of a three-part series which takes up this issue. Of course, he takes up many other related issues such as: what is money? how can economic trends go on long after it is mathematically impossible for them to continue? what is the role of our faith and belief in "the system" in keeping it going and keeping ourselves enslaved to it? and so forth. I think our community would find this a fascinating essay and discussion starter. I certainly did. Zero Hedge includes a link to the first essay, but having read both (they are longer than one usually sees) I'd say this second one can be appreciated alone if you don't have the time for both.
On this front I share the philosophy of Dr. Michael Hudson, who says that the business cycle, when amplified by financial volatility and Fisher'ite debt-deflation, is really not a cycle but a ratcheting pattern: a gradual, steepening rise followed by a sudden collapse. On that note I would count on there being a "reset button" event at some point in the near future. These things don't happen in a smooth "mean reversal" kind of way.
edit: I shouldn't really say "event" because the quick collapse-like process tends to proceed on a timeframe of months and weeks rather than years or days. Of course it's entirely possible that society degrades in a series of sudden downturns, thus proceeding along a highly volatile path but nevertheless having it's decline unfold in a dragged out process a la J.M. Greer's descriptions. I don't see there being a contradiction there at all.
Will our economy and our society suddenly collapse in the near future or will they gradually crumble and fall apart after years and years of continuing decay?
Good key questions. Ah, for a crystal ball...My answer would be 'hope for the best, plan for the worst!' I actually think a good gentle crumble could in fact be good for society. In many ways with this increased 'wealth' we have become poorer in society terms. Extended families living apart; 2 parents needing to work to keep a house and food, therefore neglecting raising their children etc. I lived and worked in East Africa for 2 years and having arrived believing they were poor came to realise they were rich in ways we have forgotten how to be.
I would also ask you what you mean by 'society suddenly collapsing'. I think 'collapse' [time frame days -> a few months] would be catastrophic to our western civilisation. I note that some societies in the world are already living an ongoing nightmare due to population, food/energy contraints, and the political fighting this engenders. Perhaps like a Tsunami wave rolling up a beach, hitting those nearest the waters edge first but that will eventually swallow us all. gulp.
I'm no expert and I'm certainly no fortune-teller, but IMHO... All of the above, including prosperity and growth, and all at the same time. I think the "answer" depends on one's location (geographically, politically, economically, spiritually) and how one views the circumstances around them. For example - a lot of folks in Greece are probably experiencing collapse, folks in the lower middle class in the US are experiencing ever declining circumstances (aka crumble), and successful CEOs and the like are probably experiencing the best times of their lives...
I suspect this isn't the answer you were looking for though - so a few other thoughts. I firmly believe that what keeps the global economic system rolling is (blind) faith and lack of understanding/education on the part of the average Joe. That, and all of the considerable resources that TPTB (the powers that be) can bring to bear to control the system. There is a HUGE amount of "inertia" behind the system, and any number of powerful people will do/authorize any actions (literally anything) necessary to keep the system going. So, my take is that the system will just keep lumbering along regardless whether or not the math adds up, the system actually provides value, or rationality. Side note: I think the same could be said for most religions, governments, and most other social conglomerates.
On the other hand, there is also a HUGE amount of risk inherent in ALL of the various "sub" systems (climate, agriculture, transportation, politics, economics, energy, mass consciousness, et al). As the stresses of wanton overuse, poor stewardship, greed, etc continue to build, the risk of a sudden and catastrophic event grow. Will a catastrophic event occur? I certanly can't say; but the risks are definitely there. I also think that one risk most average folks don't consider is a turning of the tide in human consciousness - my personal opinon is that the masses are slowly losing that blind faith in their "leaders" and the system(s) in general.
In summary, life is a gamble. Every decision you make every day is a gamble. Nothing is guaranteed - even collapse. Each person has to assess, for themselves, the risks in their lives and decide how to proceed based on their values, goals, and circumstances. And I would add to that, while you are weighing your risks and preparing your response, you also need to live your life. Smell the roses, so to speak. Life is a precious gift, savor it.
Both of you have expressed really great thoughts that mirror much of what I tend to believe in. I like the tsunami comparison, in that it is one type of calamity that can bring immediate, short term and long term devastation, depending on where you are when it hits. But at Sirrocco says, and I concur with as I live in an active earthquake/tsunami zone, you still have to live your life and smell the roses.
Whether is it slow crumble or quick implosion, those of us who are paying attention will fare far better than those who continue to let themselves be led astray by the inaccurate portrayals in the MSM.
Thank you both for sharing, I enjoyed reading your posts.
Cognitive Dissonance posted his 3rd of 3 essays at ZH ... great read for all. A very scary scenario...
The sad state of acceptance of the status quo by the majority foretell bad, bad things.
STM, when faced with mayhem, I fear the vast silent majority will do ANYTHING to reestablish some semblance of control...a wish for the good old days so strong they will demand those same elitists who precipitated this mess TO DO SOMETHING!
Fear not the elitist's (governmental) harsh movements (whose control has been established over the past generations) but those millions of minions we live amongst.
Those of a mind to try and protect themselves with precious metals, preparations and common sense will be swept aside by a panicked tide for self preservation. Neighbor against neighbor...
Like to hear your thoughts Chris and Adam... feeling kind of low right now.
FWIW I had independently read Cognitive Dissonance's part Two before I came across this forum topic. I thought it was a remarkable piece of prose. Very thought-provoking. I believe this series of three will be a reference point, at least for me, in the years to come. It is that provocative.
To thc's question-here goes a few:
Cog Dis' analogy of decaying barns in North Carolina is apt. A decline phase of a society can be both- crumbling for a long time then collapse. I tend to think the downward phase of any complex thing, be it cars, refrigerators, computers works the same way- slow decay to a point then sudden collapse. Actually, don't most mechanical things that are put into cyclical stress testing machines, for example, a steel beam, go through a slow stress decay over 50,000 cycles, then a 'catastrophic' failure in one cycle. Perhaps this is simplistic, but it's a principle that makes sense to me.
Just as main post timbers are eaten out by termites, but look and function fine for now (they still hold up the roof just fine), close inspection by an inquisitve and trained examiner shows the reasons to worry. Then, all of a sudden, SMASH! The exact thing could be said of the housing market in the early 2000's. Kyle Bass and others correctly focused on a small thing that others ignored, the divergence of house prices and income (the termite holes before the housing collapse). Historically these cracks were mainly ignored by the MSM and unknown to 99% of the population.
I would argue that the same principles hold now. We are seeing the termite holes. For subscribers to this site, I think we find it amazing that others are so easily able to ignore these cracks. Abnormally weak employment rebound phase after a deep recession (no expected V-shaped recovery). Abnormally low GDP growth after a deep recession. Need of ZIRP seemingly forever. Need for Fed monetizing debt seemingly forever. No income growth. In retrospect, all these things will seem obvious just like the home price-income spread did. With the growth of the internet, we will have an archive of the voices (like Chris') that were warning people of the obvious.
Another feature of the CD analogy is apt. Once conditions are 'ripe' i.e. the main timbers are 90% hollowed out, it does not take a force of large amplitude to create the collapse. For the barn analogy, this could be any of a number of things, a gust of wind, a tree limb falling on the roof, an animal climbing up the post. Conversely, things that would be expected to knock the post over, don't. The main support survives a direct hit by a tractor bumping into it. So our economy survives a Hurricane Sandy no problem. But a single trader in an interest rate swaps desk loses a billion dollars and starts an increasing amplitude set of financial failures that lead to collapse of a national currency. That is the concept of how I expect to happen.
A note on risk. In the 1930's, we were much less inter-dependent, much more "anti-fragile" (to quote Nassim Taleb). People had pantries, their own gardens, wells, could use a firearm, could hunt game. Oh yes, and saved money for a 'rainy day'. If a disaster occured, such as a dust bowl, most people could survive on their own and with help from their neighbors. That freed up national resources to address the core problem. Today we are so much more specialized, and so much more dependent on other specialists to provide even the simplest needs- food, water, energy, health care, security, shelter. This makes a domino effect of a black swan event much worse in final amplitude. Resources will have to be diverted, i.e. triaged, to provide simple basics, which will significantly deepen and prolong the transition period.
Thank you for doing such a nice job of looking at this question. Your conclusions are sound.
I just listened to a presentation by the guy who writes the subject news letter. Does anyone know about this letter, have an opinion about its value or any info that might be helpful?? saw presentation at www.criticalwarningradio.com
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