I’m going to make this as simple and straight forward as I can: there is now a good chance that at any time in the next few weeks onward, life as we know will simply stop. Money is already drying up for big commercial projects and large scale shipments of commodities. In my town a huge condo development has come to a standstill for lack of ‘favorable investment conditions’. Which might not be so strange, except that where I live the two main sources of income flowing into the city are property investment, and tourism. If they can’t finish a project full of million dollar selling condo boxes, then something is up.
But this is only a microcosm. The macro picture is that all the money in the world is flowing into a hole in the bottom of the tub. The bankers have basically thrown the planet earth under a bus to save themselves long enough to get out. And it may be that they don’t even think they need to get out. In which case we’ll all go down the drain together.There is simply no conception in the public of how utterly bankrupt the whole world is in dollar terms. It will require a long and difficult period of transition before we re-connect with whatever is left of the fundamental physical economy again.
As soon as the lines of credit and cost-profit equations stop making sense, long haul trucking will stop happening. And farther back up the chain, farmers will stop being able to stay afloat, but you won’t see the immediate effects of that. Really you could point out anything in this extensively deregulated and economically liberalized society and recognize that if it requires money, and we have a chain reaction failure of the banking system, it may just grind to a halt. And when it starts up again, it may be at the point of a gun. That may be the only way it can start up again.
The fundamental equation underlying all of this is orders of magnitude worse than that which underpinned the great depression of the 30’s/40’s. There is no reason to think that it won’t be orders of magnitude worse in it’s unfolding. It took world war II to pull the earth out of the last one, and one hesitates to imagine what might be required to pull the earth out of what is going on now. Larouche figures we are repeating the pattern of the 14th century ‘new dark age’ where upwards of one third of the population disappeared, through a combination of starvation, plague and rampaging mercenary companies. Myself, I see very little to to soften my reading of some of those bad numbers from a couple months ago. An economic collapse certainly isn’t going to help in the distribution of an ever shrinking supply of food.
My advice is rather vague and simple: as we go through the phase change from the society we have now to the likely regime of crushing austerity and institutional decay, there will be a window of instability. In chaos-math terms, things that get done in that window are vastly magnified in their impact, as the rest of the system is in a very fluid state and easily absorbs inputs. Which is a complex way of saying: if you’re in the right place at the right time to say and do the right things, you’ll likely be shaping the society around you for generations to come. If it aint you, it’ll be somebody else. In case it weren’t obvious our current crop of leaders is on the way out, possibly in a collection of leak-proof plastic garbage bags. They are not at all well adapted for the things that are about to happen. Make sure that you are.
It’s gone beyond pessimism or optimism. We can probably resume the philosophical discussions in a few months, to a few years. Time to walk the walk.