For those of you not paying attention to the news last week, here’s a quick summary: The United States economy nearly collapsed, taking the world economy with it. Only a quick infusion of cash by the Treasury Department prevented full-scale collapse. The problem: peak oil. The solution, such as it is: print money, sensu Weimer Republic. Ben “Helicopter” Bernanke is living up to his nickname, and he’s getting a loan from Henry Paulson.
Oddly, the near-miss came with oil priced at less than $100 per barrel. But peak oil is the underlying cause, albeit not the proximate trigger, of last week’s event.
The plan to save the economy comes with a few strings attached, as you might expect. The proposed $700 billion bailout will cost every American more than $2,000. The national debt exceeds $10 trillion, or about $40,000 per taxpayer. So, what’s a few thousand more dollars we’ll never pay off? You think your Congressional Representative was surprised when Henry Paulson showed up begging for more money? Every federal politician with the slightest clue about the economy knows paying off the national debt would require lifetime indentured slavery for all future generations. Each politician also knows we’ll never (again) get to the point of nationally sanctioned slavery (well, except for the whole wage-slave thing) because the economy will collapse. The requisite collapse is one cost of trying to grow the economy forever on a planet with finite resources. So Congress will bite the bitter bullet, giving BushCo unlimited authority to print money, thereby “saving” the economy. Sorta like when Congress gave BushCo unlimited authority to “save” us from terrorism.
Meanwhile, the mainstream media is starting to connect the dots, as evidenced by last week’s headlines. The Washington Post claims, “What we are witnessing is the greatest destruction of financial wealth the world has ever seen,” the Economist chimes in with, the greatest finance houses “have splintered into matchwood,” and the Los Angeles Times welcomes Americans to third-world status. Never mind the little ol’ Great Depression. This is the big one.
It shouldn’t come as any surprise that Russia is calling for a restructuring of the world’s financial system, thereby joining China in this appeal. Seems the U.S. dollar just ain’t what it used to be. China and Russia thinks it’s going to get worse before it gets better. Me, too.
So, is this it? Is this the end of the line, or will TPTB manage to keep the current game going for another few months? We’ll see.
Here’s what an economic collapse looks like, at least the version we’re facing in the very near future. Another huge bank fails, thereby taking all the other banks with it. And I mean all of them. The Federal Reserve Bank — the bank of last resort, the one that provides money for all the other banks — ran out of money last week. Fortunately for those of us who depend on fiat currency, the Treasury Department “solved” the problem by ratcheting up the printing presses. At some point, though, all the banks fail. And when that happens, you can forget about spending that direct-deposited paycheck. I suspect most people will keep the capitalist faith for a while. They’ll buy the pitch about the economy turning around. They’ll believe the power outages are simply isolated events. Eventually, though, they’ll lose faith in large numbers, if only due to the unexpected realization they can no longer make ends meet when they miss two or three paychecks in a row. As if, at that point, money will mean a thing. Even first-responders will stop trying to enforce martial law in a week or two because they’ll be worried about the survival of their own families.
What comes in the wake of this collapse? When the dollar collapses, as it soon will, the financial and political elite class undoubtedly will try to create a new global monetary regime based on tricks that have used to centralize power and concentrate wealth in their own hands for generations. Sorta like the last few thousand years. Another possibility — or maybe it’s just a dream — is the emergence of a decentralized, democratic, just, and sustainable system. Sorta like the Stone Age. Call it the Neo Neolithic, for lack of a better name.
I recognize the ongoing economic collapse is wonderful news for the world’s cultures and species, and I’m certainly willing to die to bring down the empire. On the other hand, I sure as hell wish I had a functional well at the mud hut. I’d like to see it all come down.