Change or Die

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.

Closing the Loop

So, uh, “the market”… eh? So much for that.

Never mind all this ‘rebound’ shit. They must be aiming these lies at people with fetal alcohol syndrome or something.

We’re near the end of the first round of thermodynamic contractions in the global system. The important thing to remember is that this is all fundamentally being driven by energy. There have been ‘bubbles’ before, since at least the early eighties, so suggesting that some poor wretched fool who took a sub-prime mortgage he couldn’t afford is what collapsed the global economy is just asinine. It’s worse than asinine, it’s insulting.

It’s really about derivatives, which is just another way of saying ‘side bets’. You’re gambling on gambling upon gambling to the nth power, and from what can be discerned from the outside, mostly losing in the process. Why take the risk? because it’s the only way to mask that your underlying physical economy is declining, and your energy supply has peaked. And when I say ‘mask’ I mean to oneself, and to others. The banksters are just as clueless about the energy situation, by and large, as anyone. That’s manifestly clear by now. What they see is that profits need to rise, and that they had to work harder and harder to keep making that happen. WHY probably never occurred to them. So a hallucinated bubble of speculative paper is the last resort. If you can’t create real wealth, you have to pretend that you are, and everyone else has to pretend, too.

We’ve reached the point where economic collapse is curbing demand for energy enough that we are outracing the decline curve. Over time this will create the illusion of an ongoing series of relapsing depressions, as we slide farther down the depletion cliff, stabilize at some lower level of demand, and then fall back into chaos as the cliff drops away from us again. So this is not going to be the last time we see this shit. Obama might get lucky and catch a break in his first term. Anyone who thinks that the republican party will even exist in a year or two needs to quit huffing paint.

I sincerely hope you took my advice from a few months back and triaged yourself ahead of time. You now have room to think about where to go from here.

By far the best big-frame thinking on these issues is going on at global guerillas. Forget all the half baked doomers with freeze dried pizza and shotguns; John Robb is so far ahead of the curve on this he should probably be in B-Rock’s cabinet. Hell, he should be the vice president. The only ways through this that I can discern are either what he proposes, or a Larouche style New Deal For The Planet. The latter is probably more desirable on the whole, but the former fits more with what I’ve forecast. Your millage may vary.

You probably have a few months to a couple years before you might have to kill marauding cannibals with a wrecking bar, ( FYI it’s most efficient to be hitting someone in the brain stem, collarbone or the temple. Break the thicker bones in the arms if they get in the way. ) so use them well. I’ll hang in there with ya as long as I can.