We Didn’t Start the Fire

Actually, to counter singer/songwriter Billy Joel, we did start this FIRE. Not you and me, of course, but our culture. The U.S. industrial economy is all about Finance, Insurance, and Real Estate. The FIRE is about to run its course, extinguished by the absence of fuel in each of those interconnected sectors.

The financial sector has been largely nationalized, with the U.S. taxpayer on the hook for trillions of dollars of bad loans made by big banks. Back in February 2009 our national debt was a mere $10.5 trillion, but it already exceeded the value of all the currency in the world and all the gold ever mined. Those were the good old days. Now our national debt exceeds $13 trillion (with more than $8 trillion still hidden from view), and the empire will go down like a tub full of gold bricks if we stop fanning the flames by slowing the printing press.

By running the printing presses at full speed, we are inflating the most massive bubble yet. We’ve seen how those bubbles pan out for the industrial economy. If we build them, the pin-pricks will come. Can we create another financial crisis? Of course. After all, a smoke-and-mirrors economic recovery is no protection against a crash in the equities markets. The peak in industrial economic growth is already here, with about ten thousand swords out there vying for attention to burst the bubbles of Treasuries, the U.S. big banks, China’s economic growth, the re-inflated housing market, and a renewed credit crisis. Oh, and of course the interaction between these myriad factors. In summary, the countdown is well under way for completion of the ongoing U.S. economic collapse, and there’s simply no way to soften the blow when we plunge to the bottom of the economic heap. The U.S. has the world’s biggest industrial economy, and the bigger they are, … well, you know.

The one-size-fits-all solution of printing money is leading inevitably to hyperinflation, even as the U.S. money supply dwindles. Think Zimbabwe, but with U.S. dollars. And the U.S. dollar is still the world’s reserve currency. All signs still point to a major crash in stock markets (see here and here, too, among a kajillion other sites). At this point in the post-peak oil era, it’s clear to anybody paying the slightest attention we’re headed for full spectrum collapse.

How will it end, and when? It seems completion of the U.S. economic collapse will follow on the heels of Europe, which is cheering for its own demise even as all the PIIGS drown in a sea of debt. This is supremely good news, of course, for the dozen or so people who care about non-industrial cultures and the living planet: Our little reign of terror is just about over. We’re an empty garbage can, playing power games enabled by the hologram-like appearance of power.

I’ve no doubt the empire will fail to go silently into the night. Instead, we’ll take out individuals and countries with every lethal weapon in our power, including weapons most of us don’t even know about and people we don’t care about. Iran apocalypse? Could be — talk about mutually assured destruction — and soon. How soon?

Your guess is as good as mine. But is it as good as the 25 leading trends forecasters, who agree that 2010 could be the year? Hedge funder Hugh Hendry provides a concise summary: “I would recommend you panic.”

As much as I appreciation the concision of Hendry’s recommendation, I would recommend you prepare and celebrate. I’ve been recommending the former for several years, while pointing out the good news associated with economic collapse. I have more company now than I’ve had for a while: Economic collapse has gone mainstream, and the occasional worthwhile ecologist is joining Daniel Quinn in recognizing and spreading the news.

Even as the gusher in the Gulf gets much worse by the day (thus diverting our attention from BP’s other large spill), even as Barack Obama tries to use the disaster to push his ill-founded political agenda, even as the cozy relationship between BP and the Obama administration becomes clear, so too do U.S. political policies keep steering straight at the iceberg of economic and environmental collapse. As the industrial economy stumbles along, the world’s biological diversity continues to suffer even as we peer into the abyss of extinction for many of the world’s species (including, ultimately, our own).

Where should you be when economic collapse comes to your house? Michael Ruppert and his protégé Rice Farmer suggest staying where you’re most comfortable. Much as I appreciate their efforts to inform and engage economic collapse, this advice seems immoral and short-sighted to me. First, it’s the comfort of city living that got us into this civilized mess to begin with, and it’s exactly this comfort that requires obedience at home and oppression abroad. Second, today’s comfortable urban existence might not be so damned comfortable when the lights go out and the water stops coming out the taps. Rice Farmer points out that people in rural areas will “have to cope with hordes of desperate, starving city people who try to steal our food. Unless you are in a really remote location, expect hungry visitors.”

Good point. But why do you think those “hordes of desperate, starving city people” are bound to be desperate and starving? Why do you think they’ll be leaving the cities in hordes? I’d guess it’ll be because they’ll become suddenly and profoundly uncomfortable when the grocery stores run out of food and the water stops coming out the taps. If you think you’ll be comfortable surrounded by a few thousand desperate, starving city people when TSHTF in your backyard, by all means stay in your comfort zone. On the other hand, if you don’t think that’s going to work out well for you, I’d recommend skedaddling out of the city before the real rush gets under way. When will that be?

In this case, “better late than never” is the wrong answer. The time to dig a well is not when you’re thirsty. The time to plant a garden is not when you’re hungry. The time for securing your water and food is now, before the industrial economy burns itself out. You and I didn’t start the fire of empire. But we’re about to see it extinguished.


This essay is permalinked at Island Breath.

Comments 14

  • now thats satire!

  • Thoughts on people fleeing the cities: I spent 11 years of my professional life in Washington, D.C. and had the opportunity on many occasions to watch how generally intelligence people turn into idiots when panic grips them. Take for example a snow storm that blew into Northern VA in February one year (I think it was 2000 or 1999) that caused a white out and a pile up on I-95S past the Quantico Marine Base that went on for several miles. Closed 95 south for about a day and left many many people stranded on the highway all night. It was a nasty mess and all you needed with a little snow and watch them run in panic. The great thing about urban and suburban people is that they are so wed to their cars/trucks/SUVs that when things come unglued in town they will hit the road, plug it up with accidents and traffic volume. Then they will run out of fuel and without electricity to pump more out of the ground will be stranded where-ever and will then demand assistance of the locals. That is when things will get ugly. As to most of these people making it very far? Very unlikely given how poor they are at navigating with a map and compass and how dependent they are on fuel to run a vehicle. Most people will either die in the cities or within 50 miles there of. I don’t expect many to make it into the Appalachian Mountains from D.C. or Richmond or even Roanoke. And those that do make it will either become indentured servants or will likely be shot. I can’t say I am looking forward to the coming mess sitting up here in the mountains on my currently peaceful little farm.

  • Indeed ~ you should locate yourself at least 2 1/2 large tanks of gas away from any big cities!

  • @Randy:

    These people, at least the top dogs, do know they are doomed if they venture into the wild.

    That’s why they will bring their housekeepers, bodyguards, etc who are more used to poorer condition. Since the hangars-on’s being and safety depend on the well-being of the top dog, they will protect the top dog and shoot down the locals to take over the town.

    All revolutions are like that. The high and mighty take refugee in safe places and the loyal retainers hold the fort until the attackers get exhausted and drop like flies. Then the high and mighty return in their full glory, and kill off what’s remaining of the attackers.

  • Cindy, is there such a thing as a location in the United States that is 2 1/2 large tanks of gas from the nearest big city? Or is that the point – leave the United States?

  • Perhaps there is a clever wisdom in Ruppert and Farmer’s recommendation to “stay where you’re most comfortable.” After all, if most city people take their advice, all those same people will not be rushing out to crowd the rural areas now, thus leaving more room and better opportunity for those who have enough common sense to plan ahead.

    Besides, if John Rember is correct about defensive fictions, the vast majority of humanity will not believe the collapse is happening even when it is crashing down around their ears, and they still won’t flee – they’ll just hole up thinking things are bound to get better.

  • Wendy,
    You are probably right that the vast majority of people will not believe what is going on around them and will likely stay home and wait until things get better. However, this may not be the case, it just really depends on what is happening around them. So, another example or two if you don’t mind. Back when hurricane Isabelle blew through Fredericksburg, VA it cut the power for some people for as much as two weeks. There was a family down the street from us whose wife and daughter blew out of town and headed west to find a hotel room with electricity as they could not bear to be without it even for a few days. The husband stayed home and I think he enjoyed the peace and quiet. ;) Then there were the people further north in Stafford that were climbing the walls after a few days without power (and getting rather irritable.) Some enterprising persons were selling generators with 5 gallons of gas at a 100% markup and they were selling like crazy…of course, 5 gallons doesn’t go that far. There comes a point when it begins to get obvious that the power is not going to come back on, the water is not going to start flowing and the food is gone, they will start to move, but most don’t have a plan. Final example, co-worker who had retired and lived in Falls Church told me one day that he kept his car fueled and was ready to run at a moments notice. I asked him where he was going and he just said out of Northern VA. Not much of a plan if you ask me. May work (sort of) in the event of a terrorist attack when things might get back to normal after a few days, not when the system begins to come down. In the end, I don’t expect to see anyone out here from Roanoke, it is too far, to many windy mountain roads and too many other land owners between myself and I-81 / Roanoke.

    Jamie: As to the top dogs? The ones I dealt with where mostly retired two and three star military officers who don’t know how to do anything other than issue orders. I don’t expect to see any of them as well. As to people coming out here to take over, they are at a distinct disadvantage for the following reason: 1) we have the home field advantage (know the terrain and all the good ambush spots) 2) we target shoot a lot, 3) my driveway is a natural kill zone with a little cover and it is in a valley with lots of good protected shooter positions. Hate to say it, but any hostile people coming up that 1/2 mile driveway will be taking fire from three directions at once. I also know all the distances because I fenced the property and had to measure them. 4) the locals don’t really like outsiders very much and will not be very welcoming, after all, this is Floyd County, VA and if you have not heard of it, it had quite a reputation back during boot-leg days!

    When I was in graduate school one of my advisers had the following sigh on his driveway:

    “If you are not family, friend, known or expected, leave now.” Doesn’t sound very inviting does it.

  • Falls Church is where many of Washington’s officials and higher-ranking govt employees live, so they are more informed than the rest of the country I admit.

    I wonder whether General Sherman paid a visit to Floyd County, VA. Not much would have been done against Sherman’s looters since the boys were fighting at Petersburg.

  • Jamie, I’m not sure, as a former not high ranking government official if those at the top are better informed. After 10 years of doing intelligence analysis I concluded that senior leadership was not interested in the truth about what is really happening in the world. They were more interested in perceptions of reality and preserving the statuesque. The question always asked when reviewing an assessment is “what will the White House think?’ I still remember the day my office caught hell from SEC DEF Rumsfeld because “we didn’t support the president” (Bush) concerning the Iraqi WMD. The truth is, most of the IC (intelligence community) didn’t support it, only CIA did and they took it in the shorts when nothing more was found that wasn’t already known (existing stocks of chemical weapons, yellow cake from the 1980s nuclear program). Government also suffers from over compartmentalization of its work force. For example, I was an industrial analyst who focused mostly on missile production in the former USSR. You would think that I would have also looked at oil and electricity as you need both to make aluminum missile airframes yet that function was handed to a different group and we didn’t talk to each other. One of the things that came out of the 9/11 Commission report is that government agencies don’t talk to each other (frankly they don’t like each other, but that is a different thread). As a result they fail to put the pieces together to anticipate what is going to happen.

    I believe that is the case with collapse. When I was at the Defense Department we viewed ourselves such that collapse was out of the question. Even if attacked on a massive scale, enough will survive to put it all back together again. I no longer believe that, but I have been out of the box for 3 years now and have been able to develop a better perception. Simply put, when your within the “Beltway” you can’t see the big picture. That describes all three branches of the US GOV.

    Regarding the Union Army, apart from a limited Shenandoah Valley campaign the Blue Ridge Mountains were largely left alone during the Civil War. Remember, Virginia once stretched to Ohio until the most mountainous part of it, now West Virginia, decided to part company with the Old Dominion. Just as in the past, mountains consume armies much as large cities do. There is nothing like catching a line of armored vehicles in a confined valley or in a confined urban landscape. Knock out the lead and the rear vehicle then destroy them in detail (particularly if they were foolish enough not to bring any infantry with them). Lots of that went on in Chechnya and also during the Balkans War. So, no Sherman didn’t visit SW VA’s mountain counties, the armies went around them. It should also be noted that these counties were great places to flee if you didn’t want to go to war whether it was the Civil War, WWI, WWII, Korea or Vietnam. Up until the 1970s this area was still very isolated.

  • The role Of Neo-Liberalism, in widening the income gap between the rich and the poor.

    June 5, 2010 by politicalsnapshots.wordpress.com

    The role of Neo-Liberalism, in widening the income gap between the rich and the poor.

    “One of the most pronounced effects of Neo liberalism is to create wealth inequality within national borders and between states. Within a decade of adopting free market policies, the class divide in the US and UK became significant.” Professor G. William Domhoff. UC @ Santa Cruz.
    It is just another indictment of Neo liberalism and its multi-faceted destructive policies encumbered upon people of the world. It is very fascinating to note, that the income gap between the poor and the rich has more pronouncedly been evident in the US and UK, the joint creators of Neo liberalism.
    This enormous income gap between the rich and the poor in the US has concentrated more power in the hands of the rich and has created a feeling of helplessness on the majority of American citizens who have been marginalized by Neo liberal policies.
    Consequently, sooner or later, the question will arise, whose country is it anyway? It is obvious that the widening of the income gap in the US is close to the breaking point. It is not if, but when it breaks, no one can forecast how it might end. It is just that the Corporations are blinded by greed, and our representatives are muzzled by big business.
    Writing on the subject of Neo liberalism’s impact on social cohesion, David Coburn, from the University of Toronto writes: “While it has been asserted that neo-liberalism produces a lowered sense of community it might also be argued that the rise of neo-liberalism is itself a signifier of the decline of more widespread feelings of social solidarity. The political rise of neo-liberalism is freighted with a more individualistic view of society and, perhaps, itself reflects a decline in the notion of we are all in the same boat. Not only do neo-liberal policies undermine the social infrastructure underlying social cohesion but neo-liberal movements themselves are partial causes of the decline of a sense of social cohesion.”
    It is absolutely frightening, what Neo liberalism is doing to societies. It is corroding the very fiber that societies are built upon. Neo liberalism is cancerous. It is undermining our Democratic system. When a government becomes a by stander when millions are practically becoming paupers, while the few are amassing billions, then, the people have no protector. Laws, Rules and Regulations are in the books only to protect the interest of the rich.
    In a wonderful article entitled, “Skewed Wealth Distribution and the Roots of the Economic Crisis”, David Barber, a Professor at the University of Tennessee, wrote:

    “And what is true in the United States of the unequal distribution of wealth, and of the consequences of that unequal distribution, is true again on a world scale. This super-poor mass of humanity, from whose soil is ripped vast amounts of mineral and agricultural wealth, and out of whose labor the world’s manufactured goods increasingly come, are almost wholly excluded from participating in the world’s market economy”. So, what is to be done?
    While a number of social scientists have forwarded divergent solutions for anarcho-capitalism to save itself, Professor Michael Rustin at the University of East London suggests the following points are “made necessary by the implosion of the neo-liberal system in the current financial crisis, and are needed to construct a new post-neo-liberal phase of democratic capitalism”.
    The five points he has put forward are the following:

    (1) A more active role for governments in regulating markets, and especially global financial markets

    (2) Constitutional reforms which enhance democratic processes and civil liberties, and create more representative and pluralist systems

    (3) Policies, which reduce inequalities, and give greater weight to social justice and social inclusion.

    (4) The enhancement of the capacities of international institutions, and especially the EU, to maintain economic stability and growth

    (5) Programmes to address the problems of climate change.

    Very sensible, are they not? But Wait!!! We have to see which governments have any backbones left in them to try and regulate the market, and do away with thirty years of destruction of the people that started with Reagan and Thatcher.

    As I am ready to post this article, I hear a news story that stated that “Hungary might default on its debt”. What is the world coming to. Wasn’t Hungary the darling of the West? Didn’t it do everything that it was asked to? It privatized everything. It reduced government employment. It cut welfare as it was told to do by “free Market Reform” advisors. Hungary did everything a good and obedient follower of Neo liberalism is supposed to do. Yet, it is threatening to “default” on its debt in spite of a $24 billion IMF and EU loan few months back. This is the fruit of Neo Liberalism.

    Do you wonder, which devoted and submissive follower of Neo liberalism will bite the dust, next?

    Professor Mekonen Haddis.

  • Professor Mekonen,

    You speak of the fiat currency as being wealth, the coming crash will dispel that foolish notion. Wealth is good food, clean water and energy which does not pollute, in quantities that ensure survival. You cannot eat or drink fiat currency although you might get small amounts of energy from burning it. Those that survive the crash will be the people that already understand this.