Over the weekend — between Friday’s S&P downgrade and Monday’s 630-point oopsie on the Dow — I had a couple of conversations with world-watching friends.
They went like this:
FRIEND: Hang onto your carbine and check your dried lentils. Here it comes!
ME: Yeah. Uh huh. Well. Maybe.
“It,” of course, is the financial apocalypse. The long-fabled, eagerly dreaded financial apocalypse. The Big Event that’s finally going to implode the established systems and either a) allow freedom to arise phoenix-like from the ashes or b) bring about Zombie War III, from which only the hardest and most savage will ever recover. Or a) following b).
You already know my opinions on the “George Romero Scenario.” Could happen. Will happen in some places (London seems ripe for a zombie attack right about now, and Detroit is overdue). But it’s not what most of us are likely to face.
But what about the “it”? What about the trigger event that will finally (after some of us have been expecting it for 40 years) tell us that “it” has arrived — the day, the moment, the fall of the domino that will collapse all the other financial dominoes?
Will there ever actually be a trigger event? Or are we just in for a slow, slow fall that culminates in … more slow falling? A downgrade here. A panicky day on the exchanges there … followed (as Tuesday followed Monday on the Dow this week) by desperate bursts of exuberance .. followed by slightly deeper depression, slightly more desperate panic next time? World without end, amen.
Without a doubt, this summer or early fall look like trigger time. The dollar is shaky (and being shaken to pieces by its masters). Even the “strong” countries of the Eurozone are looking clay-footed. World alleged leaders fiddle while economies burn. And even too-big-to-fail bankers are finally getting their comeuppance.
It’s obvious, finally, that the Keynesian systems of the West have reached the inevitable point where they have nothing to fall back on. Europe can’t bail out Europe. The U.S. can’t bail out the U.S. They can’t bail out each other. And China is looking down its nose at both — from its own precarious vantage point. We know this, you and I. But how many think there are still political “solutions”? OMG, please. Not more political “solutions.” And oh, please, let’s not hear any more tsk-tsking talk from pundits about whether we “might” slide back into another “recession” — as if they believe anything ever actually got better following the mess of 2008.
All that’s left is more money printing. We already know that scenario.
But …
In Zimbabwe and in the Weimar Republic when their governments turned their money to toilet paper, people did a lot of creative things to keep going — from bartering to burning bricks of money to heat their houses. But they also relied on the U.S. dollar.
Us … yeah, good luck with that.
If politicians and money men manage to keep Keynes’ Frankenstein monster sewn together through the winter, another likely trigger point seems early in 2013, after the elections.
But what if there’s never a recognizable trigger point? What if we just go on like this — until perhaps we realize the “it” we’ve been waiting for actually happened a long time ago and nobody even saw it until long after the fact?
My friends and I couldn’t agree on exactly what was likely to happen or when. But the one thing we agreed on is that we long for the “it.” We want to be able to say, “Okay. That’s that. The old is over. Now it’s just a matter of burying the (hopefully figurative) dead and cleaning up the streets.”
We long for the day when politicians finally shrug and say what sensible people already know, “Look, we’ve made a botch of things and we don’t have any tools to fix this.” Oh when politicians can’t say anything because they’re too busy running from the people they screwed. We long for the day when all the “too big to fails” have met their well-deserved demise — and better business people are rebuilding. We long for the day that Joe and Josie Average quit looking for a Glorious Leader to haul our asses out of the mess that previous Glorious Leaders have made of the world.
No matter how painful it is to We the Victims, it needs to happen. “It” needs to happen. Right now, as Matthew Norman said so well, it’s like the “phony war” in Britain at the beginning of WWI.
Unbearably unreal. All looks “normal.” When it’s anything but.
My greatest fear is that that day — the day of “it” — will never come.
I try to live in such a way that it won’t matter when/if “It” happens. Sure, it may actually matter a great deal, but I try not to worry about “It” or fret that “this is ‘It'”. I really do try to make preparations that will smooth out the rough spots even if they are not “It”. That has served me pretty well so far. Every day has the potential to be an individual “It” for any one of us. Use those possibilities as practice.
I suspect if/when “It” happens, we will not have seen it coming. And if we do see “it” coming, that won’t be “It”.
Yes, I’d love to have all the bad part over with and see a chance to start over. I do worry a little about the people who have that all planned out for us. Hmmm….
For me, it’s not so much the “how we live after” part (because in a way we’re already in “after”) or the starting over.
It’s the psychological break. It’s ending the tension of everybody trying to pretend that our situation is normal or that there’s some political “fix” that’s yet to be discovered. It’s saying, “That’s that” so that we can move on. It’s everybody finally admitting that the emperor is naked and dealing with that fact.
I always expected an “it” to cause the S to HTF. Until I started looking at the example of Zimbabwe. I figured if even that pointless, misbegotten – and young! – dysfunctional hellhole could keep it together in the course of such protracted hyperinflation, I won’t live long enough to see the USA hit a full George Romero.
Nice post claire…..just keep yer powder dry
‘it’ is happening … in slow motion
much like the Japan quake was predicated by 1cm a day slide west of Pacific Plate, we are devolving by the inch
I believe the “it” happened Sept. 11, 2001. In retrospect and from this distance 9/11 wasn’t the start of WW3 or a triggering event for an economic collapse. But it was the defining moment when what passed for economic stability was shown to be a fragile shell.
Do you remember how the country came to a halt? For months.
The events since – the contrived wars in Iraq, Afghanistan, and now Libya – the government induced building spree ending in a housing bust – the flailing about by the current administration to force socialized medicine on the country – the iron heel of statism seeping down to local militarized police – the suspension of habeas corpus – the thugs of homeland security – the debt crisis and stock exchange spasms – these are just everday now. It’s a spiral down, to what exactly no one knows. Food delivery disruptions? Civil unrest? Martial law? War? Civil war? Would any of these be any more of an “it” moment than the unmasking of our house of cards by 21 terrorists who highjacked a couple of planes and destroyed our illusion of invincibility? That was the psychological blow that ended the world as we knew it.
Yep, sure would be nice if there were a recognizable ‘it’ … but I doubt it. ‘This is the way the world ends, not with a bang but a whimper’. Kinda like old age creeping up on you, you don’t just look in the mirror one day and say ‘gee! I’m officially old!’ its more a matter of one joint aches, then two, one tooth lost, then another.
They haven’t nationalized the part of my retirement account that they could get their grubby congress-critter paws on via legislative mischief, so there’s that still left for a “political” solution.
“But what if there’s never a recognizable trigger point? … My greatest fear is that that day — the day of “it” — will never come.” – C.W.
Your post reminded me of these two bits, hope you don’t mind if I show you, for those unaware, I think this describes, “it”:
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises.
http://www.thefreemanonline.org/columns/boom-and-bust/
What is a “Crack-Up Boom?” Von Mises explains… :
“‘This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.’
“But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.
“It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation [That is, printing of money] is a policy that cannot last.”
Mises is describing the lunatic phases of a classic inflationary cycle.
http://www.dailyreckoning.com.au/crack-up-boom/2007/06/26/
Although I prefer chasing disreputable women, my days are spent with the history of dead civilizations, Byzantium, Rome, and even England, Modern Russia and Napoleonic France. I love John Julius Norwich and his descriptions of the end of Venice and the Eastern Roman Empire.
We need to understand that creativity to destruction and destruction to creation are normal and there’s never any “end” or “it” per say. Look at Germany’s defeat in WW II, or the fall of Rome, still a great city within my favorite country of Italy. if you know the numbers and understand the scale I doubt if anyone can consider Alaric and his Goth’s sack of Rome as anything but a fart in a wind storm when you compare what happened in Eastern Germany in particular, but all of Germany in general, during and after WW II. I spend a lot of time in Berlin in the 70s and even though it was surrouned by Soviet Socialist Shitholes, Nato Berlin was a great place to be. Twenty years later no one could even tell that Alaric had sacked Rome or the Russians had been to Germany. It all became quite civilized very quickly after these big events.
Even if that magic event comes, “it” means little in the scale of hisotry. The faster and harder the destruction the swifter the rise. There’s a number that’s fascinated me for a long time. 32%!!! That’s the level of unemployment in Kosovo during the war. It’s almost 50% now, in times of peace. As some see it Kosovo was actually better during the conflict than today. However, I’m sure the residents of that semi-fair country would much prefer the high unemployment to the war-time lows.
Perspective is an amazing thing. There were a few areas of Germany that were never touched during the 30 years war, but for all practical purposes it is what many survialists plan for. Death from disease and the sword were a normal part of life for most German men of the time, and let’s just say that feminism didn’t exist amongst the various armies who’s only form of pay was whatever they could take from the locals. There was an account of one town (Augsburg?) kept by a monk. He recorded the back and forth of the towns fortunes. Every man in the town was put to death serveral times over in the period of couple of years and every woman (female might be a better destription) was raped each time the town changed hands. The Monk reported that most woman were pregnant shorty after the latest conquest. But it was a well built town and men (many times deserters from one of the various armies) would flood into the town every winter for shelter. Within four years it was one of the most successful towns in Germany, well defended and fed because it has a lot to offer, not to mention a growing number of young to help build and defend the place. I’m sure that it wasn’t in the thoughts of any of these savage men that they were actually creating a better city by their brutal behavior but in a manner of speaking that’s exactly what happened. Talk about the unintended consequences.
For every Thirty Years War, which was the Zombie Time of myth and Romaro Legend, We have the fall of my beautiful Venice. The people had become so used to welfare and living off of their past wealth that they couldn’t be bothered to fight for Venice when Napoleon showed. This beautiful City/Island of traders and merchants had fought the brutal Turks to a standstill many a time and never submitted to any European country, let alone the Catholic Church. And yet at the end they just quit. And life went on.
Nicely put, Claire – all ’round!
I particularly liked this part:
“Will there ever actually be a trigger event? Or are we just in for a slow, slow fall that culminates in … more slow falling? A downgrade here. A panicky day on the exchanges there … followed (as Tuesday followed Monday on the Dow this week) by desperate bursts of exuberance .. followed by slightly deeper depression, slightly more desperate panic next time? World without end, amen.”
Ever seen the movie “Jacob’s Ladder“?
I think it *will* be a slow demise — keeping us all on life support while supposedly giving us the “best care” that money can buy. They’re charlatans of the worst sort — feeding on our hopes and fears, taking our money while pretending to exact a cure.
They don’t care if the treatment is worse than the disease. They blithely continue their bogus therapy while prices and unemployment climb, owners lose houses, businesses falter, and men die overseas (and in prisons and in the streets) in the name of their misbegotten bloodletting policies. And they don’t have the guts to admit that they’ve misread the Keynesian diagnosis in the first place.
The attempt at life support is not even for us, the “mundane”, but an excuse to keep us quiet in bed while the quacks line their own pockets as fast as possible before they have to skip town. When (sh)“it” happens, we will not see a doctor-politician around. The orderly-cops may be mopping up the floors, but the “experts” will have left the building.
~~~
Claire, was there another part to the “Responsibilities” series of blogs, or is it finished?
If you were a leech, would you want to kill off your host quickly? Or would you rather drain his life force ever so slowly, to sustain you for as long as possible?
I think our trigger event was the housing bubble burst in 2008, which led to the “to big to fail” pandemic in 2009 and 2010 which included the govt deciding which business ventures to support, subborn, buy or steal (Chrony Capitalism at it’s bes a game played by both parties). I believe we will see the steady decline with occasional rapid descents to a new “normal” followed by more decline etc. A recent example is Argentina. When their government defaulted on debt there were many immediate problems with longer term problems developing slower, such as the rise of crime, devlovement of society etc.
I have read the various works of Nova over at The American Apocalypse http://theamericanapocalypse.blogspot.com/ and believe he lays out a reasonable scenario for the decline. Some of his results are fanciful but there is lots of food for thought and pondering.
Sadly, there is no John Galt to speed the process along. We are on our own to live so that “the end” of their world won’t be the end of ours.