It's time to talk honestly about collapse.
We are all aware of the mounting crises around the world. Resource depletion (water, oil, minerals, soil), population pressures, food shortages, pollution, climate change, species extinction, wilderness loss, and so on. It is a long list of challenges which are insurmountable within the current status quo, a status quo which is now being challenged around the world1, but which nevertheless retains a tight grip on financial markets and governments and doesn't look like going away.
In other words, unless the system shifts voluntarily to a new state, it will collapse. This collapse will affect us most, not the elite who reign over us. During the Irish potato famine millions died of starvation, while the rich establishment continued enjoying a lavish lifestyle, thanks to an iron rule – we need to learn the lessons of history to glean an understanding of what to expect. The time-frame for these events are within our lifetimes, and the odds are that before 2030 the world we know will be radically different.
However, there is increasing evidence that conditions may change much sooner than we think, quite possibly within a year or two, and it is this I wish to focus on. A perfect storm of oil scarcity, financial breakdown and crop failures looks set to make 2011 a potentially disastrous year.
The purpose of this mini document is to outline these three factors as they currently stand. I'm open to the idea that I've come to the wrong conclusions. But my conclusion right now is that I think the situation is real enough to warrant immediate action on an individual and human scale.
American Collapse
The United States of America is already well into collapse. About fifty million people are currently dependent on food stamps for food from the government2. Unemployment is rocketing, and currently stands at 10%3 and this doesn't include those who have stopped looking for work, or the vast number of part time low paid workers, which bumps the figure up to a staggering 53%4. Inequality is at record levels5. House prices have crashed 26%, unprecedented in the entire US history, and it's getting worse6. Debt to GDP ratio is completely fucked – the debt is effectively unrepayable7. The apparent cohesion of the US economy is a mirage, a manufactured mirage that will vanish at the slightest tremor. Off the grid economic indicators show very significant increases in firearms, ammo and silver coins by americans8.
Countries are responding. Mexico has flushed its economy of US dollars9. In retaliation, the US is threatening military intervention, on a different pretext as usual10. India has entered into talks with Iran to buy oil in exchange for gold11. The Chinese leader has openly stated that it is time to replace the dollar as the world currency12a. China and Russia have agreed to drop the dollar in bilateral trade12b. These are historic events on their own, with huge potential consequences.
The US dollar is on the brink of complete collapse, and we are in the midst of a global currency war. Prices in gold and silver are skyrocketing as investors increasingly look to buy precious metals to secure their money. Last week JP Morgan announced that they will accept physical gold bullion as collateral13. China is mass buying hundreds of tonnes of gold14, along with India and Germany15a. Events are moving extremely swiftly, dangerously swiftly. We need to be very wide awake, and especially to the threat of a global currency, already being touted15b by the IMF as the 'solution', but which firmly entrenches global power in the hands of a very few unelected and unaccountable individuals. This has long been the ambition of the self styled 'New World Order' clique of powerful individuals.
Even business meathead Donald Trump is joining the bandwagon. Trump says that the U.S. government is broke, that all of their jobs are being shipped overseas, that other nations are heavily taking advantage and that the value of the U.S. dollar is being destroyed.16
America, like the UK and many other countries, is effectively being run by a gang of banking gansters, and is being gutted and stripped of all assets. Authoritarianism is spreading, creeping invasively into our lives. China is the new model of 'democracy'. The establishment know what is coming, and are preparing.
Conspiracy theory, or plain obvious fact?
What happens when the US Dollar collapses?
The US will be lead into a new civil war. Sound crazy? The US establishment (like the UK) has already prepared. FEMA camps cover the nation, and are rapidly stocking up17. Emergency legislation is in place, with an executive to take control which is kept secret even from Congress18. The internet is set to be put under government control with internet kill switches such as used in Egypt. Tunisia and Jordan to quell revolt19. TSA are assuming massive powers20, along with many other government agencies21, the constitution is effectively void22. Industry and capital has already shifted abroad, ready to ransack other nations and continue profiteering.
America is fucked. None of this narrative is on mainstream news, but all of it is happening as we speak, and the fact that it is not on the news is not surprising. Mainstream news has never been about informing people about the world situation, it has always been about control and misinformation on behalf of the establishment, and the establishment have NEVER been elected or accountable.
What happens to the UK economy, an economy mostly dependent on food imports, an economy whose capital is the heart of the financial empire, an economy whose oil and gas industry is in fast decline?
What is the UK establishment planning? Lets talk about the terrorism legislation, the public contingencies act, the public bodies bill, the wave of animal rights arrests, and a whole lot more. A wave of authoritarian measures have flown us by over the last 15 years with little public or political resistance. For what reason is this legislation intended? Is it coincidence that we face a decade of massive resource shortage, civil unrest and a storm of global crises just as these powers are legislated? Do we still think we live in a democracy, or that government is 'on behalf of the people'? Those that think so would do well to remember the speech JFK gave two years before he was assasinated23:
For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence--on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.
Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the Cold War, in short, with a war-time discipline no democracy would ever hope or wish to match.
Alternatively, think about what is happening right now in the UK and USA with a fresh perspective24,25.
Another thing to keep in the back of your mind regarding the world economy, is that around 90% of the money in circulation is debt. We live in a debt based economy. In a debt based economy the money supply must continue growing in order to pay off that debt. That means the economy must grow – the amount of goods and services produced must increase. To produce these goods and services requires energy. That energy is oil. Oil is the lifeblood of the economy. Every 1% increase in oil production equates to a 0.4-0.6% increase in GDP. So oil is important. It is literally what fiat currency is made out of.
So how's the world oil situation shaping up?
The Global Oil Supply
Nowhere is the mainstream silence more deafening than the current global oil predicament. The idea that the establishment 'don't see it coming' is ludicrous. Once you get beyond that, the implications become very serious.
The easy crude oil is gone. Our economy runs on oil, cheap oil. There is no replacement for cheap, crude oil. To justify production of deepwater oil, tar sands and shale the industry needs high oil prices. But if oil gets more expensive, the economy goes into recession—as in the 1970s and in 2008. We’re stuck. If the economy recovers, demand for oil picks up, the price goes up, and we’re back in a recession again26.
According to the IEA, the production from existing fields will decline by 50% by 202027. A mind boggling figure that requires some time to digest. Despite this massive shortfall, the IEA predict that world production will meet demand due to fields yet to be brought online as well as fields yet to be discovered, despite the requirement to find several times the oil capacity of Saudi Arabia to do so.
Those familiar with the IEA will know full well that they have a long history of vastly over inflating figures, and that recent years have seen drastic reduction in oil predictions27. This means that the true picture is almost certainly far worse. In fact, there is every reason to be highly suspicious of the IEA figures, as they effectively show flat production values to 203028. World production has never been flat. The IEA are simply using terms like 'yet to be discovered/yet to be developed oil' in place of 'this is how much oil we don't have' 29,30.
To give just one example of dodgy figures, the IEA predictions are based upon Saudi reserves. These reserves are not verifiable, and are kept confidential by the Saudi's. Since OPEC bases production on reserves, it is in each country's interest to inflate their reserves, in order to maximise production and hence profit. A recent WikiLeaks showed that Dr. Sadad al-Husseini, the former head geologist in charge of exploration for the Saudi oil firm Aramco, had been informing the US that Saudi reserves are overestimated by 40% - 300 billion barrels of oil31. Saudi Arabia is responsible for 35% of world output.
A 50% drop in production from existing fields by 2020 is unprecedented and nothing short of catastrophic. It is worth stating again, each percentage drop in oil production is roughly equivalent to 0.4 – 0.6% world GDP27. The level of discoveries required to meet this shortfall are simply untenable given the historic trend in oil discovery.
What can we expect in the short term?
The price of oil has remained staggeringly high despite the recession, and has recently topped the all important $100 dollars a barrel. Gasoline prices in the USA are at record levels for this time of the year32. It is difficult to find an analyst predicting oil price to be lower than 2010, with many predicting record prices33.
Whilst the supply of oil over the next year or two is difficult to predict, the trend of rising prices is clear and is here to stay. This fact is important when you consider the following graph34:
The price of oil closely follows the price of food, and food prices are critical to the bulk of the world population.
So how's world food production shaping up?
Food
The freak weather experienced globally is truly unprecedented in modern history35 and comes at a time when the financial system is at its weakest, and the oil supply straining.
The weather situation globally is dire and is having, and will continue to have, a huge impact on food production. Quite literally, a perfect storm of freak weather worldwide has hit food production hard. On its own, this would be a difficult situation, and has already led to an outbreak of unrest worldwide. When combined with the financial and oil problems (bearing in mind the previous graph of oil production and food prices), this becomes seriously critical.
The following is a summary of the worldwide situation, focusing on the main food producing regions.
Mexico has experienced the worst freeze in 50 years36, which has affected 80-100% of its food crops. Mexico is a major supplier of food to the US and Canada, and prices there are expected to rise considerably.
Last year Russia, one of the world's major wheat exporters, experienced severe drought and wild fires which devastated its crops and lead to a ban on wheat exports37. This ban is now extended into 201138.
Australia experienced record floods, hailed as one of the country's worst ever natural disasters, which all but completely destroyed the winter wheat harvest.39 This was quickly followed by cyclone yasi, which devastated another of the country's main food growing regions, affecting 80% of banana and sugar crops40.
China, the world's largest producer of wheat, is currently experiencing catastrophic drought across two thirds of its wheat growing area, the worst for 60 years41. The country is expected to increase imports ninefold compared to official projections42. In addition, Australia is China's largest importer of wheat, yet Australia itself has seen freak weather severely damage crops.
In the United States, the forecast for corn stockpiles was slashed by 9 percent on February 9, projecting the tightest supply since the Great Depression43. Many parts of the US are experiencing drought44, though it is thought that it is the use of corn for ethanol that is largely responsible.
Other large regions experiencing freak weather include Pakistan, Southern Afrika and Sri Lanka45, 46, 47, which all experienced biblical flooding events. While I am unsure whether these events will have a significant effect on the global food market, it is certainly not going to mitigate it. What is clear, is that the era of high food prices is here to stay, and that is going to create massive unrest and economic uncertainty around the globe48.
The wildcard in the whole food shortage of course is the unfolding honey bee collapse, upon which a third of global food output depends49.
Unprecedented
The challenges we face are unprecedented in history. Never before has there been a global financial system controlled by a few, a financial system that now, thanks to the Iraq war, has its own standing armies of hundreds of thousands of well equipped troops and which has governments on its payroll, and which no government can stand against. Never before have billions of people been dependent for food on cheap oil. Never before has the rate of ecological destruction and pollution been so complete or so global. Never before have our actions threatened to destabilise the entire world climate – we are literally years away from starting a runaway train of global warming that will bring an end to the bulk of life on this planet.
On the positive side, never before in history have people been so connected through the internet, not only to each other but also to information. We can talk today to people involved in the Egyptian uprising through Facebook. People round the world have a human face, knowledge and information is spreading through populations at lightning speed, all of which is grassroots and without top down control. The effect of this cannot be underestimated. Ten years ago Facebook and google were unheard of, now they are global phenomena with hundreds of millions of people using them daily – the pace of change is incredible. The beginning of 2011 saw protests and uprisings in countries around the world. It will not take long before a Chinese style controlled internet takes form, the doors are already closing fast, so our window of opportunity is narrow.
This is the greatest crisis in history. How many of us are planning lives and futures based on a future that doesn't exist? If we truly knew what was coming, would we still be worried about our pension, or our career, or our holidays abroad, or being embarrassed to talk about it in front of others?
How are we going to respond?
Conclusion
While writing this I came across this useful summary, which acts as a good conclusion:
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PS Human support groups:
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References
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Comments
Hide the following 10 comments
Up and downs have always and will always happen
13.02.2011 21:21
The doomsayers will always be writing stuff like this.
I remember when people said oil was sky rocketing to $200 a barrel when it was above 120. Those same people were saying invest in china its a supercycle. Then those same people said that oil was plummeting to $20 when it was at $40, and that it was going to be a Great Depression!! Idiots
Since there are so many doomsayers like yourself who think the world is going to end, it makes for some very profitable investing (given the markets leaders have doubled/trebled in price since the bottom of the cash).
You mention the USA housing market - yes it is fooked. And that is exactly why i'm buying into several US housing building suppliers (dry walling manufacturers etc) ......... because they are cheap. I'll sit on them for 5+ years and when the housing market recovers I expect the shares to recover too and completely outperform the markets.
Its not rocket science. Buy low (when everyone is shitting it), and then Sell high (when everyone before greedily optimistic). Just prepare to wait for 2-15 years inbetween. But doomsayers like yourself are they type of investers who Buy high (when things look great) and then sell low (because they think the world is going to end)
dofus
Oil is about 2/3 what it used to be.
13.02.2011 21:35
Oil would drop because of a world recession. I think its fair to say we've been out of the recession for quite a while. It also strongly rises when there is trouble in the middle east. You can see this with the recent troubles in Egypt.
Oil was about $145 before crash, plummeted to $40 at the bottom of the crash.
Its about $100 now (3 years later). Considering that the markets are about the same price as before the crash, and yet oil is 2/3 of the price that it was, I think its fair to say its a lot cheaper than it used to be.
I have no idea why gasoline prices are so high. Will have to look into it.
In the UK, its probably green tax - the government is looking for the most palatable taxes that people will take at the moment and we seem to be a nation who are willing to pay this with no real fuss. I think the US is becoming the same so expect them to use green taxes more there too.
dofus
The end of the world is nigh...again!
13.02.2011 22:20
I get the collapse bit but where is the honesty?
America is always collapsing...its what it does best! Talk to me about America, the beating heart of stability and sustainable economics...now that will cause a few pants to be shit into!
No profit to be had in stability you see! In the field of economica americana, stabilty is to growth what leprosy is to skin-care!
Collapse is a constituent ingredient of US industrial Capitalism, Globalisation the by-product the rest of the world is expected to live with.
If we are going to be honest here, what we should be talking about is the fundamentals of collapse as political/commercial ideology and disinformation and how that disinformation is used by America to consolidate relations with other disinformation practitioners like the UK, Israel & other western-centric sympathisers.
Collapse and the narrative of collapse, is simply a socio-political media exploitative tactic used to drive commercial interests into areas the US cartel is currently strategically engaged with.
leoninski trotskiayovitch
You can't live off food for thought
13.02.2011 23:45
Carl
K-Bar for the empire.
13.02.2011 23:53
In the UK, its probably green tax - the government is looking for the most palatable taxes that people will take at the moment and we seem to be a nation who are willing to pay this with no real fuss. I think the US is becoming the same so expect them to use green taxes more there too."
Western invasions of countries in the Middle East, oil prices go up, domestic gasoline prices rise, economic collapse of Western financial markets, oil prices fall, domestic gasoline prices stay high to recoup the losses.
You are paying for the folly of war. And you will pay for it for a long time to come.
Its called the "Western Imperial Cycle". And the worst is yet to come!
Knot-Eyed Jaguar
Yes
14.02.2011 09:58
Subscribe to Weiss Research emails, They might be right, and there is a double dip coming. They are wrong because thay tell you how to invest in the stockmarket to profit from this coming double dip. The reality is that INFLATION destroys the Lifeblood of Capitalism and what is coming through the Governments all attempting to avert a Recession is going to be Hyperinflation that will destroy the system we all live by., Fat paper profits in a defunct Stock Market will not feed you. Nor will property.
Investigate the 'High Frontier' alternative. It may be too late.
Capitalist
It's time to talk honestly about price rises!
15.02.2011 20:57
There is not yet a shortage of oil (soon maybe)
There is no shortage of construction materials, plenty of sand, gravel, clay(brick).
There is no soil erossion in the UK
There is no population pressure, just a housing shortage.
There is no shortage of food, very little of the countryside is under plough and could easily be doubled.
There is a shortage of fish. so stop eating it.
There is no problem of cronic pollution,
There is not yet a problem of climate change,
There is species extinction, but its not a problem
There is wilderness loss, but its not a problem
There is a problem with land use in the UK, but just scrap horses, growing daffadills, etc and provide more land for construction. & scrap town planners!
There is a problem with natural gas shortages.
There is going to be a problem with importing vast amounts stuff, soon there'll be competition for global products.
honestly price rises are just a rip off scam carried out by City gamblers!
In my humble opinion
Whooda thunkit
15.02.2011 21:19
There is species extinction, but its not a problem
There is wilderness loss, but its not a problem "
Oh good.
Hugh Jarce
Lets all invest in the US
16.02.2011 01:26
Everything is ok.
doomer
China
16.02.2011 01:33
The Chinese money supply has increased 53% in two years, and the latest numbers show inflation is soaring out of control in China. Things are even worse than they appear at first glance because China manipulates its CPI basket to reduce the impact of soaring food prices.
Looks pretty fucked to me as well, especially considering that the US has a $500 billion dollar annual trade deficit with China. Think about that for a minute, especially in lieu of a dollar collapse.
Mao Zedong