Think space: crystal ball gazing

27 Dec

I have been interested to see that two of The Atlantic Monthly’s writers – James Fallows and Andrew Sullivan – both cite a blog by a Canadian, Robert Paterson of Prince Edward Island (PEI), this month. In particular they refer to this entry.

  • That there is no soft landing. We are not in a recession. We are not even in a depression. We are at the end of an era. The Tipping Point is of course the financial collapse. The Vast Ponzi Scheme of our financial world – with the vast sums in the Derivative Market and the Credit Bubble all in effect lost – cannot be saved. There is not enough money in the national accounts to pull this back.
  • The search for efficiency and the urge to consume has set us all up like a row of dominoes – there is no buffer, no resiliency. As one problem rises it causes another. As one solution is tried it drives another problem. We all pull back and the consumer economy stalls. The auto industry and credit firms feeds the media (40% of conventional advertising). Papers and TV and Radio networks, many subject to LBO’s will have to fail as per the Tribune. Every sector will be laying people off. Sales of all things fall off a cliff – driving more business failures and layoffs. Cities and states that depend on sales tax and property tax and the credit markets can rely on none of these. So they too will have to lay off millions – thus making all the problems worse. National governments will be asked to save us all and of course cannot. As States and Cities get squeezed and cannot borrow, they will too lay off millions – teachers, firemen police. No one will be safe…
  • The world food system is exceptionally connected and tightly coupled. High fertilizer prices in 2008 will drive a food shortage in 2009. Inventories of grain are already low. The collapse of commerce and credit may risk food supplies in 2009. The 2008 rice problem was a harbinger for what is to come…
  • Coupling – the issue is that with everything so fragile – even broken – that problems that we could have stood up too become major or even overwhelming.
  • The problem is our mindset – the Newtonian Machine view of reality. It has outlived its value and become its dark side. We have given up all our power to it and those who control it could not help themselves from looting it…
  • That the leadership model is no longer the dominant hero but the ego-less servant…

James Fallows notes:

This is very close to what I was trying to explain three and a half years ago in my "Countdown to a Meltdown" imagined-history article in the Atlantic. The way that everything really is connected — I recently saw a school in southern China that will be in trouble because its donors are losing money through the Madoff fraud in New York  — and that no one has "any buffer, any resiliency" is something we’ve known in theory but are only now comprehending in its daily, cascading reality. It’s worth looking at the summary for similarly uplifting thoughts. 

“Countdown to a Meltdown” (2005) makes interesting reading today. It is subtitled January 20, 2016, Master Strategy Memo: Subject: The Coming Year—and Beyond.

In retrospect, the ugly end is so obvious and inevitable. Why didn’t people see it at the time? The same clearly applies to what happened in 2009. Economists had laid out the sequence of causes and effects in a "hard landing," and it worked just as they said it would.

Happy New Year!

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Posted by on December 27, 2008 in America, blogging, Canada, current affairs, generational change, globalisation/corporations, other blogs, USA


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