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Dmitry Orlov: Ukraine Crisis, Russia and Crimea Update | Greg Hunter’s USAWatchdog
Dmitry Orlov: Ukraine Crisis, Russia and Crimea Update | Greg Hunter’s USAWatchdog.
By Greg Hunter’s USAWatchdog.com
Dmitry Orlov is a Russian blogger who writes about the parallel between the U.S and the USSR. Orlov lived through the financial collapse of the Soviet Union in the early 1990’s, and he thinks the U.S. is on the same trajectory. Orlov contends, “The trajectory is defined by this sort of incompetent militarism where more and more money results in bigger and bigger military fiascos around the world and less and less of actual foreign policy that can be pursued or articulated. There are massive levels of corruption. The amount of money that is being stolen by the U.S. Government and its various appropriations processes is now in the trillions of dollars a year. Runaway debt, the United States now has a level of debt that is un-repayable. All we’re waiting for is interest rates to go across the magic threshold of 3% and the entire budget of the country explodes. There are also all types of other tendencies that point in the direction of collapse and systemic failure at all levels.”
So, how close are we to collapse or system failure? Orlov contends, “I am pretty sure that anyone who makes a prediction when the collapse will happen is wrong. Nobody can say when it will happen. It’s the same as saying a bridge that is structurally deficient; you don’t know when a truck is going to fall through into the river below. . . . You can be chronically sick for a long time, and then one day, you go into a coma or your heart stops. You cannot predict what day that will happen. Orlov does say, “The United States right now, from my point of view and the point of view from observers from around the world, is on suicide watch. It’s a country that is going to self-destruct at some point in the near future.”
On the Ukraine crisis, Orlov thinks, “The Crimea referendum was the first legal way to find out what the people wanted to do. The turnout was remarkable, and they voted overwhelmingly to rejoin Russia, to become part of Russia once again. The interesting thing here is it was not just the Russians that voted to join Russia but the Ukrainians in Crimea, which makes a sizable part of the population voted to join Russia. . . Ukraine is composed of sort of a no man’s land in the West and then Russian territories in the East. . . . If that trend holds, you are basically left with this insolvent nugget of nothingness, and it will be up to the international community to decide what to do with these people. They are right now marching around Kiev with baseball bats and going into government offices and beating up members of local government and installing their own members. They are basically running amok. They don’t even have the support of the Ukrainian military at this point. So, it will be a mop-up operation against these neo-fascists that are running amok.” Orlov goes on to say, “In Washington, in the Obama Administration and in the Kerry State Department, we have absolutely breathtaking levels of incompetence. These people really don’t know what they’re doing and are dangerous at any speed; and everywhere else, we have this follow the incompetent leader thing taking place, and it’s really, really frightening because the incompetents are leading the world to a really dangerous place.”
Orlov goes on to say, “What are these people doing trash talking the Russians? What would these people do without Russia? How would they get out of earth’s orbit and visit the international space station? Who would negotiate international deals with Syria and Iran because all they can do is blunder and lose face.” Russia doesn’t need the United States for anything. The United States is the most dispensable country on earth.”
On possible war between Ukraine and Russia, Orlov contends, “They are not going to fight because the Ukraine military is part of the Russian military. There really isn’t any opposition. The Ukrainian military will decide what to do in a few days, and then they will inform the Russians, and after that, maybe they will inform their own government. Maybe they will just go into the government offices and just round them up. Last I heard, 60% of Ukrainian military accepted Russian passports already. The remaining parts are being shipped out to the mainland. That is happening peacefully. So, there isn’t going to be any fight. The really important point is the Ukrainian military all over Ukraine does not support the government in Kiev. They are withholding support, and what they really want is to join the Russian military. . . . The best thing Russia can do is sit back and relax and let this work out. I don’t think the government in Kiev has any legs.”
Join Greg Hunter as he goes One-on-One with Dmitry Orlov of ClubOrlov.com coming from Central America.
(There is much more in the video interview.)
After the Interview:
Dmitry Orlov is currently working on a new book that will be out later this year. Orlov says, “The new book is about communities and what makes them resistant to adverse events such as financial collapse.” Orlov adds, “The U.S., as a whole, is not resistant to shocks, but some parts of America are.” You can find Dmitry Orlov at ClubOrlov.com.
Dmitry Orlov: Ukraine Crisis, Russia and Crimea Update | Greg Hunter’s USAWatchdog
Dmitry Orlov: Ukraine Crisis, Russia and Crimea Update | Greg Hunter’s USAWatchdog.
By Greg Hunter’s USAWatchdog.com
Dmitry Orlov is a Russian blogger who writes about the parallel between the U.S and the USSR. Orlov lived through the financial collapse of the Soviet Union in the early 1990’s, and he thinks the U.S. is on the same trajectory. Orlov contends, “The trajectory is defined by this sort of incompetent militarism where more and more money results in bigger and bigger military fiascos around the world and less and less of actual foreign policy that can be pursued or articulated. There are massive levels of corruption. The amount of money that is being stolen by the U.S. Government and its various appropriations processes is now in the trillions of dollars a year. Runaway debt, the United States now has a level of debt that is un-repayable. All we’re waiting for is interest rates to go across the magic threshold of 3% and the entire budget of the country explodes. There are also all types of other tendencies that point in the direction of collapse and systemic failure at all levels.”
So, how close are we to collapse or system failure? Orlov contends, “I am pretty sure that anyone who makes a prediction when the collapse will happen is wrong. Nobody can say when it will happen. It’s the same as saying a bridge that is structurally deficient; you don’t know when a truck is going to fall through into the river below. . . . You can be chronically sick for a long time, and then one day, you go into a coma or your heart stops. You cannot predict what day that will happen. Orlov does say, “The United States right now, from my point of view and the point of view from observers from around the world, is on suicide watch. It’s a country that is going to self-destruct at some point in the near future.”
On the Ukraine crisis, Orlov thinks, “The Crimea referendum was the first legal way to find out what the people wanted to do. The turnout was remarkable, and they voted overwhelmingly to rejoin Russia, to become part of Russia once again. The interesting thing here is it was not just the Russians that voted to join Russia but the Ukrainians in Crimea, which makes a sizable part of the population voted to join Russia. . . Ukraine is composed of sort of a no man’s land in the West and then Russian territories in the East. . . . If that trend holds, you are basically left with this insolvent nugget of nothingness, and it will be up to the international community to decide what to do with these people. They are right now marching around Kiev with baseball bats and going into government offices and beating up members of local government and installing their own members. They are basically running amok. They don’t even have the support of the Ukrainian military at this point. So, it will be a mop-up operation against these neo-fascists that are running amok.” Orlov goes on to say, “In Washington, in the Obama Administration and in the Kerry State Department, we have absolutely breathtaking levels of incompetence. These people really don’t know what they’re doing and are dangerous at any speed; and everywhere else, we have this follow the incompetent leader thing taking place, and it’s really, really frightening because the incompetents are leading the world to a really dangerous place.”
Orlov goes on to say, “What are these people doing trash talking the Russians? What would these people do without Russia? How would they get out of earth’s orbit and visit the international space station? Who would negotiate international deals with Syria and Iran because all they can do is blunder and lose face.” Russia doesn’t need the United States for anything. The United States is the most dispensable country on earth.”
On possible war between Ukraine and Russia, Orlov contends, “They are not going to fight because the Ukraine military is part of the Russian military. There really isn’t any opposition. The Ukrainian military will decide what to do in a few days, and then they will inform the Russians, and after that, maybe they will inform their own government. Maybe they will just go into the government offices and just round them up. Last I heard, 60% of Ukrainian military accepted Russian passports already. The remaining parts are being shipped out to the mainland. That is happening peacefully. So, there isn’t going to be any fight. The really important point is the Ukrainian military all over Ukraine does not support the government in Kiev. They are withholding support, and what they really want is to join the Russian military. . . . The best thing Russia can do is sit back and relax and let this work out. I don’t think the government in Kiev has any legs.”
Join Greg Hunter as he goes One-on-One with Dmitry Orlov of ClubOrlov.com coming from Central America.
(There is much more in the video interview.)
After the Interview:
Dmitry Orlov is currently working on a new book that will be out later this year. Orlov says, “The new book is about communities and what makes them resistant to adverse events such as financial collapse.” Orlov adds, “The U.S., as a whole, is not resistant to shocks, but some parts of America are.” You can find Dmitry Orlov at ClubOrlov.com.
ClubOrlov: Is anyone really in control in Ukraine?
ClubOrlov: Is anyone really in control in Ukraine?.
[While everyone is concentrating on the referendum in Crimea, let’s not lose sight of what’s happening in the rest of (formerly independent) Ukraine. As we already know, the government in Kiev is dead broke; the aid that is forthcoming from the US is barely enough to cover its debt to Russia’s Gazprom, for natural gas. Ukraine’s bond yield has spiked to 50% while $15 billion of these bonds mature andhave to be rolled over this year.
A lot has been made of the Russian and Belarussian troops massing all around Ukraine and in Crimea, but so far little has been heard of the state of the military within Ukraine itself. But now it appears that Ukraine’s military (which has never been involved in any armed conflict anywhere and is poorly trained and poorly armed) is mostly on the Russian side already, and, in any case, not willing to follow orders from Kiev. It also appears that the National Guard goon squadsbeing hastily organized by the government in Kiev may be effective at intimidating civilians, but that they won’t be much of a military force.
This information comes from a well-positioned source. There is a Spanish-speaking air traffic controller working at the Borispol International Airport in Kiev, who has been tweetting in Spanish and giving a blow-by-blow account of the goings on in the air and on the ground, along with some useful commentary. What follows is a summary of some of the recent tweets. Many thanks to Francisco for putting it together.
Here is what I see as the best case scenario for Ukraine: Russian and Ukrainian militaries fraternize and merge without a single shot fired, followed by a joint mop-up operation against the nationalist thugs.Once the nationalists’ ability to intimidate the populace is neutralized, the country can be reorganized, ideally as a federative structure that supports local languages, dialects and cultures.]
The Ukrainian military are by and large refusing to follow orders from he government. Many if not the majority of them are incredibly angry. Some generals have openly declared that they will not follow orders from some foreign-imposed government. The chief of the Air Force is a major problem for the government: so far he has flatlyrefused to fly any missions at all, and has grounded all the planes. He says that he will not follow orders except from a freely elected governent. Until such a time, he will follow only his own orders.
In this ATC’s opinion, this attitude within the military is a good thing, because there would already be lots of casualties had they had followed their orders. It looks like at least half, and probably more, of the military feels much more affinity toward their Russian colleages than towards the Ukrainian Nationalists who are nominally in power. The government is frantically trying to recruit and organizea National Guard, with whatever western help they can get. There is no equipment or money in the country.
The problem with this National Guard is that it’s being recruited based on an ideology of nationalistic bigotry and hatred rather than any useful aptitude. The people in Kiev are much more afraid of the nationalists and the National Guard being created than of the military. It appears that the sentiment towards the Russians is in general very friendly, that most Ukrainians consider Russians to be their brothers. The exception is the ultra-nationalistic faction, whichsuperficially seems to be gaining a lot of power through intimidation.
A Gift From The Collapseniks | Peak Oil News and Message Boards
A Gift From The Collapseniks | Peak Oil News and Message Boards.
Of what possible use is it to imagine the end of civilization or even of the species? Is it simply a pessimistic indulgence or can it contribute to progressive and other positive results?
When I was a child, my family’s pastor used to elbow into almost every sermon an admiring reference to “St. John languishing in exile on the rock-bound, sea-girt island of Patmos.” He was referring to the author of the grisly Book of Revelation , the dominant Western source of apocalyptic imagery.
We chuckle at cartoons of robed men on city sidewalks carrying placards that claim, “the end is nigh,” and at bumper stickers that declare, “in case of Rapture, this car will be driverless” (which sounds more dangerous than driving under the influence). Since St. John’s fiery prose, there have been many predictions of the end, including the modern cult studied by social psychologist Leon Festinger in When Prophecy Fails (1956).
Those who see danger tend to accuse others of “denial,” of “refusing to listen.” Perhaps a tincture of denial has given humans an evolutionary advantage. Speaking positively, psychologists refer to “optimism bias.” Most of us tend to imagine that things will turn out better than they do, a common mental pattern studied by such authors as Tali Sharot. While this trait arguably encourages enterprises, some of which succeed, it may also, on occasion, blind us to the possibility of avoidable loss, even terminal loss.
In A Year to Live (1997), Stephen Levine asks readers to pretend they have the awful privilege of knowing when they will die (in 52 weeks) and challenges them to review their histories honestly and to live abundantly in the remaining time. As my wife and I know, from working through Levine’s book with another couple, the result can be an enhancement of life.
During the Cold War, Joanna Macy gave us Despair and Personal Power in the Nuclear Age (1983). Before writing on ecology, on general systems theory, and on hope, Macy taught that a fuller life, including activism, could be approached through uninhibited expression of the deep feelings that led us to be concerned. More recent examples are the grief work of Carolyn Baker, author of Sacred Demise (2009) and Collapsing Consciously (2013) and of Francis Weller, author of Entering the Healing Ground (2012).
Still, it’s going against the grain to ask people to imagine extreme loss. Unlike some so-called primitive groups, our society is not set up for it, apart from isolated workshops. According to both Baker and Weller, working through grief requires the support of a community and the additional safety of a ritual container. For all its virtues, U.S. culture is based more on individuality, the frontier, and risky enterprise, than on mutual support and safe space.
Nonetheless, a growing number of observers of climate change and other trends foresee disaster. We can describe them as collapseniks, a term with a suffix derived from Russian in honor of Dmitri Orlo*, who grew up in St. Petersburg (then Leningrad) and emigrated to the U.S. An engineer, sailor, and writer, Orlov believes that his adopted country will descend into collapse, and that the U.S. is less well prepared than the country where he was raised. If we define collapsenik as an observer who is conscious of the possibility of economic, political, and social collapse and who believes collapse is worth taking seriously, then Orlov has a parade of company, of which I will give chronological highlights at the end of this piece.
There are big differences among collapsenik authors and even in a single author at different times. A spectrum exists, from those who feel we could avoid the worst of climate change by changing our ways substantially (“we’re sleepwalking toward disaster but could conceivably wake up”) to those who believe our species is doomed (“it’s already too late”). For example, scientist Guy McPherson has come to believe that, as a species, we are headed toward “near-term extinction” (niftily abbreviated as NTE).
While pessimists predict NTE, optimists envision the triumph of a progressive politics that would render climate change survivable, perhaps shifting us toward a steady-state economy, slowing the sixth extinction of species, and fostering a network of local and democratic institutions. An optimistic scenario would resonate with what Macy, expressing hope, now calls “The Great Turning.”
In contrast, McPherson argues that it’s already too late for ad equate reform: humans have inadvertently created feedback loops that will keep making the situation worse. For example, the release of methane, caused (in part) by warming of the shallow Arctic ocean and the Siberian and Canadian tundra, will cause more warming because methane is a greenhouse gas even more dangerous than CO2. And so on.
Humans don’t have a very good record of predicting the future, in spite of various divinatory schemes. Whether developments are technological, political, or economic, we have proceeded without reliable forecasts. Given the surprises inherent in complex systems and in technical development, nobody can show that we face certain demise, though we can discuss probabilities.
Could we learn to regard collapse not as a firm prediction but as a scenario worth exploring? After all, the Pentagon has contingency plans for events that are arguably less likely and less devastating.
To return to our original question, what could be the use of taking seriously a scenario of collapse, especially the views that argue that it’s already too late or that changes could help, but probably won’t be made? If we feel grief at what seems to be happening, instead of simply seeming smug in a prediction of certain doom, if we invent ways to lessen the turbulence and create the best that is possible in the new circumstances, if we live intensely instead of habitually, then the scenario of demise might seem no worse than knowing that, as individuals, we each will die. Meanwhile, what are we capable of?
According to Rebecca Solnit’s A Paradise Built in Hell (2010), disasters can bring out the best in people. If the scenario of the collapseniks plays out, we will have opportunities to discover what kind of gardens we can create in the ruins of our present society. So what is the gift? That by responding fully to the scenario, we can meanwhile live more intensely and develop the elements of a society that, under new conditions as they develop, would work.
Now here are the promised examples of recent writers who are aware of the possibility of collapse and who, in various cases, are sketching alternatives. In this century, we’ve been given Tim Flahherty’s The Weather Makers (2001), Richard Heinberg’s The Party’s Over (2003), Jared Diamond’s Collapse (2005), James Howard Kunstler’s The Long Emergency (2005), Clive Hamilton’s A Short History of Progress (2005), Elizabeth Kolbert’s Field Notes from a Catastrophe (2006), George Monbiot’s Heat (2006), another assessment report from the Intergovernmental Panel on Climate Change (IPCC, 2007), James Lovelock’s The Revenge of Gaia (2007), John Michael Greer’s The Long Descent (2008).
And in the past five years: Sharon Astyk and Aaron Newton’s A Nation of Farmers (2009), Hamilton’s Requiem for a Species (2010), Chris Martenson’sThe Crash Course (2011), Guy McPherson’s Walking Away from Empire (2011), Dmitri Orlov’s Reinventing Collapse (2011), Paul Gilding’s The Great Disruption (2012), an even more dire IPCC assessment report (2014), Elizabeth Kolbert’s The Sixth Extinction (2014), and the National Academy of Sciences and the Royal Society, Climate Change: Evidence and Causes (also this year). (With a few exceptions, I have listed only the first book in which each author shows a pervasive awareness of collapse.)
In addition, apart from the writers already listed, many of whom write blogs, you can find many provocative personal and organizational websites, some of which publish several writers, such as Arctic News (Sam Carara), Climate Progress (Joe Romm), Collapse of Industrial Civilization (xraymike 79), Collapsing into Consciousness (Gary Stamper), Culture Change (Jan Lundberg), Dark Mountain Project (Paul Kingsnorth), Grist, How to Save the World (Dave Pollard), Our Finite World (Gail Tverberg), Radio Ecoshock (hosted by Alex Smith), Speaking Truth to Power (articles gathered daily by Carolyn Baker), and Yale Environment 360 (edited by Roger Cohn Sr.).
We should of course judge not by the number of collapseniks, but by the quality of evidence these writers bring. It’s a conversation worth having.
A Gift From The Collapseniks | Peak Oil News and Message Boards
A Gift From The Collapseniks | Peak Oil News and Message Boards.
Of what possible use is it to imagine the end of civilization or even of the species? Is it simply a pessimistic indulgence or can it contribute to progressive and other positive results?
When I was a child, my family’s pastor used to elbow into almost every sermon an admiring reference to “St. John languishing in exile on the rock-bound, sea-girt island of Patmos.” He was referring to the author of the grisly Book of Revelation , the dominant Western source of apocalyptic imagery.
We chuckle at cartoons of robed men on city sidewalks carrying placards that claim, “the end is nigh,” and at bumper stickers that declare, “in case of Rapture, this car will be driverless” (which sounds more dangerous than driving under the influence). Since St. John’s fiery prose, there have been many predictions of the end, including the modern cult studied by social psychologist Leon Festinger in When Prophecy Fails (1956).
Those who see danger tend to accuse others of “denial,” of “refusing to listen.” Perhaps a tincture of denial has given humans an evolutionary advantage. Speaking positively, psychologists refer to “optimism bias.” Most of us tend to imagine that things will turn out better than they do, a common mental pattern studied by such authors as Tali Sharot. While this trait arguably encourages enterprises, some of which succeed, it may also, on occasion, blind us to the possibility of avoidable loss, even terminal loss.
In A Year to Live (1997), Stephen Levine asks readers to pretend they have the awful privilege of knowing when they will die (in 52 weeks) and challenges them to review their histories honestly and to live abundantly in the remaining time. As my wife and I know, from working through Levine’s book with another couple, the result can be an enhancement of life.
During the Cold War, Joanna Macy gave us Despair and Personal Power in the Nuclear Age (1983). Before writing on ecology, on general systems theory, and on hope, Macy taught that a fuller life, including activism, could be approached through uninhibited expression of the deep feelings that led us to be concerned. More recent examples are the grief work of Carolyn Baker, author of Sacred Demise (2009) and Collapsing Consciously (2013) and of Francis Weller, author of Entering the Healing Ground (2012).
Still, it’s going against the grain to ask people to imagine extreme loss. Unlike some so-called primitive groups, our society is not set up for it, apart from isolated workshops. According to both Baker and Weller, working through grief requires the support of a community and the additional safety of a ritual container. For all its virtues, U.S. culture is based more on individuality, the frontier, and risky enterprise, than on mutual support and safe space.
Nonetheless, a growing number of observers of climate change and other trends foresee disaster. We can describe them as collapseniks, a term with a suffix derived from Russian in honor of Dmitri Orlo*, who grew up in St. Petersburg (then Leningrad) and emigrated to the U.S. An engineer, sailor, and writer, Orlov believes that his adopted country will descend into collapse, and that the U.S. is less well prepared than the country where he was raised. If we define collapsenik as an observer who is conscious of the possibility of economic, political, and social collapse and who believes collapse is worth taking seriously, then Orlov has a parade of company, of which I will give chronological highlights at the end of this piece.
There are big differences among collapsenik authors and even in a single author at different times. A spectrum exists, from those who feel we could avoid the worst of climate change by changing our ways substantially (“we’re sleepwalking toward disaster but could conceivably wake up”) to those who believe our species is doomed (“it’s already too late”). For example, scientist Guy McPherson has come to believe that, as a species, we are headed toward “near-term extinction” (niftily abbreviated as NTE).
While pessimists predict NTE, optimists envision the triumph of a progressive politics that would render climate change survivable, perhaps shifting us toward a steady-state economy, slowing the sixth extinction of species, and fostering a network of local and democratic institutions. An optimistic scenario would resonate with what Macy, expressing hope, now calls “The Great Turning.”
In contrast, McPherson argues that it’s already too late for ad equate reform: humans have inadvertently created feedback loops that will keep making the situation worse. For example, the release of methane, caused (in part) by warming of the shallow Arctic ocean and the Siberian and Canadian tundra, will cause more warming because methane is a greenhouse gas even more dangerous than CO2. And so on.
Humans don’t have a very good record of predicting the future, in spite of various divinatory schemes. Whether developments are technological, political, or economic, we have proceeded without reliable forecasts. Given the surprises inherent in complex systems and in technical development, nobody can show that we face certain demise, though we can discuss probabilities.
Could we learn to regard collapse not as a firm prediction but as a scenario worth exploring? After all, the Pentagon has contingency plans for events that are arguably less likely and less devastating.
To return to our original question, what could be the use of taking seriously a scenario of collapse, especially the views that argue that it’s already too late or that changes could help, but probably won’t be made? If we feel grief at what seems to be happening, instead of simply seeming smug in a prediction of certain doom, if we invent ways to lessen the turbulence and create the best that is possible in the new circumstances, if we live intensely instead of habitually, then the scenario of demise might seem no worse than knowing that, as individuals, we each will die. Meanwhile, what are we capable of?
According to Rebecca Solnit’s A Paradise Built in Hell (2010), disasters can bring out the best in people. If the scenario of the collapseniks plays out, we will have opportunities to discover what kind of gardens we can create in the ruins of our present society. So what is the gift? That by responding fully to the scenario, we can meanwhile live more intensely and develop the elements of a society that, under new conditions as they develop, would work.
Now here are the promised examples of recent writers who are aware of the possibility of collapse and who, in various cases, are sketching alternatives. In this century, we’ve been given Tim Flahherty’s The Weather Makers (2001), Richard Heinberg’s The Party’s Over (2003), Jared Diamond’s Collapse (2005), James Howard Kunstler’s The Long Emergency (2005), Clive Hamilton’s A Short History of Progress (2005), Elizabeth Kolbert’s Field Notes from a Catastrophe (2006), George Monbiot’s Heat (2006), another assessment report from the Intergovernmental Panel on Climate Change (IPCC, 2007), James Lovelock’s The Revenge of Gaia (2007), John Michael Greer’s The Long Descent (2008).
And in the past five years: Sharon Astyk and Aaron Newton’s A Nation of Farmers (2009), Hamilton’s Requiem for a Species (2010), Chris Martenson’sThe Crash Course (2011), Guy McPherson’s Walking Away from Empire (2011), Dmitri Orlov’s Reinventing Collapse (2011), Paul Gilding’s The Great Disruption (2012), an even more dire IPCC assessment report (2014), Elizabeth Kolbert’s The Sixth Extinction (2014), and the National Academy of Sciences and the Royal Society, Climate Change: Evidence and Causes (also this year). (With a few exceptions, I have listed only the first book in which each author shows a pervasive awareness of collapse.)
In addition, apart from the writers already listed, many of whom write blogs, you can find many provocative personal and organizational websites, some of which publish several writers, such as Arctic News (Sam Carara), Climate Progress (Joe Romm), Collapse of Industrial Civilization (xraymike 79), Collapsing into Consciousness (Gary Stamper), Culture Change (Jan Lundberg), Dark Mountain Project (Paul Kingsnorth), Grist, How to Save the World (Dave Pollard), Our Finite World (Gail Tverberg), Radio Ecoshock (hosted by Alex Smith), Speaking Truth to Power (articles gathered daily by Carolyn Baker), and Yale Environment 360 (edited by Roger Cohn Sr.).
We should of course judge not by the number of collapseniks, but by the quality of evidence these writers bring. It’s a conversation worth having.
Forecast 2014 — Burning Down the House | KUNSTLER
Forecast 2014 — Burning Down the House | KUNSTLER.
Many of us in the Long Emergency crowd and like-minded brother-and-sisterhoods remain perplexed by the amazing stasis in our national life, despite the gathering tsunami of forces arrayed to rock our economy, our culture, and our politics. Nothing has yielded to these forces already in motion, so far. Nothing changes, nothing gives, yet. It’s like being buried alive in Jell-O. It’s embarrassing to appear so out-of-tune with the consensus, but we persevere like good soldiers in a just war.
Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations.
Life in the USA is like living in a broken-down, cob-jobbed, vermin-infested house that needs to be gutted, disinfected, and rebuilt — with the hope that it might come out of the restoration process retaining the better qualities of our heritage. Some of us are anxious to get on with the job, to expel all the rats, bats, bedbugs, roaches, and lice, tear out the stinking shag carpet and the moldy sheet-rock, rip off the crappy plastic siding, and start rebuilding along lines that are consistent with the demands of the future — namely, the reality of capital and material resource scarcity. But it has been apparent for a while that the current owners of the house would prefer to let it fall down, or burn down rather than renovate.
Some of us now take that outcome for granted and are left to speculate on how it will play out. These issues were the subjects of my recent non-fiction books, The Long Emergency and Too Much Magic (as well as excellent similar books by Richard Heinberg, John Michael Greer, Dmitry Orlov, and others). They describe the conditions at the end of the cheap energy techno-industrial phase of history and they laid out a conjectural sequence of outcomes that might be stated in shorthand as collapse and re-set. I think the delay in the onset of epochal change can be explained pretty simply. As the peak oil story gained traction around 2005, and was followed (as predicted) by a financial crisis, the established order fought back for its survival, utilizing its remaining dwindling capital and the tremendous inertia of its own gigantic scale, to give the appearance of vitality at all costs.
At the heart of the matter was (and continues to be) the relationship between energy and economic growth. Without increasing supplies of cheap energy, economic growth — as we have known it for a couple of centuries — does not happen anymore. At the center of the economic growth question is credit. Without continued growth, credit can’t be repaid, and new credit cannot be issued honestly — that is, with reasonable assurance of repayment — making it worthless. So, old debt goes bad and the new debt is generated knowing that it is worthless. To complicate matters, the new worthless debt is issued to pay the interest on the old debt, to maintain the pretense that it is not going bad. And then all kinds of dishonest side rackets are run around this central credit racket — shadow banking, “innovative” securities (i.e. new kinds of frauds and swindles, CDOs CDSs, etc.), flash trading, insider flimflams, pump-and-dumps, naked shorts, etc. These games give the impression of an economy that seems to work. But the reported “growth” is phony, a concoction of overcooked statistics and wishful thinking. And the net effect moves the society as a whole in the direction of more destructive ultimate failure.
Now, a number of stories have been employed lately to keep all these rackets going — or, at least, keep up the morale of the swindled masses. They issue from the corporations, government agencies, and a lazy, wishful media. Their purpose is to prop up the lie that the dying economy of yesteryear is alive and well, and can continue “normal” operation indefinitely. Here are the favorites of the past year:
- Shale oil and gas amount to an “energy renaissance” that will keep supplies of affordable fossil fuels flowing indefinitely, will make us “energy independent,” and will make us “a bigger producer than Saudi Arabia.” This is all mendacious bullshit with a wishful thinking cherry on top. Here’s how shale oil is different from conventional oil:
- A “manufacturing renaissance” is underway in the US, especially in the “central corridor” running from Texas north to Minnesota. That hoopla is all about a few chemical plants and fertilizer factories that have reopened to take advantage of cheaper natural gas. Note, the shale gas story is much like the shale oil story in terms of drilling and production. The depletion rates are quick and epic. In a very few years, shale gas won’t be cheap anymore. Otherwise, current talk of new manufacturing for hard goods is all about robots. How many Americans will be employed in these factories? And what about the existing manufacturing over-capacity everywhere else in the world? Are we making enough sneakers and Justin Beiber dolls? File under complete fucking nonsense.
- The USA is “the cleanest shirt in the laundry basket,” “the best house in a bad neighborhood,” the safest harbor for international “liquidity,” making it a sure bet that both the equity and bond markets will continue to ratchet up as money seeking lower risk floods in to the Dow and S & P from other countries with dodgier economies and sicker banks. In a currency war, with all nations competitively depreciating their currencies, gaming interest rates, manipulating markets, falsely reporting numbers, hiding liabilities, backstopping bad banks, and failing to regulate banking crime, there are no safe harbors. The USA can pretend to be for a while and then that illusion will pop, along with the “asset” bubbles that inspire it.
- The USA is enjoying huge gains from fantastic new “efficiencies of technological innovation.” The truth is not so dazzling. Computer technology, produces diminishing returns and unanticipated consequences. The server farms are huge energy sinks. Online shopping corrodes the resilience of commercial networks when only a few giant companies remain standing; and so on. Problems like these recall the central collapse theory of Joseph Tainterwhich states that heaping additional complexity on dysfunctional hyper-complex societies tends to induce their collapse. Hence, my insistence that downscaling, simplifying, re-localizing and re-setting the systems we depend on are imperative to keep the project of civilization going. That is, if you prefer civilization to its known alternatives.
Notice that all of these stories want to put over the general impression that the status quo is alive and well. They’re based on the dumb idea that the stock markets are a proxy for the economy, so if the Standard & Poor’s 500 keeps on going up, it’s all good. The master wish running through the American zeitgeist these days is that we might be able to keep driving to Wal-Mart forever.
The truth is that we still have a huge, deadly energy problem. Shale oil is not cheap oil, and it will stop seeming abundant soon. If the price of oil goes much above $100 a barrel, which you’d think would be great for the oil companies, it will crash demand for oil. If it crashes demand, the price will go down, hurting the profitability of the shale oil companies. It’s quite a predicament. Right now, in the $90-100-a-barrel range, it’s just slowly bleeding the economy while barely allowing the shale oil producers to keep up all the drilling. Two-thirds of all the dollars invested (more than $120 billion a year) goes just to keep production levels flat. Blogger Mark Anthonysummarized it nicely:
…the shale oil and gas developers tend to use unreliable production models to project unrealistically high EURs (Estimated Ultimate Recovery) of their shale wells. They then use the over-estimated EURs to under-calculate the amortization costs of the capital spending, in order to report “profits”, despite of the fact that they have to keep borrowing more money to keep drilling new wells, and that capital spending routinely out paces revenue stream by several times… shale oil and gas producers tend to over-exaggerate productivity of their wells, under-estimate the well declines…in order to pitch their investment case to banks and investors, so they can keep borrowing more money to keep drilling shale wells.
As stated in the intro, these perversities reverberate in the investment sector. Non-cheap oil upsets the mechanisms of capital formation — financial growth is stymied — in a way that ultimately affects the financing of oil production itself. Old credit cannot be repaid, scaring off new credit (because it is even more unlikely to be repaid). At ZIRP interest, nobody saves. The capital pools dry up. So the Federal Reserve has to issue ersatz credit dollars on its computers. That credit will remain stillborn and mummified in depository institutions afraid of lending it to the likes of sharpies and hypesters in the shale gas industry.
But real, functioning capital (credit that can be paid back) is vanishing, and the coming scarcity of real capital makes it much more difficult to keep the stupendous number of rigs busy drilling and fracking new shale oil wells, which you have to do incessantly to keep production up, and as the investment in new drilling declines, and the “sweet spots” yield to the less-sweet spots or the not-sweet-at-all spots… then the Ponzis of shale oil and shale gas, too will be unmasked as the jive endeavors they are. And when people stop believing these cockamamie stories, the truth will dawn on them that we are in a predicament where further growth and wealth cannot be generated and the economy is actually in the early stages of a permanent contraction, and that will trigger an unholy host of nasty consequences proceeding from the loss of faith in these fairy tales, going so far as the meltdown of the banking system, social turmoil, and political upheaval.
The bottom line is that the “shale revolution” will be short-lived. 2014 may be the peak production year in the Bakken play of North Dakota. Eagle Ford in Texas is a little younger and may lag Bakken by a couple of years. If Federal Reserve policies create more disorder in the banking system this year, investment for shale will dry up, new drilling will nosedive, and shale oil production will go down substantially. Meanwhile. conventional oil production in the USA continues to decline remorselessly.
The End of Fed Cred
It must be scary to be a Federal Reserve governor. You have to pretend that you know what you’re doing when, in fact, Fed policy appears completely divorced from any sense of consequence, or cause-and-effect, or reality — and if it turns out you’re not so smart, and your policies and interventions undermine true economic resilience, then the scuttling of the most powerful civilization in the history of the world might be your fault — even if you went to Andover and wear tortoise-shell glasses that make you appear to be smart.
The Fed painted itself into a corner the last few years by making Quantitative Easing a permanent feature of the financial landscape. QE backstops everything now. Tragically, additional backdoor backstopping extends beyond the QE official figures (as of December 2013) of $85 billion a month. American money (or credit) is being shoveled into anything and everything, including foreign banks and probably foreign treasuries. It’s just another facet of the prevailing pervasive dishonesty infecting the system that we have no idea, really, how much money is being shoveled and sprinkled around. Anything goes and nothing matters. However, since there is an official consensus that you can’t keep QE money-pumping up forever, the Fed officially made a big show of seeking to begin ending it. So in the Spring of 2013 they announced their intention to “taper” their purchases of US Treasury paper and mortgage paper, possibly in the fall.
Well, it turned out they didn’t or couldn’t taper. As the fall equinox approached, with everyone keenly anticipating the first dose of taper, the equity markets wobbled and the interest rate on the 10-year treasury — the index for mortgage loans and car loans — climbed to 3.00 percent from its May low of 1.63 — well over 100 basis points — and the Fed chickened out. No September taper. Fake out. So, the markets relaxed, the interest rate on the 10-year went back down, and the equity markets resumed their grand ramp into the Christmas climax. However, the Fed’s credibility took a hit, especially after all their confabulating bullshit “forward guidance” in the spring and summer when they couldn’t get their taper story straight. And in the meantime, the Larry-Summers-for-Fed-Chair float unfloated, and Janet Yellen was officially picked to succeed Ben Bernanke, with her reputation as an extreme easy money softie (more QE, more ZIRP), and a bunch of hearings were staged to make the Bernanke-Yellen transition look more reassuring.
And then on December 18, outgoing chair Bernanke announced, with much fanfare, that the taper would happen after all, early in the first quarter of 2014 — after he is safely out of his office in the Eccles building and back in his bomb shelter on the Princeton campus. The Fed meant it this time, the public was given to understand.
The only catch here, as I write, after the latest taper announcement, is that interest on the 10-year treasury note has crept stealthily back up over 3 percent. Wuh-oh. Not a good sign, since it means more expensive mortgages and car loans, which happen to represent the two things that the current economy relies on to appear “normal.” (House sales and car sales = normal in a suburban sprawl economy.)
I think the truth is the Fed just did too darn much QE and ZIRP and they waited way too long to cut it out, and now they can’t end it without scuttling both the stock and bond markets. But they can’t really go forward with the taper, either. A rock and a hard place. So, my guess is that they’ll pretend to taper in March, and then they’ll just as quickly un-taper. Note the curious report out of the American Enterprise Institute ten days ago by John H. Makin saying that the Fed’s actual purchase of debt paper amounted to an average $94 billion a month through the year 2013, not $85 billion. Which would pretty much negate the proposed taper of $5 billion + $5 billion (Treasury paper + Mortgage paper).
And in so faking and so doing they may succeed in completely destroying the credibility of the Federal Reserve. When that happens, capital will be disappearing so efficiently that the USA will find itself in a compressive deflationary spiral — because that’s what happens when faith in the authority behind credit is destroyed, and new loans to cover the interest on old loans are no longer offered in the non-government banking system, and old loans can’t be serviced. At which point the Federal Reserve freaks out and announces new extra-special QE way above the former 2013 level of $85 billion a month, and the government chips in with currency controls. And that sets in motion the awful prospect of the dreaded “crack-up boom” into extraordinary inflation, when dollars turn into hot potatoes and people can’t get rid of them fast enough. Well, is that going to happen this year? It depends on how spooked the Fed gets. In any case, there is a difference between high inflation and hyper-inflation. High inflation is bad enough to provoke socio-political convulsion. I don’t really see how the Fed gets around this March taper bid without falling into the trap I’ve just outlined. It wouldn’t be a pretty situation for poor Ms. Janet Yellen, but nobody forced her to take the job, and she’s had the look all along of a chump, the perfect sucker to be left holding a big honking bag of flop.
We’re long overdue for a return to realistic pricing in all markets. The Government and its handmaiden, the Fed, have tweaked the machinery so strenuously for so long that these efforts have entered the wilderness of diminishing returns. Instead of propping up the markets, all they can accomplish now is further erosion of the credibility of the equity markets and the Fed itself — and that bodes darkly for a money system that is essentially run on faith. I think the indexes have topped. The “margin” (money borrowed to buy stock) in the system is at dangerous, historically unprecedented highs. There may be one final reach upward in the first quarter. Then the equities crater, if not sooner. I still think the Dow and S &P could oversell by 90 percent of their value if the falsehoods of the post-2008 interventions stopped working their hoodoo on the collective wishful consciousness.
The worldwide rise in interest rates holds every possibility for igniting a shitstorm in interest rate swaps and upsetting the whole apple-cart of shadow banking and derivatives. That would be a bullet in the head to the TBTF banks, and would therefore lead to a worldwide crisis. In that event, the eventual winners would be the largest holders of gold, who could claim to offer the world a trustworthy gold-backed currency, especially for transactions in vital resources like oil. That would, of course, be China. The process would be awfully disorderly and fraught with political animus. Given the fact that China’s own balance sheet is hopelessly non-transparent and part-and-parcel of a dishonest crony banking system, China would have to use some powerful smoke-and-mirrors to assume that kind of dominant authority. But in the end, it comes down to who has the real goods, and who screwed up (the USA, Europe, Japan) and China, for all its faults and perversities, has the gold.
The wholesale transfer of gold tonnage from the West to the East was one of the salient events of 2013. There were lots of conspiracy theories as to what drove the price of gold down by 28 percent. I do think the painful move was partly a cyclical correction following the decade-long run up to $1900 an ounce. Within that cyclical correction, there was a lot of room for the so-called “bullion banks” to pound the gold and silver prices down with their shorting orgy. Numerous times the past year, somebody had laid a fat finger on the “sell” key, like, at four o’clock in the morning New York time when no traders were in their offices, and the record of those weird transactions is plain to see in the daily charts. My own theory is that an effort was made — in effect, a policy — to suppress the gold price via collusion between the Fed, the US Treasury, the bullion banks, and China, as a way to allow China to accumulate gold to offset the anticipated loss of value in the US Treasury paper held by them, throwing China a big golden bone, so to speak — in other words, to keep China from getting hugely pissed off. The gold crash had the happy effect for the US Treasury of making the dollar appear strong at a time when many other nations were getting sick of US dollar domination, especially in the oil markets, and were threatening to instigate a new currency regime by hook or by crook. Throwing China the golden bone is also consistent with the USA’s official position that gold is a meaningless barbaric relic where national currencies are concerned, and therefore nobody but the barbaric yellow hordes of Asia would care about it.
Other nations don’t feel that way. Russia and Switzerland have been accumulating gold like crazy at bargain prices this year. Lat year, Germany requested its sovereign gold cache (300 tons) to be returned from the vaults in America, where it was stored through all the decades of the cold war, safe from the reach of the Soviets. But American officials told the Germans it would take seven years to accomplish the return. Seven years ! ! ! WTF? Is there a shortage of banana boats? The sentiment in goldville is that the USA long ago “leased” or sold off or rehypothecated or lost that gold. Anyway, Germany’s 300 tons was a small fraction of the 6,700 tons supposedly held in the Fed’s vaults. Who knows? No auditors have been allowed into the Fed vaults to actually see what’s up with the collateral. This in and of itself ought to make the prudent nervous.
I think we’re near the end of these reindeer games with gold, largely because so many vaults in the West have been emptied. That places constraints on further shenanigans in the paper gold (and silver) markets. In an environment where both the destructive forces of deflation and inflation can be unleashed in sequence, uncertainty is the greatest motivator, trumping the usual greed and fear seen in markets that can be fairly measured against stable currencies. In 2014, the public has become aware of the bank “bail-in” phenomenon which, along with rehypothication schemes, just amounts to the seizure of customer and client accounts — a really new wrinkle in contemporary banking relations. Nobody knows if it’s safe to park cash money anywhere except inside the mattress. The precedent set in Cyprus, and the MF Global affair, and other confiscation events, would tend to support an interest in precious metals held outside the institutional framework. Uncertainty rules.
Miscellany
I get a lot of email on the subject of Bitcoin. Here’s how I feel about it.
It’s an even more abstract form of “money” than fiat currencies or securities based on fiat currencies. Do we need more abstraction in our economic lives? I don’t think so. I believe the trend will be toward what is real. For the moment, Bitcoin seems to be enjoying some success as it beats back successive crashes. I’m not very comfortable with the idea of investing in an algorithm. I don’t see how it is impervious to government hacking. In fact, I’d bet that somewhere in the DOD or the NSA or the CIA right now some nerd is working on that. Bitcoin is provoking imitators, other new computer “currencies.” Why would Bitcoin necessarily enjoy dominance? And how many competing algorithmic currencies can the world stand? Wouldn’t that defeat the whole purpose of an alternative “go to” currency? All I can say is that I’m not buying Bitcoins.
Will ObamaCare crash and burn. It’s not doing very well so far. In fact, it’s a poster-child for Murphy’s Law (Anything that can go wrong, will go wrong). I suppose the primary question is whether they can enroll enough healthy young people to correct the actuarial nightmare that health insurance has become. That’s not looking so good either now. But really, how can anyone trust a law that was written by the insurance companies and the pharmaceutical industry? And how can it be repealed when so many individuals, groups, companies, have already lost their pre-ObamaCare policies? What is there to go back to? Therefore, I’d have to predict turmoil in the health care system for 2014. The failure to resolve the inadequacies of ObamaCare also may be a prime symptom of the increasing impotence of the federal government to accomplish anything. That failure would prompt an even faster downscaling of governance as states, counties, communities, and individuals realize that they are on their own.
Sorry to skip around, but a few stray words about the state of American culture. Outside the capitals of the “one percent” — Manhattan, San Francisco, Boston, Washington, etc. — American material culture is in spectacular disrepair. Car culture and chain store tyranny have destroyed the physical fabric of our communities and wrecked social relations. These days, a successful Main Street is one that has a wig shop and a check-cashing office. It is sickening to see what we have become. Our popular entertainments are just what you would design to produce a programmed population of criminals and sex offenders. The spectacle of the way our people look —overfed, tattooed, pierced, clothed in the raiment of clowns — suggests an end-of-empire zeitgeist more disturbing than a Fellini movie. The fact is, it simply mirrors the way we act, our gross, barbaric collective demeanor. A walk down any airport concourse makes the Barnum & Bailey freak shows of yore look quaint. In short, the rot throughout our national life is so conspicuous that a fair assessment would be that we are a wicked people who deserve to be punished.
Elsewhere in the World
Globalism, in the Tom Friedman euphoric sense, is unwinding. Currency wars are wearing down the players, conflicts and tensions are breaking out where before there were only Wal-Mart share price triumphs and Foxconn profits. Both American and European middle-classes are too exhausted financially to continue the consumer orgy of the early millennium. The trade imbalances are horrific. Unpayable debt saturates everything. Sick economies will weigh down commodity prices except for food-related things. The planet Earth has probably reached peak food production, including peak fertilizer. Supplies of grain will be inadequate in 2014 to feed the still-expanding masses of the poor places in the world.
The nervous calm in finance and economies since 2008 has its mirror in the relative calm of the political scene. Uprisings and skirmishes have broken out, but nothing that so far threatens the peace between great powers. There have been the now-historic revolts in Egypt, Libya, Syria, and other Middle East and North African (MENA) states. Iraq is once again disintegrating after a decade of American “nation-building.” Greece is falling apart. Spain and Italy should be falling apart but haven’t yet. France is sinking into bankruptcy. The UK is in on the grift with the USA and insulated from the Euro, but the British Isles are way over-populated with a volatile multi-ethnic mix and not much of an economy outside the financial district of London. There were riots in — of all places — Sweden this year. Turkey entered crisis just a few weeks ago along with Ukraine.
I predict more colorful political strife in Europe this year, boots in the street, barricades, gunfire, and bombs. The populations of these countries will want relief measures from their national governments, but the sad news is that these governments are broke, so austerity seems to be the order of the day no matter what. I think this will prod incipient revolts in a rightward nationalist direction. If it was up to Marine LePen’s rising National Front party, they would solve the employment problem by expelling all the recent immigrants — though the mere attempt would probably provoke widespread race war in France.
The quarrel between China and Japan over the Senkaku Islands is a diversion from the real action in the South China Sea, said to hold large underwater petroleum reserves. China is the world’s second greatest oil importer. Their economy and the credibility of its non-elected government depends on keeping the oil supply up. They are a long way from other places in the world where oil comes from, hence their eagerness to secure and dominate the South China Sea. The idea is that China would make a fuss over the Senkaku group, get Japan and the US to the negotiating table, and cede the dispute over them to Japan in exchange for Japan and the US supporting China’s claims in the South China Sea against the other neighbors there: Vietnam, Indonesia, Malaysia, and the Philippines.
The catch is that Japan may be going politically insane just now between the rigors of (Shinzo) Abenomics and the mystical horrors of Fukushima. Japan’s distress appears to be provoking a new mood of nationalist militarism of a kind not seen there since the 1940s. They’re talking about arming up, rewriting the pacifist articles in their constitution. Scary, if you have a memory of the mid-20th century. China should know something about national psychotic breaks, having not so long ago endured the insanity of Mao Zedong’s Cultural Revolution (1966-71). So they might want to handle Japan with care. On the other hand, China surely nurtures a deep, deadly grudge over the crimes perpetrated by Japan in the Second World War, and now has a disciplined, world-class military, and so maybe they would like to kick Japan’s ass. It’s a hard one to call. I suspect that in 2014, the ball is in Japan’s court. What will they do? If the US doesn’t stay out of the way of that action, then we are insane, too.
That said, I stick by my story from last year’s forecast: Japan’s ultimate destination is to “go medieval.” They’re never going to recover from Fukushima, their economy is unraveling, they have no fossil fuels of their own and have to import everything, and their balance of payments is completely out of whack. The best course for them will be to just throw in the towel on modernity. Everybody else is headed that way, too, eventually, so Japan might as well get there first and set a good example.
By “go medieval” I mean re-set to a pre-industrial World Made By Hand level of operation. I’m sure that outcome seems laughably implausible to most readers, but I maintain that both the human race and the planet Earth need a “time out” from the ravages of “progress,” and circumstances are going to force the issue anyway, so we might as well kick back and get with the program: go local, downscale, learn useful skills, cultivate our gardens, get to know our neighbors, learn how to play a musical instrument, work, dine, and dance with our friends.
As it happens, the third in the series of my World Made By Hand novels, set in upstate New York in the post-collapse economy, will be published in September by the Atlantic Monthly Press. It’s a ripping yarn. Whether anyone will have enough money to buy a copy, I can’t predict. Happy 2014, Everybody!
New Features this week at kunstler.com:
Jim’s Garden Report, 2013
Jim’s New Paintings, 2011-2013
Published as an E-book for the first time!
The 20th Anniversary edition
With an entertaining new introduction by the author
Collapse of Trust and Faith in the System
Collapse of Trust and Faith in the System
I began reading Dimitry Orlov’s recent publication, The Five Stages of Collapse: Survivors’ Toolkit, last week and it has got me thinking about his thesis with respect to the revelations around the U.S. surveillance system being used globally by the-powers-that-be (both corporate and political), in combination with the ongoing exposure of manipulation of various markets and interest rates.
Orlov argues that “my five stages of collapse…serve as mental milestones…[and each breaches] a specific level of trust or faith in the status quo. Although each stage causes physical, observable changes in the environment, these can be gradual, while the mental flip is generally quite swift” (p. 14).
Here are his five stages:
a) Financial collapse where faith in risk assessment and financial guarantees is lost (think Cyprus).
b) Commercial collapse that witnesses a breakdown in trade and widespread shortages of necessities (think Greece).
c) Political collapse through a loss of political class relevance and legitimacy (think current events almost everywhere).
d) Social collapse in which social institutions that could provide resources fail (coming to a locality near you?).
e) Cultural collapse that is exhibited by the disbanding of families into individuals competing for scarce resources (hopefully we never witness this).
Stage One: Financial Collapse
Orlov states “all that is required for financial collapse is for certain assumptions about the future to be invalidated, for finance is not a physical system but a mental construct” (p. 17). It would appear that we are well into this first stage as more and more people are questioning not only the stability of the financial system, but its very structure and long-term viability.
The subprime mortgage crisis of 2008 has left lingering concerns about the fragility of the global economic system. Add to this the ongoing manipulation of global interest rates and markets that has been exposed (see this). This manipulation has little to do with improving a system for the majority but has a lot to do with enriching the elite minority and transferring wealth to them from the majority (see this and this). Add to this the ever-increasing liquidity injections (i.e. money printing) by the world’s central banks (see this) and the theft of allocated funds by unprosecuted criminals (see this) and we have a recipe for increased loss of trust throughout the global financial system. In fact, there are many who have already lost complete faith in the system and recommend disinvesting one’s savings from these corrupt institutions and investing in hard assets (i.e. gold, silver, agricultural land, art, memorabilia, farming supplies, wine, etc.) that maintain or increase their value over time relative to the government-mandated fiat currency which loses its worth due to central bank malfeasance-inflation (see this and this).
Stage Two: Commercial Collapse
A breakdown in trade is beginning as more and more sovereign nations impose tariffs and/or devalue their currency in a vicious circle: currency devaluation leads to increase in exports for the ‘devaluer’ but a decrease for competitors-it’s a zero sum game after all); the competitor either devalues their currency in kind (see this and this) or imposes tariffs on the nation engaging in purposeful devaluation (see this).
In Greece, a peripheral nation within the Eurozone and a test case for extreme austerity, this type of collapse has occurred in regions, resulting in shortages of necessities such as pharmaceuticals, energy, and food (see this and this).
Stage Three: Political Collapse
I believe we have begun down this path with evermore revelations of government malfeasance. The latest salvo in this ongoing struggle between what we are told by our governments and what is the on-the-ground reality has been launched: the American National Security Agency’s decade+ invasion of privacy through a global surveillance regime. It’s bad enough that the elite have lied about this for more than a decade; what’s worse is their targeting of whistleblowers as ‘traitors’ as this de-incentivises exposing immoral or illegal acts perpetrated by our elite (see this).
We are moving ever closer to Orwell’s vision of a totalitarian world as expressed in his book 1984. One commentator has argued that 1984 was not designed to be an instruction manual but a warning (see this), and others have been warning about this type of intrusion for some years (see this).
There are numerous examples of political malfeasance and corruption being uncovered recently. For example:
a) Toronto mayor videotaped participating with others smoking crack cocaine (see this);
b) America’s National Security Agency’s creation of a global, electronic surveillance state-apparently even used to eavesdrop on other nations’ leaders at meetings (see this);
c) Montreal mayor arrested for corruption (see this);
d) Numerous former presidents/prime ministers/etc. being arrested/charged for various crimes from torture to murder (see this, this, this, and this)
e) The current and former premier of Ontario being linked to decisions cancelling gas plants to save political seats during an election (see this).
Using Orlov’s framework to interpret these concerns, arguments, perspectives, and facts, it would appear that trust and faith in the various systems are collapsing at an incredible rate. Faith in the financial system is crumbling; commercial enterprises, especially multinational corporations, are losing support and trade barriers are beginning to be erected; and, finally, all that is needed for political collapse is for more citizens to come to the realisation that the status quo is no longer working for the benefit of all but for the benefit of the elite. When the masses finally come to better understand the corruption and malfeasance that percolates throughout the political world, collapse of the political class will occur.
However, even given the various signs that the system is on the verge of collapse, it is important to realise that NO ONE can predict when this might occur. It could be tomorrow, next week, next year, or next decade…one never knows what event, minor or major, could spin us in an unexpected direction. Learn how to protect yourself and your family financially, socially, and practically (i.e. survival skills) to be in a better position to adapt to the coming changes.