Social breakdown and the risk of violence

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Dirk Campbell
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Social breakdown and the risk of violence

As a newcomer to this forum I haven't been able to read through all previous threads, so maybe this subject has already been covered. One of the things I'm concerned about is the vulnerability we face of an increase in lawlessness and violence in a world where money supply is drying up and the price of goods starts to climb steeply. Has anyone put forward a sociological model of what happens when the three Es take a vertiginous tumble simultaneously?

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Re: Social breakdown and the risk of violence

Hi Dirk

Welcome to CM!

I know the issue of social breakdown is discussed a lot here. I don't know if there is a dedicated thread for it though. If you look at the very upper right hand corner of the page you will see a little white box with "Search"  beside it. You can do some 'social unrest' searches and see what is in the archives. I'm sure others will post links as well.

Again, welcome aboard.

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Re: Social breakdown and the risk of violence

 

I would read up on Fernando "Ferfal" Aguirre, who runs a web site and also sells a book on Amazon.com. Very valuable information.

While he doesn't cover the lack of natural resources or peak oil, he definitely covers life in Argentina with rampant hyperinflation, Depression-level unemployment, stagnant salaries, constantly rising prices, and the breakdown of society, law and order. In world of hyperinflation, resources become expensive enough to be scarce anyway.

He covers crime and self-defense quite a lot.

Poet

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Re: Social breakdown and the risk of violence

Dirk, good to meet you.  This very topic is what drives me: peak oil is peak food and peak food is peak population and when population is dragged down the precipitous down side of the Hubbard Curve it will not go willingly or quietly.  You are justified to be concerned Sir.

I would like to see this thread do well because I believe that the three E's and their collective ramifications need to extrapolated well beyond "the next twenty years are going to be completely unlike the last twenty years".  and into clear and concise probable outcomes to the certain collapse of all of these exponential growth curves.  When I get a bit more time on my hands I will throw my hat into this ring.  Nacci.

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Extrapolated ramifications

Nacci,

I agree with you. It is time for some "brain trust" of folks from here to start putting the pieces together.

Something like: When gasoline hits $4.50 a gallon, food goes up by 42%. Once food goes up enough, around 53%, then people begin to go hungry a couple of meals a week. Once food goes up 62%, the average American family will need to skip eating one day a week. As gasoline hits $5.00 a gallon, something like 1 million small businesses will close as they are too dependent on gasoline as an input for their service (running service vehicles such as A/C repair, plumbers, etc.). As gasoline hits $5.00, air travel will drop by 46% because jet fuel will now be out of reach for 63% of Americans. This reduction in travel will cause another 2 million in unemployment as travel related jobs disappear (taxis, front desk clerks, cleaning personnel, cooks, etc.). As gasoline costs increase, see chart, the closing of small businesses is exponential. At around $6.50 a gallon, America loses 30% of all small businesses. The hit to tax generation for the government is so large as to be the final nail in the coffin of "the American experiment".

I understand it is very difficult to make such projections (OK, impossible), but it would be good if we could at least start down this road, somehow. If nothing else, we might discover weaknesses in the system that would allow us some advantage in preparations that are more on target. If our path is even a few more degrees accurate, it might save thousands of lives in the other end. Yes, this is very important and we need to get underway.

Please add your thoughts below.

 

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Re: Extrapolated ramifications

I would direct you toward Jack Spiko's podcast, 'the survival podcast. com'.  His philosophy is to be prepared and to improve your life at the same time. Lots of speculation on what may come might be helpful, but getting some basic emergency needs met and at the same time improving your life is what he advises.  His approach is very organized and helpful to thinking through what works for you.  He has hundreds of podcasts and I have learned a lot from listening to him. He is very much on board on peak oil coming and is making his own personal prepartions to deal with it. Hopefully some of his ideas can seed discussion on this posting.

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Fuel and Food Shortages

FUEL

Let's look for a moment at when oil was $147 per barrel in July of 2008. At that point I was seeing gasoline prices in Southern California (arguably amongst the highest gasoline prices in the nation due to regional pricing and taxes) at around $4.50 per gallon. Despite the high prices and the fact that we were entering recession, life pretty much continued on as it did except for the poorest of Americans. People still drove, though less than they did.

It's also possible that the effect wasn't as bad as it was because by December of 2008, crude was down to $35 per barrel.

Looking at gasoline prices, we see that right now, across many countries, there is a wide disparity in fuel prices. A lot of people get along fine without much fuel and despite the high prices. In the U.K., they pay the equivalent of around $6.50 per gallon.
http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing#Typic...

Many governments such as the Chinese and Venezuelan subsidize fuel prices. The 2008 fuel rise led to these governments either paying through the nose to continues subsidies, or to a lowering of subsidies that led to riots and unrest. We're likely to see similar situations occur.

However, if it is a slow, gradual creep, then you should expect to see people adapting over time as they do in the United Kingdom - smaller cars, mass transit.

FOOD

The world food crisis of 2007 to 2008 also saw situations of riots, hunger, etc. We'll probably see the same things, but more drastic actions. Export freezes by exporting countries, price controls, riots, hunger (death), etc.

With climate change (droughts, weather disruptions, floods), peak potash, fossil fuel price pressures (affecting mechanization, fertilizer and pesticide costs), water issues (aquifer exhaustion, lowering of the water table, salinity) -  these are all foreseeable problems looming ahead. This will affect the poor and Third World the hardest.

http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis#U...

It is possible that food stamps (SNAP) assistance from the government won't rise fast enough to match the market price increases. If so, the government might step up its Commodity Supplemental Food Program (CSFP) and The Emergency Food Assistance Program (TEFAP).

Poet

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Re: Social breakdown and the risk of violence

Thanks for all your responses.

We have a number of historical models for the current situation, the closest obviously being the Great Depression. In a sense we are still in the penumbra of the GD - WWII, Bretton Woods, 'Nixon Shock', bank deregulation etc., so it's possible that the GD was just the first spike in a long curve that we are still in. What we do have the complete curve for is the Roman empire which bears so many parallels to our own age - overpopulation, destruction of resources, unsustainable technologies, arrogance, hubris, heedlessness, complacency, political psychopathy, all taking place in a benign climatic period.

The Roman empire was not an isolated closed system; it traded extensively with partners beyond its influence and control - Africa, Iran, India, central Asia and points east, increasingly as its power waned.

The fall took place over several hundred years and was characterised among other things by loss of centralised control, invasions, economic deflation, localised rule by warlords, lowered living standards, poorer hygiene, epidemics, falling population and religious mania.

I'll follow the suggested links and see what the thinking is! Also keen to see what others here come up with. I've had a PM suggesting I read Kunstler's The Long Emergency. Already familiar with Heinberg, Hartmann, Leggett, Lynas et al

Cheers

Dirk

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Re: Social breakdown and the risk of violence

There are quite a few Survivalist Fiction genre books that explore social breakdown. One of my favorites is Lights Out by David Crawford

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Re: Social breakdown and the risk of violence

When oil was $147 per barrel in July of 2008, my restaurants were almost out of business.(sold some PM to back it up) Everything had gone up in prices. We could not change our menu fast enough to match those increases. Anyway customers would not buy that "increase". If we increase price too fast, we would loss customers. (Average Americans had no idea how the economy worked). I remembered that we try to discourage of selling beef dishes in the menu!

Almost every customer for call-in pick up food want us repeat the "total" couple of times. It means customers are very price sensitive these days and back to the "corner" already. If next $147/bar. come, things will be much worse. That is why we want to sell our 25 year old business and "cash out".

We were used to have after-9 o'clock business few years ago. Now the entire group of customers dispeared. We had trimmed our work force to the minimum. There were too many applicants for jobs if we dare to put up hiring signs on the window. 

More than half of  Americans don't have the "luxury" to talk about Peak Oil, Resilience, Investments..etc. since they are living pay check to pay check,especially the young people. Moral standard is much different than ten years ago. Social breakdown and violence are definitly in our "telecope".

The local police department would not "news" any crimes activity like the old days. I live in a gated community which considered the most safe place in the tri-county area. There were ten cars got robbed in one night a few weeks back. There were no "news" about it. Our "high end" neighborhood looks fine in the surface, there are many drug activity, family violence, divorces...etc behind the doors. These made "community involvement" very difficult.

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Re: Social breakdown and the risk of violence

I sent this link to the DD, but it seems appropriate on this thread:

http://www.kitco.com/ind/Wieg_cor/roger_dec152010.html

Quote:

In Summary.

Astute analysts and observers watching this stuff have agonized over the amount of unbelievable damage the bad boyz have done so far. While it seems they are unstoppable, they are not for the reasons we’ve just discussed. Further, we think the forthcoming bond market crash removes their power and money and the entire global system caves in on itself. Then watch as the patriots and freedom fighters world-wide begin to take power. This is going to be the most interesting movie ever produced.

Now, more than ever, it is important to take the immediate necessary precautions to protect yourself and your families and friends. Traders and investors should be buying precious metals and select shares right now. In our newsletter we have a great list of trading and investing ideas for you. Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years in gold rising 15% per year so this remains a good trade. In the last twelve months, gold rallied over 34% and is going ever faster.

It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this offers a chance, arriving only once in 25 years on the historical cycles.

Get to work on those bunkers boyz. Surprised

Doug

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Re: Social breakdown and the risk of violence
Doug wrote:

I sent this link to the DD

What's the DD?

There seems to be conflicting opinion about buying PM in a deflationary environment with commodity prices about to plummet.

Dirk

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Re: Social breakdown and the risk of violence

DD is Daily Digest.  It will probably be in tomorrow's DD.

I know there's conflicting opinions about PMs.  I can't claim to be an authority, but I've come around to the opinion that PMs will do well when there is a loss of faith and/or value in the currency.  That would normally suggest an inflationary environment, but I'm not sure that's always true.  A loss of value in the currency is reflected in higher PM prices, but that doesn't necessarily mean the PM has actually gained value, just preserved it.

Others can speak much more knowledgeably.

Doug

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Re: Social breakdown and the risk of violence
Dirk Campbell wrote:

As a newcomer to this forum I haven't been able to read through all previous threads, so maybe this subject has already been covered. One of the things I'm concerned about is the vulnerability we face of an increase in lawlessness and violence in a world where money supply is drying up and the price of goods starts to climb steeply. Has anyone put forward a sociological model of what happens when the three Es take a vertiginous tumble simultaneously?

Dirk,

There have already been a number of quality replies, but to address your questions core, as far as I know, no one has "put forward" a model.
However, we can use examples from around the world and extend the situations to more accurately represent the effects of a global financial collapse.

As was recommended above, "FerFal" has a number of very practical, experienced based blog entries; I've been loosely following him since 2004 or so IIRC, and his information has always been valuable. You can find his works here:
http://ferfal.blogspot.com/

 Once Argentina Collapsed, Agro-business from England and America came in to prop the nation up - essentially the economic imperialism that's been endemic in our foreign policy regarding Latin America. How would the dynamics change if that were not the case?

In my estimation, our priorities are as follows:
1. All executive responsibilities generally delegated to state or federal authorities need to be orchestrated on a local scale. If managed improperly, chaos ensues.

2.  Matters of sanitation and water services will largely delegate the degree of social decomposition, followed closely by matters of food. 

3.  Matters of civil defense will only be possible in areas featuring small, relatively independent populations. The magnitude of starvation will simply overwhelm even the most cohesive deterrents in areas with highly concentrated populations - especially those which are not surrounded by food producing agricultural land.

4. Agriculture itself needs a rapid, permanent paradigm shift. If it fails to shake loose of the school of thought that suggests that "Agriculture = Land + Oil", it will certainly not sustain any significant populations.

Basically, this time, there isn't anyone who can come and financially bail us out. Even if there were, the pretenses of civilization that preclude all out war will be dropped quickly in states of desperation.

With that as the "macro-scale" worst-case scenario, you can figure what things will be like locally. Less of everything, in short.

If you can, find others of like mind and start planning. If you've got a responsive town, start looking into "transition towns". 
Research what Hyperinflation did in various nations, and find out why it stopped. The bottom line with all of this is we've waaaaaay overshot sustainable in terms of energy, population, economy and agriculture. 

I see this as relatively unavoidable at this point. Plan accordingly.

Cheers,

Aaron

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Re: Social breakdown and the risk of violence

Good points Aaron. FerFal is a great resource and one of the reasons I have gone to the lengths I have to harden my home, property and routines.

Think about what FerFal has to say, and then take alook at how badly things have spiraled out of control in Mexico. It is a few degrees more horrible than Argentina in my opinion, but I did not get daily updates on the goings on of Argentina during it's crisis.

Those of you not on the Mexican border may find this news site both enlightening and frightening, as it accurately depicts humans at their worst by telling the truth.

http://www.borderlandbeat.com/

The things that have occured in Argentina, Mexico and Iraq will be no different here in the United States, should it come to it. The harder you are to locate, to distinguish in the crowd, the more predictable and reliable in your routines you are, the more likely you are to become a target.

Study modern human depravity in the form of "greed" conflict and then go volunteer at a charity to make sure your neighborhood does not fall that far.

Merry Christmas,

Jager06

 

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Re: Social breakdown and the risk of violence

Here's a little something to cheer you guys up......  and create an environment for social unrest!

Peak Oil And Population Decline

By Peter Goodchild

19 December, 2010
Countercurrents.org

A solution that is sometimes proposed for the dilemma of fossil-fuel decline is a global campaign for the humane implementation of rapid population decline (RPD). With all due respect for the attempt to find a satisfying answer to the question of overpopulation, such a proposal would conflict with the available data on the rate of decline in fossil fuels. The annual rate of population decline, in a civilization in which fossil fuels are the principal source of energy, must roughly equal that annual rate of fossil-fuel decline, which is probably about 6 percent (Höök, Hirsch, & Aleklett, 2009, June).

Unfortunately there is no practical humane means of imposing a similar 6 percent annual rate of decline on the world’s population. If we let Nature, i.e. loss of petroleum, take its course, a decline of 6 percent would result in a drop in world population to half its present level, i.e. to 3.5 billion, by about the year 2020, a mere decade from now. The only means, however, would be a rather grim one: famine.

On the other hand, a deliberate global campaign of RPD, even with the immediate implementation of an utterly hypothetical fertility rate of zero (i.e. the implementation of a “zero-child policy”), would be far less dramatic. The rate of population decline would exactly equal the death rate. (This is true by definition: “growth rate” equals “birth rate” minus “death rate”, and we have already said “birth rate” is zero.) The present death rate is about 1 percent (CIA, 2010). At that rate, the global population in the year 2020 would still be about 6.3 billion. There would therefore be no means for such a program of RPD to work before the effects of fossil-fuel depletion took their own toll.

(Such figures for an RPD program, of course, disregard any other possible catastrophic future events such as famine [the above-mentioned means that is in fact likely to prevail], disease, war, general anarchy, and a thousand other side-effects of societal breakdown.)

Incidentally, we can also consider the more long-range effects of the previously-mentioned depletion in fossil fuels. If we assume that agriculture is ultimately unsustainable (Diamond, 1987, May; Ferguson, 2003, July/August; Lee, 1968), then we must regard a population of 1 million, as existed in 10,000 BCE, as ideal. To be generous, however, let us choose 10 million as a final stabilized population. With an annual decline in fossil fuels of 6 percent, a final drop to that relatively feasible population of 10 million will be in about the year 2110.

<MORE @ LINK>

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Re: Social breakdown and the risk of violence

Thanks for starting this thread, Dirk! 

I know Jag did one or more "scenario" type threads some time ago that may be of interest to you.  Here's the start of a couple of them that I was able to find, "Crisis Simulation - Day = -1" @ http://www.peakprosperity.com/forum/crisis-simulation-day-1/30964, and "Crisis Simulation - Day 1", at http://www.peakprosperity.com/forum/crisis-simulation-day-1/31019?page=0#comments.  I don't specifically remember how much ithese get into social breakdown and civil unrest, but I have to believe they at least touched on it..  Here's another I found when searching for JAG's: http://www.peakprosperity.com/forum/fictional-account-day-shtf/31191 ; again, not sure how much it goes into social breakdown and such, but I would be surprised if it didn't at least touch on it.

 I also second what others have said about reading what Ferfal has to say at his site. He presents a lot of really valuable insight from his personal experiences.  I also look forward to checking the survivalposcast which was recommended, to learn what they have to say on the subject.  I know I loved the recent podcast/conversation the person who runs that (Jack?) and Chris did not  long ago.

Aaron, great post!   Your summary is just the kind of conceptual model I've been trying to get my head around.  I.e., I know that if we don't accurately anticipate the conditions we'll have to deal with, we run the risk of  being inadequately prepared for what ensues.  Unfortunately, I think my family (and my locale?) are indequately prepared for dealing with an increase in social breakdown, civil unrest, and violence.  Since that can potentially have very serious consequences, it is a situation I am anxious about, and care deeply about trying to rectify while there is still  time.  So I am very glad to see this thread, and the informative responses to it!

Jager06 wrote:

Those of you not on the Mexican border may find this news site both enlightening and frightening, as it accurately depicts humans at their worst by telling the truth.

http://www.borderlandbeat.com/

The things that have occured in Argentina, Mexico and Iraq will be no different here in the United States, should it come to it.

Well said, Jager!  I agree that history, and current events elsewhere, are among our best teachers on what to anticipate!

I'm looking forward to reading what other advise people post on this thread!

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Re: Social breakdown and the risk of violence

Pinecarr,

I've got a general outline in my head about risk management and how it relates to stochastic emergencies. 
Basically, we can categorize all emergencies into a few "blocks" that represent things like duration and intensity.

All emergencies have one thing in common - they represent shortages. With that in mind, the skill to procure or develop is more important than simply "preparing" by possession.

Maybe we can start a new thread in the "what should I do" portion regarding planning for emergencies.

Cheers,

Aaron 

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Re: Social breakdown and the risk of violence
Aaron wrote:

Pinecarr,

I've got a general outline in my head about risk management and how it relates to stochastic emergencies. 
Basically, we can categorize all emergencies into a few "blocks" that represent things like duration and intensity.

All emergencies have one thing in common - they represent shortages. With that in mind, the skill to procure or develop is more important than simply "preparing" by possession.

Maybe we can start a new thread in the "what should I do" portion regarding planning for emergencies.

Cheers,

Aaron 

Aaron, I like the way you block out the types of emergencies we should prepare for based on duration and intensity.  It seems like a good way to stop worrying overly about details about how things will unfold vs being flexibly prepared for broad classes of emergencies and situations.  (I think that's what you were saying!).  I like your increased emphasis on skills vs things (procurements), too.  I think the latter play a very important role in preparation, but I think they can only help for so long, and for certain situations.  I.e., I have come to see them more as a short- to medium term temporary solution vs a more long-term, sustainable, altered-way-of-life solution.   I think we need to preapre for both.  Make sense?

Then again, I think a lot of those longer-term skills may be needed early on too!

As for the suggestion for a new "how to prepare" thread on planning for emergencies, I think that would be really valuable!  I hope Chris and/or Adam picks up on it!!  You're officially volunteered!;)

Thanks for your response,

pinecarr

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Re: Social breakdown and the risk of violence

Aaron-

I agree about the new thread.

When I speak to the "Teams" I use Maslow's Hierarchy of Needs as the basis for procurment prepping.

This fits for longer term disruptions as well, once you have the near term basics applied.

Define the terms....24 hour kit, 72 hour kit and longer term such as 1 to 6 months and year long supplies. These are mostly acquisition preps.

1 year preps and longer get into lifestyle prepping, including energy, tool and skill set acquisitions.

I try to conjoin this with monetary issues as well, providing a "debt free vs. debt laden" example and my own 12 step program for getting out of debt and prepped. Yeah, I hear you....another 12 step program....great...

It did not start that way. It started with me giving folks who asked advice, and I found that I was re writing the same core principles over and over again, regardless of the situation. So I consolidated and printed my own system. I managed to pay off my credit cards, pay off all vehicle debts, put almost 18 months preps (+ tools, skillsets...energy partly) away for my family of 6 + In-Laws, purchase gold and silver in the ratios I specified, and put $20k away where I can get it.

This was done on the cheap using only my paycheck, not business or investment income, and in a single income household.

Psychological preps come with experience, and the more experience you can get being shocked by grossly horrible human behavior, the more likely you are to reasonably cover that base and be able to deal with trouble.

My .02

Jager06

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Re: Social breakdown and the risk of violence

Aaron, Jager, pinecarr -

My sense is a lot of people might be pleasantly surprised to find out that they have already taken some small preparatory steps for the initial, shorter duration events without even knowing it.  Everyone I know here in Virginia Beach has a Hurricane kit with a couple of days worth of water, food, candles etc.  We get the opportunity to use them once or twice each year when the annual Nor'easter, hurricane or tropical storm blows through.

These are the same people who would tell you that such a kit makes sense - "Because we live in a place where this kind of stuff happens" but if you asked them if they would need it for some kind of social disruption or disorder they would look at you expecting to see a tinfoil hat.

They probably wouldn't even connect to two events and that they were prepared for either.  One is preparation for an event they think might happen, the other is an event they don't think could possibly ever happen - so why prepare for it.  This I think is the psychological preparation Jager was talking about.

It's going to be interesting to see this thread unfold.

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Re: Social breakdown and the risk of violence

Well, I just got to throw this out to you all.   It was either post here or the Humor thread....this guy has given me opportunity to pause and reflect on many issues.  Out-of-the-Box.......If you positively can't handle an outrageously liberal, radical, master of verbosity, Don't click on this link!!!

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/12/22/notes122210.DTL&nl=fix

I got this link shortly after I purchased my copy of Kunstler's "The Long Emergency".  Ha!  Go figger....Aloha, Steve.

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Re: Social breakdown and the risk of violence

Hi Dirk, I'm also brand new. I think we got a dress rehersal for this at the end of 2008. It looks like it's going to get much worse than even that.

I personally feel more secure in my small Montana town than I would in a bigger city. I feel like I broke out of Southern California just in time. My personal opinion is that the chaos, violence and social unrest will be generally worse in the cities. I'd rather be poor out here in the hills than I would in the middle of Chicago. At least I can shoot stuff and burn trees. I'd be curious to hear other opinions about that.

Interestingly, just outside of our small town there is a gated community designed for the ultra-rich. Most of the mansions out there are occupied only part of the year. I often wonder what these ultra-wealthy people will do, hole themselves up with lots of supplies or would they try to blend into the community at large? Wha'ts their best strategy? Are very rich people more aware right now than the general population regarding our imminent collapse? Will their money still work as effectively to commandeer servants and bodyguards?

It's been well documented that when an economy really collapses, there are mass migration events. People just pick up and go somewhere, anywhere they think is better. I  wonder which areas will grow the most and maybe prosper. I hear that the Portland area is better prepared than most with educated people and has rich soil nearby. Someplace like Pheonix, on the other hand could get pretty thirsty.

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Re: Fuel and Food Shortages

I agree we're seeing a gradual creep scenario like you describe. However, I'm wondering if the currency and the stock market could actually deflate pretty suddenly, thus causing perhaps a quicker downward spiral. This would likely occur in the midst of rising inflation, even more job losses and government defualt. That would be either outright default or implicit default by inflation. This time it's not clear that the taxpayers will be willing or able to even bail out a lemonade stand, much less another round of crashing banks.

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Re: Social breakdown and the risk of violence

Dogs,

My main concern isn't amongst the middle/upper-middle class - it's with the growing numbers of Americans that are barely eeking by at poverty level, and in some cases, significantly below. With the spread of gangs with a greater degree of professionalism, a growing payroll, and increasing despotism, I think it's a factor that needs to be heavily weighed when we consider that this demographic has little to left to lose. 

Given that there's a lot of experience with violence amongst this demographic, and most Americans have never even been in a fight, we have a dynamic that IMHO creates a serious and real threat. This situation has played out in the Third World for decades now; Zimbabwe, Rhodesia, Angola, Liberia and Sierra Leone in Africa, Khmer Rouge and NVA in Indo-China, The Chinese Government's persecution of the Nepalese and Tibetans, South American Narco-Terrorists (who incidentally are strangling our southern border) - Shamil Basayev in Chechnya  -  the list just goes on and on. Illegitimate governments, criminal factions, gangs - these are the "real" threats behind social breakdown, and they're all borne of shortages. 

It's almost worth considering what happened at the end of the Roman empire and thinking about what you'd have done if you were a citizen then... With a few hundred years of violent superstition, repression, extreme poverty and stagnant intellectualism.

Obviously a worst case scenario, but it's wise to at least flesh out the parameters within which our present crisis will be contained.

Cheers,

Aaron

PS - Ceauşescu's Romania did something similar to what we're doing. Denialism about the situation, heavy borrowing, a heavy burden on the common person with degrading infrastructure.

Pretty bleak, but might be a realistic "middle ground".

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: Social breakdown and the risk of violence

Hi poet!

You said,

Let's look for a moment at when oil was $147 per barrel in July of 2008. At that point I was seeing gasoline prices in Southern California (arguably amongst the highest gasoline prices in the nation due to regional pricing and taxes) at around $4.50 per gallon. Despite the high prices and the fact that we were entering recession, life pretty much continued on as it did except for the poorest of Americans. People still drove, though less than they did.

It's also possible that the effect wasn't as bad as it was because by December of 2008, crude was down to $35 per barrel.

The sky high oil price lasted for a few weeks then plunged to $35 causing a much needed relief. Imagine + $140 oil for a year or longer. That would begin to buckle the system. I recall several airliners going belly up during that summer. It was only the price crash which kept the rest of the airliners from filing chapter 11. My family being in the restaurant business, I remember the prices going out of control. Every month we recieved a price increase notice from vendors while I was raising my prices causing sales to hurt. The next time the price of crude spikes we will decrease portions as opposed to raising prices. For some reason customers prefer to see smaller portions instead of nominal price increases.

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Re: Social breakdown and the risk of violence
bearmarkettrader wrote:

The sky high oil price lasted for a few weeks then plunged to $35 causing a much needed relief. Imagine + $140 oil for a year or longer. That would begin to buckle the system. I recall several airliners going belly up during that summer. It was only the price crash which kept the rest of the airliners from filing chapter 11. My family being in the restaurant business, I remember the prices going out of control. Every month we recieved a price increase notice from vendors while I was raising my prices causing sales to hurt. The next time the price of crude spikes we will decrease portions as opposed to raising prices. For some reason customers prefer to see smaller portions instead of nominal price increases.

Hi BearMarketTrader!

I personally prefer the same portions/box sizes, but higher costs. That makes costs more transparent to everyone - but I feel like most people just want to pretend and keep up appearances.

I should say that the cost of gas didn't bother me too much back then because I only worked 4 miles from home (and now I work about a mile from home, which is fantastic as long as I get to keep my job!) but I had co-workers who were being seriously shafted with their 40- to 70-mile commutes! Talk about working 2 or 3 hours per day just to pay for transportation (gas, maintenance, etc.) with after-tax dollars!

But yes, those restaurant and grocery prices would shoot through the roof if oil prices stayed up like that. With oil at $91 per barrel now, how are things in the restaurant industry these days? Do you think we're headed for another system-buckling soon?

Poet

 

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: Social breakdown and the risk of violence

Poet,

 

My vendors barely lowered their costs when the crude oil plunged but ever since it broke 70 the increases have been hitting again. The last two months weve been bombarded with notices of cost increases. In addition, many of my suppliers tell me that their accounts receivable are through the roof with a good 20-30% in delinquency. For now, none of the them have gone under but there are more than a few that are hanging on my a thread. The suppliers with labor unions are the ones that keep pushing up prices (pensions and increasing health care costs are doing their damage). I will also add that this one particular supplier of bread products that has union labor also has some of the most out of shape employees I have seen. So many of these drivers are obese that I'm sure that their poor health is affecting the costs of healthcare.

Going on to another point, with obesity so endemic in this country it surely contributes to the high cost of health care. Americans save money on the front end by eating cheap but high fructose corn syrup pumped food but end up paying the price in the back end with repeated doctor visits for their diabetes.

Dirk Campbell's picture
Dirk Campbell
Status: Member (Offline)
Joined: Dec 4 2009
Posts: 17
Re: Fuel and Food Shortages

Thanks to all for kind comments. This forum is so damn civilised!

Rojelio wrote:

I agree we're seeing a gradual creep scenario like you describe. However, I'm wondering if the currency and the stock market could actually deflate pretty suddenly, thus causing perhaps a quicker downward spiral. This would likely occur in the midst of rising inflation, even more job losses and government defualt. That would be either outright default or implicit default by inflation. This time it's not clear that the taxpayers will be willing or able to even bail out a lemonade stand, much less another round of crashing banks.

Nicole Fosse apparently thinks it could be sudden, like the collapse of the Soviet Union or quicker, like a few days or even hours. I got this from Mike Haywood - do you people know of him? Like Martenson and Fosse he has studied the situation in depth and runs a weekly newsletter called the Banking Crisis Digest.

Transition Towns have been mentioned. As it happens, the town of Lewes in England, where I live, was the first after Totnes to start a Transition initiative, and I am involved. One of the questions that is not addressed by the Transition model is the threat of violence in social breakdown, because the model does not take account of the imminent sudden collapse of the global financial system - though transitioners are starting to wake up to it. Mike Haywood has attempted a preview in his Meltdown slide presentation. What will happen in systemic collapse:

Internet outages

Schools and universities closed

Suspension of full banking activity for days

Nationalisation of banks

No or limited withdrawals from cash machines

Credit/debit cards won't work

Petrol stations run out of fuel (we're in the UK here folks!)

Mass disorder, panic, riots

Martial law imposed, curfews

Rise in popularity of extreme political parties

Total collapse of old order followed by a command economy and loss of personal freedom

Near total unravelling of the socio-political order

Local resource wars

Generational conflict

To DamntheMatrix: It is of course true that a reduction in population would correspondingly reduce all our problems. But a reduction to one million is a bit drastic! Thom Hartmann puts a sustainable population at one billion.

Fond regards

Dirk

A. M.'s picture
A. M.
Status: Diamond Member (Offline)
Joined: Oct 22 2008
Posts: 2367
Re: Social breakdown and the risk of violence

That still puts us in a precarious position of deciding which 6 billion are "good" with dying.

That process won't be pleasant...

Cheers,

Aaron

David.a.Isaksson's picture
David.a.Isaksson
Status: Member (Offline)
Joined: Mar 29 2010
Posts: 17
Re: Social breakdown and the risk of violence

This might be somewhat off topic, but in the beginning of the thread it was discussed what would happen or happened when the gas price hit 4,5 dollars per gallon. According to my rough calculations the gas price in most Sweden where I live and in many European countries is close to or over 8 dollars per gallon. A few years ago I read that the estimation of where Swedes would have to give up car travel would be at approximatively 12,5 dollars per gallon. 

Anyone know why it is that people in Europe can live with a gas price so high, while the US would see major problems with a price that high?

 

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