Friday, February 20, 2009

Apocalypse soonish

The end is so near I can smell it.

There are such big similarities between what’s going on the world today and what happen during the 1920’s that I need to pick up that tread. There are really only two main differences I can see. First of all, we still haven’t had any massive increases in protectionism. Some, but not as much as back then. And second we do not have the gold standard today, which they nearly didn’t have back then either, it was on the way out. But otherwise is almost spooky. Kind of like a theater piece being played once more. And this is the first act, nearly completed:

On one side of the Atlantic we have the Americans who, through fictive loans courtesy of the government, have bought houses they really can’t afford and been living over their actual income, back in the 20’s it was stocks and bonds that people bought for the same reason and just as today, they lived on money that didn’t really exist. We have just had one president who neglected the economy and increased the public debt followed by another one that will surpass this by far. Just as back then.

On the other side of the Atlantic, in Europe, we have governments piling up national debts like it’s no tomorrow with a couple of the main actors of the world market leading the way. Just like back then. Throughout Europe the economies are going, but hardly more. Because of the European Union and the monetary union, the different countries have different problems but cannot do anything about it because they are tied to the Euro. But the main problem is, as before, UK were the national debt is frightening high and the governments solution is to put out more money on the market and borrow to spend even more.

All over the world people, even though still not aware of the coming comedy, are still having an incline what’s about to happen and are starting to save their money in gold. Investments are going down all across the globe and even if protectionism has started to grow here and there, it has not really taken off yet. Businesses are going down and several big corporations’ issues warnings about their profit margins pretty much every day.

Ladies and gentlemen, the stage is set.

Back then it was the hyperinflation together with protectionism and, above all, the US Federal reserve idiotic attempt to support Great Britain that really got things going in the end. This scenario is not very likely today though. So we have a slight change of the plot here I would say. Protectionism will increase, no doubt about that, so one main ingredient are still there. The British governments plan to put in more money in the market will increase inflation, but if it will be as bad as back then is hard to say. But instead of those problems, today we have EU and some other major players like China. And if I had to guess, China is the most likely candidate to push this pile of crap over.

So we are a couple of years from the main event. Several countries have started spending sprees in attempts to jumpstart and keep their economies going, this of course with either borrowed money or newly printed money, some, as Britain, have used both. And this will be the ending of the second act.

The third act is the most entertaining one. When some (or several; according to me, the most likely ones are China and some member states in EU) will run into really big problems. And then it will take off. Businesses going bankrupt all over, unemployment skyrockets and all the people who are used to be taken care of by their governments will suddenly lose their income, which will lead to civil unrest, possible even civil wars (which is very likely in China). And it’s all downhill for several years. And then it’s time for the final act:

The final act will start when a hysterical people with hysterical problems look towards those easy solutions and start to listen to that hysterical man (well, probably several men and maybe even a woman this time) with politics that seem to be the salvation. And then comes despotism. And with many of these countries now being nuclear powers or having that capability, there will not take long until someone presses the button. Fun fun fun.

Remember where you read about this comedy first people. I will not be there to tell you: “I told you so”, because I will probably be dead and communication will probably not be as good when there are big holes in this planet. But I must admit, this is going to be great. I really am looking forward to this finalization of life as we know it on this planet. There will be some pockets of human survivors, ironic enough, Africa will probably be the only place left were we can still live. Back to basics you might say. Oh, I can’t wait, just a few years left…

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