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Guest Post: The Shape Of The World In 2020

Tyler Durden's picture




 

Submitted by the Global Intelligence Report

The Shape of the World in 2020 

None can foretell the future, and yet the shape of what we face can be shrewdly estimated with enough attention to historical trends; with broad contextual understanding; and with sufficient insight into the character of leaders, their societies, and the structures which define their basis.  

These estimates will be tempered by the sudden acts of nature, the sudden emergence of true leadership from unexpected quarters, or key breakthroughs in science. Still, we can hazard reliable views on the shape of the world in, say, a decade — in 2020 — if present trends and characters remain, and on a knowledge of certain baseline levels of wealth and capability which presently exist. 

In 2011, the world will probably remain beset by the lingering of the present crisis of currency levels and economic performance. This is essentially a mass psychological crisis, based around the perceptions which create trust, particularly trust in asset values and institutions.

In some respect, historical trends have given populations in modern societies excessive trust in the ability of their institutions to remain operational, untended by their populations. As a result, governments have grown larger and less efficient, and have arrogated to themselves more and more of the resources of societies, thereby inhibiting productivity. At some point, those societies, when beleaguered and impoverished, lose faith in the institutions of governance and leadership succession. 

It is possible that the end of the second decade of the 21st Century will see exactly that tipping point, at which faith — a psychological attribute — disappears, and either rigid reaction or anomie and chaos intervene. This forecast is based on the existing performance of most governments of modern economies, but reactions of their societies will vary based on their individual natures, their reserves of wealth, and the degree to which government and leaders can adapt radically to reignite and impart purpose and prosperity to their societies.

At present, in 2010, we see no major societies prepared to take such radical steps to reverse trends of social distrust in systems, and, indeed, the accumulation of laws and customs actually makes such radical action infeasible or unlikely, except in the event of major external threat, such as war. 

This trend to inflexibility and resistance to radical change (which would entail discomfort and the removal of personal wealth) has reinforced a “business as usual” attitude. People rarely see the extent of change occurring around them; it is disguised by a continuity of visual references; and the presence of institutions which have not previously failed them.

In fact, it has been said of the modern era that institutions have evolved specifically to disguise change, because change appears threatening. Thus, when systems finally break down under the weight of debt, social change, and reaction, the event appears sudden and unexpected.

Some societies will merely erode into lower expectations of their own domestic and international capabilities, and well-being: many modern societies will allow themselves to decline in “a step of sighs”, occasionally rebuilding to some degree, only to resume their downward steps, unless confronted with an existential challenge which forces them to cut away the inhibiting dross of years, and infuses them with the energy to respond. 

So, then, the coming decade promises a continuation of the declining fortunes in major modern economies, absent the catalyst to reverse the trend. 

And if Western societies falter, will new societies step forward to claim wealth and power? Not necessarily. There is no guarantee of continued growth in the People’s Republic of China (PRC), the Republic of Korea (RoK), the Russian Federation, or India. Each has their frailties, and each is dependent on the global wealth to varying degrees.

Indeed, it would be reckless to over-state the resilience of the PRC, Indian, and even Russian economies, bearing in mind their own institutional constraints and their low per capita wealth. Even more important is the fact that each of these societies, again in varying measure, have failed to build the granite base of self-confidence within their societies in the durability and infallibility of their national hierarchies. 

We see, as this column has said in the past, the ongoing lack of a global reserve currency, for example, to replace the United States dollar, because neither the PRC’s yuan, the Indian rupee, the Russian ruble, nor the euro are yet greeted with true global credibility.

How, then, do we measure wealth, and power, absent a currency yardstick? 

This brings up the next factor in sustaining wealth, even wealth abstractly denominated by a currency. Wealth is based on trust in currency which is in turn based on trust in the underlying asset values which support it. In modern societies — those with internationally tradable currencies — asset value has moved from a nominal dependence on gold to a dependence on other physical determinables.

To a great degree, this was, for decades, based on the strength of the manufactures of primary and secondary industry, and also on the demand for — and therefore the “value” of — real estate. The leveraging of real estate as the basis for access to capital has become the basis of Western investment, taxation, and power. 

It was this fundamental which was at the heart of the “global financial crisis” of the past two years: the attempt to build real estate values rapidly and artificially [if any aspect of the “value process” can be said to be not artificial; e.g. outside of a real market.]

That bubble burst, and with it much of the ability to amass capital and move it globally. The result will be evident over the coming decade in a reversion to more difficult capital formation; increasing nationalism and resultant bilateralism of trade funding; and so on. 

But there are other trends which will help determine outcomes over the coming decade, particularly the suddenness with which changing demographic patterns begin to bite. We can see, for example, the impact which the La Niña floods had in skewing the population dispersal patterns in Pakistan, the country with the highest level of population growth and the highest rate of urbanization. Now, the agricultural productivity of rural areas has been damaged by the flooding and more people have moved to the cities, substantially decreasing the per capita productivity there. 

However, in most modern societies the peaking of population growth rates, and the move toward sudden population declines, will occur possibly within the coming decade. Population levels in a number of major nations are presently not sustainable by replacement births, and it may be that we begin to see areas gradually depopulate, reducing the demand for real estate, which has been the modern basis for wealth measurement and currency value.

The last such major depopulation occurred with the great plague which followed the globalization of Genghis Khan in the 12th and 13th centuries, but at that time abstract value — such as portable wealth, expressed in currency — was not so dependent on real estate, and particularly highly-valued urban real estate. 

So the world in 2020 could see a significant decline in the availability of capital (in real terms; the availability of printed, inflated money will not be meaningful); in the mobility of societies and their ability to access goods not produced within easy reach. All this will occur unless radical steps are taken to revive real productivity and the self-reliance of societies.

And such radicalism is possible only through leadership. It is that which we await.

 

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Fri, 12/17/2010 - 18:55 | 814154 Mongo
Mongo's picture

Leadership... well not in this generation and the next is mezmorized by tv-shows and series... so let's hope there is a generation not lost in the coming century.

Fri, 12/17/2010 - 20:54 | 814477 Malcolm Tucker
Malcolm Tucker's picture

Look what happens to people that actually want to get involved. This is in Canada no less. What a fucking disaster...

http://fedupmontrealer.blogspot.com/2010/12/canada-beware-of-coming-police-state.html

 

Sat, 12/18/2010 - 11:13 | 815359 Dental Floss Tycoon
Dental Floss Tycoon's picture

Very interesting embedded video. It is very clear that the real power in the world is not governmental.  It is financial.

 

The implicit message is that if change is going to come it will not be peaceful.

Sat, 12/18/2010 - 18:47 | 816007 fellatio is not...
fellatio is not fattening's picture
http://www.youtube.com/watch?v=Pu3IT1kGavE   ... This man tells it like it is, I wanna see him on MSNBS
Fri, 12/17/2010 - 19:01 | 814163 the rookie cynic
the rookie cynic's picture

2010-2020: The waiting for Godot decade.

Sat, 12/18/2010 - 02:04 | 815088 RockyRacoon
RockyRacoon's picture

And hopefully banking will go back to being that staid old job that attracts the guys who like green eye-shades... like it used to be long before the magic of leverage and alphabet soup of devices for theft.

Fri, 12/17/2010 - 19:01 | 814167 Vergeltung
Vergeltung's picture

no meaningful analyses of 2020 can be had. it's just too far off. silly, really.

Fri, 12/17/2010 - 19:18 | 814205 Mark Medinnus
Mark Medinnus's picture

Your easy dismissal implies that you are young.  Since I'll be eligible to draw SS by 2020, however, I value any sensible analysis of future trends and likely outcomes. One personal projection: there will no meaningful SS will be available to me when I retire; consequently, I'm funding my retirement with this insight in mind.

Fri, 12/17/2010 - 19:18 | 814207 Vergeltung
Vergeltung's picture

just turned 48. I made a cryptic comment, yes. however, more so than when I was younger, future developments seem subject to far more variables now. to sound cliched, life was indeed simpler then. predicting ONE year ahead takes great skill now, let alone 10 years....

Fri, 12/17/2010 - 19:44 | 814284 Mark Medinnus
Mark Medinnus's picture

Hey, I agree with you, really.  10 year predictions are tough.  But I'm 53 now and the specter of retirement beckons. 

You know, when I think of it, I felt I was still bulletproof at 48.  Wow, to be in my 40's again, when my head wasn't taller than my hair. 

Fri, 12/17/2010 - 19:47 | 814290 Thomas
Thomas's picture

You are right: long-range predictions are notoriously bad. With that said, the method behind the prediction has merit in some instances. I would say this is a reasonably thoughtful bad-case (not worst-case) scenario, and I found it engaging.

Fri, 12/17/2010 - 20:08 | 814336 A Nanny Moose
A Nanny Moose's picture

Life is what happens while you're making other plans

/wink

Sat, 12/18/2010 - 18:05 | 815945 Thomas
Thomas's picture

John Lennon

Fri, 12/17/2010 - 20:22 | 814369 centerline
centerline's picture

Nah, easy.  Inflation will be monetary.  That is coming to an end.  Deflation will be physical.  That is just starting.  In 2020, there will be a lot less people around than there are now.  Just not enough resources, and too many promises.  The prospect that suddenly everything is going to change for the "greater good" is not supported by any historical reference.

Fri, 12/17/2010 - 19:02 | 814171 greenewave
greenewave's picture

The horror of war and MASSIVE political and civil unrest is COMING TO THE UNITED STATES.

Please watch the video “Hero of War” at (http://youtu.be/z0XPqiQM92Q) and see what the MAINSTREAM MEDIA doesn’t want you to see.

-Anonymous

Wow this look like a movie but the truth is that it’s not.

Fri, 12/17/2010 - 19:13 | 814202 Dr. Sandi
Dr. Sandi's picture

Deja vu. Seems like I've seen this before somewhere!

You make the erroneous assumption that the MSM gives a rat's ass about what I see.

Fri, 12/17/2010 - 23:41 | 814851 BrosMacManus
BrosMacManus's picture

be gone, brownshirt, organize in the more furtile climes of the uneducated.

 

Sat, 12/18/2010 - 14:03 | 815386 G-R-U-N-T
G-R-U-N-T's picture

greenwave,

The "horror" the horror". Yeah right, the Greeks rioting because Daddy cuts them off.

Terrible tragedy when the adult masses depend on the Governments tits for entitlement social welfare programs. I call this syndrome EDD (Entitlement Destructive Disorder). They have the "idea" that they cannot make it on their own, and they end up having all the characteristics of a young child while an adult (also called Developmental Arrest). What we are seeing here is a dependent whining temper tantrum from spoiled dependent children which is a symptom of EDD. There are many more symptoms indeed, however I haven't the time to share them.  There is a cure...

It's called "GEETING OFF YOUR ASS AND GET TO WORK"!!!!!

http://www.youtube.com/watch?v=y-AXTx4PcKI

 

 

 

Fri, 12/17/2010 - 19:03 | 814175 themosmitsos
themosmitsos's picture

Except that they're not waiting for it in Russia

VLADIMIR

FUCKING

PUTIN

bitcheZ

Fri, 12/17/2010 - 19:33 | 814247 Flakmeister
Flakmeister's picture

 May be our avatars should get together

Fri, 12/17/2010 - 20:56 | 814486 themosmitsos
themosmitsos's picture

I have no idea what you're talking about

Fri, 12/17/2010 - 22:55 | 814756 Cheesy Bastard
Cheesy Bastard's picture

I'm sorry could you repeat that?

Fri, 12/17/2010 - 20:57 | 814487 themosmitsos
themosmitsos's picture

I have no idea what you're talking about

Fri, 12/17/2010 - 22:46 | 814738 Alienated Serf
Alienated Serf's picture

its the SS beavis and butthead!  cute couple.

Sat, 12/18/2010 - 01:20 | 815019 Flakmeister
Flakmeister's picture

  Hey, I just liked the F.... :)

Mon, 12/20/2010 - 15:42 | 819212 themosmitsos
themosmitsos's picture

Love u too shnookums :P~

Fri, 12/17/2010 - 19:06 | 814178 boeing747
boeing747's picture

In 2020, we will live in John Lennon's Imagine World without FedRes, we pay each other with SDR, flip Burger and clean floor in a McDonald.

Fri, 12/17/2010 - 19:28 | 814236 Mark Medinnus
Mark Medinnus's picture

Hey, it's a brave new McWorld, dude.   Every happy meal comes with a Bangdeho.  "So supersize me, bitch."  

Fri, 12/17/2010 - 19:17 | 814208 Instant Karma
Instant Karma's picture

The contrarian trade is to look for economic growth, confidence, and stock prices to steadily increase in the next decade, similar to the 1980s followed the 1970s.

Fri, 12/17/2010 - 19:42 | 814275 mauistroker
mauistroker's picture

Anything's possible. But the risk is assymetric (sp?). Avoiding the market and taking a very defensive stance means we might miss out if someone finds another 'North Slope' and 'North Sea' or develops practical fusion but it's looking very unlikely right now. The balance of probabilities is skewed toward the shit hitting the fan so fucking hard that it smashes it. And then blows the fucking window pane out and sprays crap all over the street.

Fri, 12/17/2010 - 20:59 | 814490 tmosley
tmosley's picture

So the mainstream media, Fed, and government officials are all contrarians?

Hmmmm....

Sat, 12/18/2010 - 00:50 | 814954 CIABS
CIABS's picture

(re: instant karma.)  i like the simple, obvious patterns.  stocks in real terms since ww2 have followed a rhythm: a long bull trend begain in mid-1949.  it reversed in very early 1966.  reversed again in mid-1982.  again in early 2000.  the next reversal would therefore be expected some time in 2016 or 2017.  will there be another long bull market?  i don't know, maybe not.  if there is one, will it start notably ahead of schedule?  i doubt it.

Fri, 12/17/2010 - 19:32 | 814209 Cdad
Cdad's picture

I want to weigh in on the question posited in the title of this essay.  Unfortunately, my favorite tv show is on...AFV.  Now I know how that might sound to some of you sophisticated ZH'rs out there...but too bad.  I confess...I never get tired of seeing a guy catch it in the biscuit.  Hi ho.

But I wanted to make a guess on the shape of the world in 2020 now until later when I have more time to read the essay...and I'm going to guess that the shape of the world in 2020 will be         NOT PEAR.

Later, I'll amend this post with actual knowledge after reading the actual article...as I strive to read every single article on ZH each day...and then try to make one informed or informative comment per article.  It has to do with a resolution I made....but I digress and will catch you later....

Fri, 12/17/2010 - 19:34 | 814252 DavidPierre
DavidPierre's picture

Later! Dude

Fri, 12/17/2010 - 20:59 | 814492 Cdad
Cdad's picture

Whew...another good bucket of belly laughs.  If you watch my favorite tv show too, then you know that two universal truths continue to hang tough:  1.  Piñatas are a bad idea  2.  Trampolines are a bad idea.  And of course, a guy catching it in the biscuit is still lololololololol.

Fri, 12/17/2010 - 21:08 | 814525 Cdad
Cdad's picture

So having had one giant martini, and having read the article now, what I have to say is this:

 

1.  Your opening sentence is sweet and enticing.  I get a little lost in what I would call "unconventional use of punctuation."

2.  Paragraph two is both sweet and solid.

3.  Ah...Para 3 is a homerun...as it delivers what I would have thought would be delivered in para 1...but who cares...that may just be style.  Never been wed to convention, myself.

4.  Para 4 is strongest in "truth."  Spot on.

5.  Ummmmm...."faith" is not really a "psychological attribute."  In fact, it is exactly NOT that.  Unless you further qualify that remark...I will not EASILY follow your point here.  The rest of that is pretty sweet...but I hit that snag, you see.

6.  True

7.  Bunk.  This is your weakest link so far IMO.  In fact, it completely overeaches.  Radical change should be resisted.  Faith and tradition, for example, require that.  So you have over generalized here...but not so much that I am not still reading.

8.  "it has been said"...by whom? 

9.  “a step of sighs”....sweet.  Hat tip on that one.

10.  "So, then, the coming decade promises a continuation of the declining fortunes in major modern economies, absent the catalyst to reverse the trend."  There is something true here...however, if you had included the word "If"...then it weakens.  And inserting that word is quite natural...not a stretch.  Not sold here.

11.  About the PRC and such...true.

12.  True...but I confess to not having read your column before...so noted.

13.  OK...the first sentence sings like a sweet bird...and the second one does not as it dies in the word "determinables."  Now, I like artistic license...I do.  But never let that overtake your point on the last word of a paragraph.

14.  Right on! [about manufacturing and real estate]

15.  beginning "It was this fundamental..." should be merged with prior paragraph.

16  On the subject of amassing capital...yes  yes  yes....but you muddle the point.  Be direct here.  However, I have a passion on this matter...so take me with a grain of salt here.

17.  I have no knowledge of the floods in Pakistan...and cannot comment...so...

18.  On the point of the major demographic problem, here being the Baby Boomers, correct.  Had I listened to my own words on the matter ten years ago, I would not have been stung by all the madness of 2008.  Hi ho.  Critical point.

             In final, I would have gone less artsy in the end.  Leadership, waiting for it, mobility, all of it....all good points.  However, I would have gone full on concrete at the end...laser sharp and unavoidable clear, contemporary examples at the end.  In this way, I would have not given my reader the option to interpret differently and dodge the critical issues, which as I see them in your essay...loss of confidence in the system, shrinking demographics, shy capital, and broken systems.  And those are numerous.  I would have gone, how does Spalding say it...I would have monkeyhammered concrete examples right on home at the end.  You could go artsy at the end, but that would have required more concrete stuff in the body of the essay.

            Well...I would say you are sophisticated with language, allbeit unconventional with punctuation.  I like your topic...but I would move towards more concrete examples and conclusions...and less flowery language as the essay moves towards its conclusion.  I would make it easier for my reader to reach my intended message...you know, considering how many contemporary Iphone zombies are out there...

 

Carry on then...as I think we are all working towards the same end....

Cdad

Fri, 12/17/2010 - 23:06 | 814772 Phaethon
Phaethon's picture

You know, I like this.  Perhaps you can start a recurring thing: Cdad's post-giant martini "take"

Fri, 12/17/2010 - 23:59 | 814886 Cdad
Cdad's picture

Phaethon,

Thanks.  I agree...but mostly because that would require more giant martinis to reach those "takes."

Consider your idea accepted....by me, at least.  As for how others might feel about it....either "we shall see" or " they can kiss my ass 'cause this is ZH....whatever."

Cdad was here...

Sat, 12/18/2010 - 08:33 | 815290 Chappaquiddick
Chappaquiddick's picture

Very considered.  I would like to add a few mls of sodium pentathol to this debate.

Hubberts peak might be symmetrical in theory but in practice the down slope will be littered with discontinuities.  A key question that I think we need ask to frame the debate is how long into the decline before we encounter one of these.

My ongoing research into this is casting a light on a very bumpy road ahead.  To draw a very simplistic analogy in climbing terms we have climbed very high on the back of our global hydrocarbon resources but we are now at a point where we can't climb any higher but at the same time we have also realised we can't climb back down either.  We're stuck. The effect could well be a very nasty perhaps fatal fall from these dizzying heights.

I don't see a gradual decay of service or an erosion of wealth over time - for me it looks like a phase change, a sudden alarming shift will be marker to denote we just stepped into the abyss.  Of course sudden is relative to the time frame you apply and for me that might traverse a period of a handful of months or perhaps a few years.  But I'll be extremely surprised if we still blogging here in ten years.  

Sat, 12/18/2010 - 14:34 | 815604 Thorny Xi
Thorny Xi's picture

"I'll be extremely surprised if we still blogging here in ten years."  

Indeed.  Or blogging anywhere.  Most people have no idea what it takes to keep the lights on, literally and figuratively.  The IEA WEO 2010 implictly acknowledges that Hubbert's global peak happened right on schedule - 2006.  Not to worry, since developed economy demand for oil will simply decline.  With declining foundation energy, you bet demand will decline.  Leverage depends upon an increase in future value, else the discount rate will reflect the expected loss.  With declining oil production, the future value of an oil based civilization doesn't look good at all.  Which explains the looting in Wall Street, where people have research departments and know what's coming.

 

 

 

Sat, 12/18/2010 - 18:06 | 815794 Chappaquiddick
Chappaquiddick's picture

The futurists at GS have enabled LB to 'Undertake' Gods work - apologies for the funereal jest - but that fucker won't be satisfied until neofuedalism has been rolled out and field tested on an eager US populace.

Gone are the hopes for human exploration of the cosmos - nope - its horse shit and gruel from now until the supernova - we blew folks, we are a collective set of cosmic cock heads -- did we really deserve anything better??

Jimmy Carter needs some recognition, as he at least tried - the rest of 'em - pay per view primetime gallows.  (The take on that would pay off the national debt!!)

Fri, 12/17/2010 - 19:31 | 814244 mauistroker
mauistroker's picture

errrr.....OK? Who the fuck is THIS guy?

Fri, 12/17/2010 - 19:42 | 814274 Misean
Misean's picture

Way way OT, but still humorous:

SGI forges overclocked servers for Wall Street

http://www.theregister.co.uk/2010/12/17/sgi_rackable_overclocked_server/

Fri, 12/17/2010 - 19:49 | 814287 Weimar Ben Bernanke
Weimar Ben Bernanke's picture

In the year 2020 the US debt crisis will begin as interest payments of 600 billion plus will be needed to service the debt it self. It amazes me that people in zero hedge still believe a dollar collapse will happen in this decade. I for one do not see a dollar collapse for another ten years,the reason being their is no good alternatitves right now. The euro? It is on life support and will ultimately die in two years max. The yuan? Hello China bubble,their rate of inflation is about to get worse. The rubble,rupee,Brititsh pound ,yen and real? Dont make me laugh. The dollar will die but it is going to take 10 more years because if you look at the post-2020 fiscal outlook it  is downright apocalyptic, for two reasons. First, the aging of the U.S. population will drive sharp increases in health care costs (and at the same time, more Americans will be retired). Second, federal interest expense will rise exponentially, as the Treasury's borrowing costs grow with the debt.  So the dollar will die but it will take more time because the current curriences are shiity like pigeon shit.

Fri, 12/17/2010 - 21:02 | 814496 akak
akak's picture

It amazes me that people in zero hedge still believe a dollar collapse will happen in this decade. I for one do not see a dollar collapse for another ten years,the reason being their is no good alternatitves right now.

The universe is not known for patiently waiting for "good alternatives" to patently unsustainable and failing human situations.  Reality does not recognize nor worry about anyone's emotional discomfort or arbitrary intellectual roadblocks.

Sat, 12/18/2010 - 00:00 | 814888 Oh regional Indian
Oh regional Indian's picture

Spot on akak. I think the 2020 prognosticators miss the point. In today's world, 1 year is what 20 years was in the 50's, 10 years in the 80's, 5 in the 90's and back to 1 now.

One only needs to look at the world since late 08. 07's happenings were noted by the few, the resulting bitter fruits were tasted by all (most).

We are entering the most non-linear times we or anyone alive has ever seen. They always ended in War.

War re-writes everything. Especially a global one, which of course has been long underway, only subtly. The pawns were advanced and sacrificed.

Now, the big daddies are coming into play. Kings and Queens, literal and figurative.

I say plan well for tomorrow and live fully today.

The rest, we'll watch together, eh?

ORI

http://aadivaahan.wordpress.com

Sat, 12/18/2010 - 18:12 | 815954 Chappaquiddick
Chappaquiddick's picture

How about this for a scenario - US debt default -> economic collapse -> Military collaspe. China invades US to make good on the debts owed.

http://www.youtube.com/watch?v=PxymwN7nYQQ

Sun, 12/19/2010 - 12:09 | 816887 Oh regional Indian
Oh regional Indian's picture

Grim and plausible.

ORI

Fri, 12/17/2010 - 19:48 | 814293 BruceH
BruceH's picture

the title is "shape of the world in 2020"

 

somehow i expected to read an answer....but you just wrote a bunch of nothing...

 

oh well...

Fri, 12/17/2010 - 19:50 | 814294 Thomas
Thomas's picture

The Fourth Turning ought to sell well in the decade going forward.

Sun, 12/19/2010 - 11:09 | 816840 TexDenim
TexDenim's picture

Yup, Fourth Turning is a fantastic book, seems more relevant with every new disaster that unforlds. Must read.

Fri, 12/17/2010 - 20:05 | 814330 Gimp
Gimp's picture

Great analysis, so if I read this right, get a job at Mc D's mopping floors now and I will be a store manager by 2020.

Love this country.

 

Fri, 12/17/2010 - 20:28 | 814388 BigDuke6
BigDuke6's picture

What is he talking about?  the world in 2020 and he yaps about floods in pakistan?

 

the world in 2020 will be influenced by the demographics in europe and the deluge of the poor wanting to come to the now less poor developed countries.

125 million islamic bangladeshis living on a flood plain with rising sea levels - coming to a neighborhood near you.

Don't want to go there?  then shaddup.

Fri, 12/17/2010 - 20:41 | 814431 CrashisOptimistic
CrashisOptimistic's picture

Jesus, it's hopeless.

In that entire mass of drivel, the word "oil" never appeared.

It is the alpha asset of the world, and this self styled thinker of thoughts never mentioned it.  

It's either infinite or it is not.  Choose.

Fri, 12/17/2010 - 20:49 | 814455 mauistroker
mauistroker's picture

Well said.

Fri, 12/17/2010 - 21:07 | 814524 tmosley
tmosley's picture

OR, it's not a problem unlit after 2020.

People in 1910 thought the oil was going to run out by 1940.  Just sayin.

Fri, 12/17/2010 - 22:25 | 814686 CrashisOptimistic
CrashisOptimistic's picture

Sure.  Maybe not until after 2030.  Or 2040.  Maybe not ever.

Or maybe until 2007.  Oil doesn't run out to create Apocalypse.  You don't understand the problem.

Which year?  Not which do you want?  Which is it?

Sat, 12/18/2010 - 00:16 | 814912 StarvingLion
StarvingLion's picture

I'll one up your oil supply problem with one of my own:

OCEAN DEADZONES (because of pollution)

which in turn creates

RUNAWAY JELLYFISH BLOOMS

which in turn leads to

ECOLOGICAL COLLAPSE

And you think you're oil problem is big?  Shit, theres a really good reason to never want manufacturing to come back to America.

Sat, 12/18/2010 - 00:51 | 814967 something fishy
something fishy's picture

Theres a really good reason to never want manufacturing to come back to America.

It's ridiculous that the FED is targeting the dollar to decline in an attempt to increase US manufacturing

 and exports. I'm sorry but even with a steep decline in the dollar you simply cannot compete against 

cheap foreign labor making pennies/hr. The dollar decline is simply pumping up the earnings

of US multinationals, the same ones outsourcing all those jobs....

Sat, 12/18/2010 - 00:30 | 814934 trav7777
trav7777's picture

"people" did?  Right.

Oil discoveries were still rising then, as was production.

Sat, 12/18/2010 - 02:10 | 815096 RockyRacoon
RockyRacoon's picture

But we now have peak everything, right, Trav? 

Oil, gold, corn fritters, and porn, to name just a few.

Only Washington hot air is yet to reach peak.

How do we harness that for its energy potential?

Sat, 12/18/2010 - 04:20 | 815222 Hulk
Hulk's picture

No energy in DC hot air RR, just exhaustion...

Sat, 12/18/2010 - 05:55 | 815247 BorisTheBlade
BorisTheBlade's picture

People in 1910 thought the oil was going to run out by 1940.

Irrelevant, I bet people in 1910 spent much less time arguing on the Internet and much more time working their asses off on the farms to sustain food supply for them and their communities. They also consumed much less energy per capita that we do today, in other words, they were much less dependent on a thing called oil and thus argument over oil was a job for a limited number of academians.

I am yet to come across a number of how many barrels of oil is used in average to deliver 2,000-3,000 calories equivalent per day to average person, I am simply hopeless to find a similar figure for 1910, but even without knowing exact numbers, I can bet my life it is much more. Thus, the question of oil supply today is much more important than it used to be back in the days.

And, no, it doesn't take oil to run out completely to disrupt food and goods supply chains. Rather, oil has to hit some threshold in terms of its monetary value to make delivery economically unfeasible to many places and plunge entire parts of society into destitution. If relevant decision makers admitted that EROEI for oil is decreasing and may experience dramatic collapse in the near future, that would help make things more or less manageable, but they chose to put their heads into the sand and keep business as usual. Thus, when shit hits the fan, many people will not be prepared.

"Oil will never run out" is sorta equivalent of "Real estate prices never go down", too bad printing presses are helpless when it comes to fixing problems in the physical world.

Sat, 12/18/2010 - 12:42 | 815439 tmosley
tmosley's picture

The point is that people are prone to hyperbole.  They make predictions based on current trends, but consistently fail to understand that you simply CAN NOT make linear or exponential projections. 

http://www.paleofuture.com/blog/2009/6/14/oil-and-gas-will-eventually-be...

Not only that, but people from the same time period thought we'd run out of BREAD in 1959.

http://www.paleofuture.com/blog/2009/6/28/not-enough-bread-in-1959-1909....

Linear projections lead to all kinds of crazy conclusions.

Sun, 12/19/2010 - 12:41 | 816917 BorisTheBlade
BorisTheBlade's picture

Mistakes of Malthusians in the past do not serve as a proof that easily accessible oil is not depleting and no one is using either linear of exponential trend (except for IEA) since Hubbert curve came around: http://en.wikipedia.org/wiki/Hubbert_curve http://en.wikipedia.org/wiki/Logistic_distribution

If you look at the shape of this curve, you'll see that during the growth phase it looks very close to exponential function, which leads many to believe that the growth of whatever % per annum can be sustained in perpetuity.

Sat, 12/18/2010 - 13:37 | 815532 AnAnonymous
AnAnonymous's picture

People in 1910 thought the oil was going to run out by 1940.  Just sayin.

 

No. Some people thought or said.

Taken from the lessons of coal, some people conceived it as a danger to couple an economy to a limited asset like oil.

They fought so that  an oil based economy could not developp. They stressed by any means the limitedness associated to oil. Any means including picturing the issue as more pressing as it were in those times.

Other people fought to couple the economy developpment to the consumption of oil. They played the card "oil is plentiful" in order to make oil central in any  economical developpment.

They had on their side the very fact that oil fields discovery rate was increasing day after day. Very easy to find headlines of oil discovery in 1900's newspapers. 

Some wanted to take decisions when one could. Others wanted to take decisions when one had to.

Others won.

If people had thought that oil would run out by 1940, the centrality of oil could have been mitigated.

At this point in history, oil could have been a predominant alternative energy, not the alpha energy it is now.

Stories about alternative energy sources are way too late by now.

 

Sat, 12/18/2010 - 09:45 | 815306 westboundnup
westboundnup's picture

I saw a recent projection of local traffic 10, 20 and 30+ years out and thought "Doesn't anyone realize that with the price (to say nothing of availability) of oil that far out, traffic is likely to be <50% of what it is today?"  As with other thing, local traffic projections assume endless growth.

Fri, 12/17/2010 - 21:05 | 814513 goldsaver
goldsaver's picture

Im with you there Bruce. Lots of purty words, but no actual analysis or predictions. My prediction? Let me tell you a little story and my apologies for the extra long rant:

 

 The following is an excerpt from an essay written by George Goodman in the 1960’s. I have taken the liberty of juxtaposing our current financial news and some fictional future to the original in order to make the comparison easier to most readers. The original text is in italics in order to make it easier to read.

Before World War I Germany was a prosperous country, with a gold-backed currency, expanding industry, and world leadership in optics, chemicals, and machinery. The German Mark, the British shilling, the French franc, and the Italian lira all had about equal value, and all were exchanged four or five to the dollar. That was in 1914.

Before the turn of the century the United States was a prosperous country. The technological revolution had rapidly increased the standards of living of most of the population. The fall of the Soviet Union, along with the beginnings of fiscal restraint during the 1990’s and the massive increase in revenue brought in to the Treasury by the expanding market, brought the US Federal Government budget to the closest it had been in two generations to a balanced budget. The United States was the leader in computer and networking equipment. The rapidly growing internet required massive outlays worldwide for infrastructure and software, most of it produced in the United States. The US dollar was the world’s reserve currency and traded close to parity with the British Pound, the European Euro, the Japanese Yen and the Australian and Canadian dollars. That was in 2000.

 In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.


In 2013, at the most fevered moment of the US Hyperinflation, the exchange rate between the US dollar and the euro was one trillion dollars to one euro, and a week’s wages could not even pay for a single meal. Most Americans were taken by surprise by the financial tornado.


"My father was a lawyer," says Walter Levy, an internationally known German-born oil consultant in New York, "and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread." The Berlin publisher Leopold Ullstein wrote that an American visitor tipped their cook one dollar. The family convened, and it was decided that a trust fund should be set up in a Berlin bank with the cook as beneficiary, the bank to administer and invest the dollar.

“My father was an HR manager,” says Walt Johnson, an internationally known water consultant in Lima, Peru, “he had contributed to his 401k investments every pay period faithfully. He started it in 1990 and had made maximum contributions even after his mortgage went underwater. By the time he became unemployed in 2012 and cashed out, he bought a gallon of water and a box of ammo. This was before firearms were made illegal.” New York Times publisher Markos Moulitas tweeted that a Chinese visitor tipped the waitress one Yuan. The family convened, and it was decided to purchase a share of Apple Computers with the Yuan as an investment for the future.

In retrospect, you can trace the steps to hyperinflation, but some of the reasons remain cloudy. Germany abandoned the gold backing of its currency in 1914. The war was expected to be short, so it was financed by government borrowing, not by savings and taxation. In Germany prices doubled between 1914 and 1919.

After four disastrous years Germany had lost the war. Under the Treaty of Versailles it was forced to make a reparations payment in gold-backed Marks, and it was due to lose part of the production of the Ruhr and of the province of Upper Silesia. The Weimar Republic was politically fragile.


 In retrospect, you can trace the steps to hyperinflation, but some of the reasons remain cloudy. The information technology business crash, known at the time as the dot com bubble, prompted the US central bank, the Federal Reserve, to lower interest rates in order to stimulate the economy. The US Federal Government abandoned all fiscal restraint and invaded the regions that were then called Iraq and Afghanistan. The wars were expected to be short, so they were financed by borrowing, not by savings or taxation. The Federal Reserve rates, although successful for a while in re-inflating the economy, caused an explosion in home prices. In the US home prices doubled between 2000 and 2007.

After 10 disastrous years the United States abandoned the wars. The bursting of the housing bubble in 2006-2008 caused severe stress to ever extended banks. The banks faced with massive mortgage foreclosures, filed insurance claims against major insurers and financial firms. Financial giants like Lehman Brothers and insurer AIG could not cover the claims. The US government, in an attempt to rescue the financial system, paid the claims shifting the now worthless debt to the public balance sheet instead of the private banks balance sheet. By spring of 2009, the US auto industry, heavily leveraged and with massive labor and retirement costs, demanded that the US government rescue them also. The Federal Government nationalized 2/3 of the domestic auto industries in order to prevent their collapse. The United States was politically divided and fragile.


But the bourgeois habits were very strong. Ordinary citizens worked at their jobs, sent their children to school and worried about their grades, maneuvered for promotions and rejoiced when they got them, and generally expected things to get better. But the prices that had doubled from 1914 to 1919 doubled again during just five months in 1922. Milk went from 7 Marks per liter to 16; beer from 5.6 to 18. There were complaints about the high cost of living. Professors and civil servants complained of getting squeezed. Factory workers pressed for wage increases. An underground economy developed, aided by a desire to beat the tax collector.

But American habits were very strong. Ordinary citizens worked at their jobs, watched popular TV programs and spent their time lost in social media sites. They generally expected things to get better. But most were living in homes they could not longer afford. Prices of staples doubled from 2009 to 2011. Gasoline reached $6.00 dollars a gallon from $2.50. Milk went from $3.85 a gallon to $7.50. Bread from $1.00 a pound to $3.50 for a ¾ pound loaf. People complained about the high cost of living. Although government employees were receiving cost of living adjustments, the private sector workers complained of getting squeezed. Union workers, especially in nominally recovering factories like Ford Motor Corporation, demanded a return to earlier benefits and salary increases. A small grass root movement, nick named the “Tea Party”, arose from the populace to demand changes in government spending and taxation.

On June 24, 1922, right-wing fanatics assassinated Walter Rathenau, the moderate, able foreign minister. Rathenau was a charismatic figure, and the idea that a popular, wealthy, and glamorous government minister could be shot in a law-abiding society shattered the faith of the Germans, who wanted to believe that things were going to be all right. Rathenau's state funeral was a national trauma. The nervous citizens of the Ruhr were already getting their money out of the currency and into real goods -- diamonds, works of art, safe real estate. Now ordinary Germans began to get out of Marks and into real goods.

On June 12, 2011, Lyndon Larouche fanatics assassinated Ben Shalom Bernanke, the chairman of the Federal Reserve Bank. Bernanke was a controversial figure, but the idea that a powerful member of the Federal Government could be killed by a car bomb in the nation’s capital shattered the faith of Americans who wanted to believe that things would get better and that political violence could not happen in their society. Rumors and gossip in the social network sites and talk radio fueled the national trauma. Some nervous citizens had already been getting their money out of the banks and purchasing real goods such as precious metals, food, guns and ammunition. Now ordinary Americans began rushing into the market place to change their currency into real goods.

Pianos, wrote the British historian Adam Fergusson, were bought even by unmusical families. Sellers held back because the Mark was worth less every day. As prices went up, the amounts of currency demanded were greater, and the German Central Bank responded to the demands. Yet the ruling authorities did not see anything wrong. A leading financial newspaper said that the amounts of money in circulation were not excessively high. Dr. Rudolf Havenstein, the president of the Reichsbank (equivalent to the Federal Reserve) told an economics professor that he needed a new suit but wasn't going to buy one until prices came down.

Small farm plots, wrote Canadian historian John English, were bought by city people that had never grown a single crop. Luxury brand items, like coach handbags, were bought by the poor with government assistance cards. Sellers held back because the dollar was worth less every day. As prices went up, the demand for bank credit was greater, and the Federal Reserve Bank responded to the demands. Foodstuffs, skyrocketing in price, prompted the Federal Government to issue additional bonds from the Treassury and issue electronic subsistence cards to the citizens to prevent rioting in the streets. Yet, the ruling authorities did not see anything wrong. Leading financial websites and cable networks would point to the rise of stock prices as proof that the economy was recovering. Nobel Laureate, Paul Krugman wrote articles claiming that the economic recovery could only be accelerated by the Federal Government issuance of more debt.

Why did the German government not act to halt the inflation? It was a shaky, fragile government, especially after the assassination. The vengeful French sent their army into the Ruhr to enforce their demands for reparations, and the Germans were powerless to resist. More than inflation, the Germans feared unemployment. In 1919 Communists had tried to take over, and severe unemployment might give the Communists another chance. The great German industrial combines -- Krupp, Thyssen, Farben, Stinnes -- condoned the inflation and survived it well. A cheaper Mark, they reasoned, would make German goods cheap and easy to export, and they needed the export earnings to buy raw materials abroad. Inflation kept everyone working.

Why did the US government not act to halt the inflation? It was a deadlocked government, especially after the tea party movement had elected their candidates to the congress. The Federal Government, divided along ideological lines, became impotent. The President tried to bypass the congress by issuing a series of executive orders in a vain attempt to manage the economy from the oval office. Congress sued the President and defunded most executive branch agencies to prevent the President from dictating national policy from his desk. The Federal Reserve Bank became the de facto government of the US in economic matters. The great US industry giants, Apple, Microsoft, General Motors, Netflix, condoned the inflation and survived it well. A cheaper dollar, they reasoned, would make US products cheap and easy to export, and they needed the export earnings to prop up their balance sheets. Inflation kept the stock market working.

So the printing presses ran, and once they began to run, they were hard to stop. The price increases began to be dizzying. Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. "If you want to save money," he was told, "and you want two cups of coffee, you should order them both at the same time."

So, the Federal Reserve thru Quantitative Easing, began flooding the banks with credit, and once started it could not stop. The credit demands due to price increases became dizzying. Prices at online retail outlets would update on a minute basis. A house wife in Topeka ordered gifts at Amazon.com and before she could checkout, the prices in her basket had gone up 30%. The online chat support recommended that she chose everything she wanted ahead of time and checked out immediately in order to beat the price increases.

The presses of the Reichsbank could not keep up though they ran through the night. Individual cities and states began to issue their own money. Dr. Havenstein, the president of the Reichsbank, did not get his new suit. A factory worker described payday, which was every day at 11:00 a.m.: "At 11:00 in the morning a siren sounded, and everybody gathered in the factory forecourt, where a five-ton lorry was drawn up loaded brimful with paper money. The chief cashier and his assistants climbed up on top. They read out names and just threw out bundles of notes. As soon as you had caught one you made a dash for the nearest shop and bought just anything that was going." Teachers, paid at 10:00 a.m., brought their money to the playground, where relatives took the bundles and hurried off with them. Banks closed at 11:00 a.m.; the harried clerks went on strike.


The Federal Reserve Bank could not keep up with the credit demands. Individual Sates began issuing I.O.U.s and collecting property taxes on a weekly basis. A school teacher described payday, which was every day at 11:00. “We would all rush to the nearest ATM hoping to get some dollars and do our shopping for the day at Wal-mart before they changed prices or ran out for the day. You needed cash, because if Wal-Mart ran out of food, you would have to go to the corner market and buy food with cash from the back of a pickup. Sometimes an armored truck would arrive at the ATM and we would have to wait until they reloaded the machine just to get some cash”. People would place on line orders for gold and silver with their credit cards knowing that by the time the bill arrived they could sell off the gold at a local pawnshop, pay off the credit card and make a profit.


The flight from currency that had begun with the buying of diamonds, gold, country houses, and antiques now extended to minor and almost useless items -- bric-a-brac, soap, hairpins. The law-abiding country crumbled into petty thievery. Copper pipes and brass armatures weren't safe. Gasoline was siphoned from cars. People bought things they didn't need and used them to barter -- a pair of shoes for a shirt, some crockery for coffee. Berlin had a "witches' Sabbath" atmosphere. Prostitutes of both sexes roamed the streets. Cocaine was the fashionable drug. In the cabarets the newly rich and their foreign friends could dance and spend money. Other reports noted that not all the young people had a bad time. Their parents had taught them to work and save, and that was clearly wrong, so they could spend money, enjoy themselves, and flout the old.

The flight from currency that had begun with the buying of gold, farm plots and luxury clothing now extended to minor electronics and almost useless items. Disposable cell phones, faux jewelry, and name brand jeans were popular. The law-abiding country crumbled into petty thievery. Copper pipe and electrical cable was stripped from empty homes and construction sites. Gasoline was siphoned from cars in mall and airport parking lots. People bought things they didn’t need and used them for barter, portable games for food, leather belts for cigarettes. Rioting became common place in major cities. Prostitutes of both sexes roamed the streets. Common housewives would spend their days in online chat rooms trying to sell themselves. Crack cocaine became a common use drug. In the night clubs the newly rich and their foreign friends, mostly Chinese, could dance and spend money. Young people further disconnected from reality and embraced online societies. Rave clubs became the material world of their online personas and they would live out their online fantasies without any restrictions. Their parents had caused the collapse, so they would not abide by the rules anymore.

The publisher Leopold Ullstein wrote: "People just didn't understand what was happening. All the economic theory they had been taught didn't provide for the phenomenon. There was a feeling of utter dependence on anonymous powers -- almost as a primitive people believed in magic -- that somebody must be in the know, and that this small group of 'somebodies' must be a conspiracy."
 

Talk radio host, Mark Levin wrote: “People just didn’t understand what was happening. All the talking heads on cable TV couldn’t explain the phenomenon. There was a feeling of utter dependence on anonymous powers, almost as a primitive people believed in magic, that somebody must be in the know, and that this cabal of somebodies must be a conspiracy”


When the 1,000-billion Mark note came out, few bothered to collect the change when they spent it. By November 1923, with one dollar equal to one trillion Marks, the breakdown was complete. The currency had lost meaning.

When the 1 Trillion dollar note, the Junior (named after Dr. Martin Luther King Junior) came out, few bothered to collect the change when they spent it. By November 2012, with one Yuan equaling 1 trillion dollars, the breakdown was complete. The currency had lost its meaning.

What happened immediately afterward is as fascinating as the Great Inflation itself. The tornado of the Mark inflation was succeeded by the "miracle of the Rentenmark." A new president took over the Reichsbank, Horace Greeley Hjalmar Schacht, who came by his first two names because of his father's admiration for an editor of the New York Tribune. The Rentenmark was not Schacht's idea, but he executed it, and as the Reichsbank president, he got the credit for it. For decades afterward he was able to maintain a reputation for financial wizardry. He became the architect of the financial prosperity brought by the Nazi party.


What happened immediately afterward is as fascinating and the Great Inflation itself. The tornado of the dollar inflation was succeeded by the “miracle of the mineral credit”. Newly elected President, Chris Christi, appointed Allan Mulally CEO of Ford Motor Corporation, as the Secretary of the Treasury. In March 2013, Secretary Mulally presented President Christi a plan to replace the Federal Reserve Notes with a new currency. The mineral credit was not a new idea. It was similar in basic concept as the German Rentenmark of the 1920s but with a very American twist. Secretary Mullaly ordered an inventory of all mineral assets owned by the US, oil, natural gas, timber and precious metals. He ordered the US mint to coin all gold and silver owned by the US for immediate circulation as hard currency and to issue to the newly created third bank of the US credits based on the market value of the mineral assets. This new currency would float based on the monthly value of the minerals and the inventory of assets, audited quarterly. An initial exchange rate of 1 credit per billion Federal Reserve Notes was established to pay back outstanding debt and ease the transition from notes into the new credits. Although the Federal Reserve Bank and its notes were not abolished, the notes themselves became worthless and the reserve ended issuance by July of 2013.


Obviously, though the currency was worthless, Germany was still a rich country -- with mines, farms, factories, forests. The backing for the Rentenmark was mortgages on the land and bonds on the factories, but that backing was a fiction; the factories and land couldn't be turned into cash or used abroad. Nine zeros were struck from the currency; that is, one Rentenmark was equal to one billion old Marks. The Germans wanted desperately to believe in the Rentenmark, and so they did. "I remember," said one Frau Barten of East Prussia, "the feeling of having just one Rentenmark to spend. I bought a small tin bread bin. Just to buy something that had a price tag for one Mark was so exciting."

Obviously, though the credits were worthless, The United States was still a rich country, oil deposits, natural gas and minerals under Federal control were abundant. The backing of the credits was the value of the resources; but the backing was fiction; the US never intended to sell any of those assets in the open market. Nine zeros were struck from the old currency; that is one credit equaled one billion Federal Reserve notes. Americans wanted so desperately to believe in their currency and return to normalcy, and so they did. The issuance of hard currency helped them believe. “I remember,” said Mrs Potter from Topeka, Kansas, “the feeling of having that silver dollar to spend. I bought me a new handbag. Just to buy something that had a price tag of one dollar was so exciting.”

All money is a matter of belief. Credit derives from Latin, credere, "to believe." Belief was there, the factories functioned, the farmers delivered their produce. The Central Bank kept the belief alive when it would not let even the government borrow further.

All money is a matter of belief. Credit derives from Latin, credere, "to believe." Belief was there, the factories functioned, the farmers delivered their produce. The restrictions of the mineral credit kept the belief alive when it would not let even the government borrow further.

 

 

Fri, 12/17/2010 - 21:49 | 814629 Mark Medinnus
Mark Medinnus's picture

And on the other hand, brevity is the soul of wit.

Sat, 12/18/2010 - 00:34 | 814945 trav7777
trav7777's picture

no shit, who could read all that crap?

Sat, 12/18/2010 - 07:24 | 815275 BigDuke6
BigDuke6's picture

i'm totally baked so found it engrossing.

 

although i'm getting a bit fed up of hearing wiemar germany all the fracking time.

Sat, 12/18/2010 - 01:37 | 815045 Future Jim
Future Jim's picture

One difference is that many countries - not just the US - are now in the same boat that Germany was in. Another difference is the Internet. I think these are big differences that will make this time around fundamentally different from the Weimar Republic.

Fri, 12/17/2010 - 21:06 | 814519 no cnbc cretin
Fri, 12/17/2010 - 22:30 | 814707 samsara
samsara's picture

I agree,  Stoneleigh is spot on.   Great Site

Fri, 12/17/2010 - 22:27 | 814701 Teaser
Teaser's picture

This is an easy one.  The shape of the World in 2020? 

 

I'm betting on round.

Fri, 12/17/2010 - 23:09 | 814778 iota
iota's picture

Win.

Fri, 12/17/2010 - 23:49 | 814870 UGrev
UGrev's picture

Fail. Try Oblate Spheroid. 

Tue, 12/21/2010 - 21:41 | 822875 iota
iota's picture

I was gonna say techninically it's not a sphere as a reply, but I removed my head from my ass first.

Fri, 12/17/2010 - 23:00 | 814762 TheGoodDoctor
TheGoodDoctor's picture

Leadership is co-opted for the development of the NWO. I am not sure of all the power structures across the globe. IE global elite. It seems China and its companies are thinking in 100 year increments VS the quarter long increments of the US.

With China buying up all the natural resources, not exporting resources, and also buying up resource assets of all kinds regardless of what country they are in, I think China will kick most everyone's ass.

The US is too shortsighted. And with all of our debt I'm not sure we can pull through.

The leadership the author discusses would be very radical compared to what we have had for the last 40 years. I'd love to see it happen, but I fear it will be the same old same old.

Sat, 12/18/2010 - 00:35 | 814946 trav7777
trav7777's picture

whose army is sitting on the oilfields and whose navy and base structure has the other surrounded?

Sat, 12/18/2010 - 00:44 | 814961 CIABS
CIABS's picture

depends on what "buying up" means.

Sat, 12/18/2010 - 13:08 | 815498 TheGoodDoctor
TheGoodDoctor's picture

Means both "stockpiling" and Chinese companies buying up natural resource assets globally.

Fri, 12/17/2010 - 23:04 | 814771 SwingForce
Sat, 12/18/2010 - 00:06 | 814892 honestann
honestann's picture

No, we do NOT need leadership... just the opposite.

The whole notion of "leadership" is largely the problem!

That notion presumes humans should be led by others.  What the world needs is totally and precisely the opposite.

We need a world in which everyone leads themself, and nobody else... a world without governments and gigantic monster, artificial, fictitious "corporations".

In such a world, everyone is free to think for themself, choose for themself, act for themself, do their own thing, and enjoy/bare/suffer all the consequences of their actions, and enjoy/bare/suffer zero consequences of the actions of others.

Meanwhile, everyone is free to look around, see what everyone else is doing, see what are the consequences of those ideas and actions, and perhaps pick and choose elements they consider desirable for their life.

In such a world, everyone can improve their life... and decide for themselves what "improve" means.

The contrast is the world of today, the world of leadership, where the most successful authoritarian predators decide how everyone shall think and live.  This is precisely the nature of every aspect of the current system - to force everyone to live however the predators-that-be want them to live (everyone shall have compliant health insurance).  Well, the predators-that-be and the predator class want everyone to live for them.  That's what predators always want... to suck the life out of everyone else.

Somehow, humans need to wake up, shake off the many forms of insanity that were programmed into their consciousness by friends, family, school, church, government and other purveyors of bogus ideas, endless fictions, and the supposed "correct answers".  Otherwise the entire planet will become a single uniform bland slave planet.  From my perspective, it already is.

What we need is total collapse.  The current system is absolutely unworkable, because it is monotonically leading humans to be destructive, not productive.  If this system is not completely collapsed and replaced with a new individualist system, life will continue to degrade until billions of people literally die.  This is what happens when incentive to destroy is huge (banksters, government), and incentive to produce is low to zero to negative... and that is the way the current system has become.  To work and produce is now a suckers game, and increasing numbers are tired of being suckers.

No more leaders.  No more leadership.  Just leave us alone, and let us sink or swim.  Simple enough.

Sat, 12/18/2010 - 00:54 | 814970 StarvingLion
StarvingLion's picture

"...let us sink or swim"

Oh sure, 7+ billion individuals are going to thrive! HAHAHAHA.  Dude, it can't possibly happen. 

And thats the problem with your individualistic paradise: You can't swim in (or eat and drink)gold coins.  The water will be dirty.  Then some will organize and try to grab someone elses.  Get it through your thick skulls, Goldbugs:

THEY AREN'T GOING TO LEAVE YOU ALONE

Sat, 12/18/2010 - 02:29 | 814981 honestann
honestann's picture

It can't possibly happen... correct, as long as the producers of this world allow the top-level predators run everything.  However, if a small percentage ever wake up, grow some balls, and take them out... then yes, 7 billion humans can indeed thrive.  After all, do you honestly believe those predators produce anything --- except misery?

Of course we don't eat gold.  We have no intention to eat gold.  We have gold as a means of savings, until we are ready to exchange our gold for real, physical (and hopefully productive) goods.

They may not leave us alone, but gradually more and more of us will "just say no" to being a slave.  They may kill many of us for not licking their boots, but many of us will avoid them.  They can stick it.

Just because "predators do not leave you alone" is no good reason to enslave yourself to those predators.  Got that?

Sat, 12/18/2010 - 01:58 | 815078 Whatsthedeal
Whatsthedeal's picture

My thoughts exactly honestann.  Crazy how rape victims defend the rapist, not most ZHer's but the general population.

Sat, 12/18/2010 - 01:59 | 815081 Whatsthedeal
Whatsthedeal's picture

My thoughts exactly honestann.  Crazy how rape victims defend the rapist, not most ZHer's but the general population.

Sat, 12/18/2010 - 03:28 | 815190 Cdad
Cdad's picture

honestann,

You know, I can go along with you on "we need a total collapse."  I agree.  I'm there with you.  If things stay the way they are, we will not be able to heal from this pesky "economic downturn" thingy that has been going on.  True...clean everything out...so that capital can once again form with confidence.  I say just tear down the Roach Motel [SPY] for example.  As well, get rid of zombie banks, zombie politicians, and zombie Apple consumers [although on that last count, that's a different story].

However, you seem to be hung up on a couple basic principles, namely leadership and freedom.  We can have both, you know.  In fact, the road map for that combo is clear.  It is called the US Constitution.  We don't need to go all flesh eating zombie apocalypse [although those Apple consumers may just force our hand on that].  We don't need to suddenly reinvent every single thing that ever was...which would most certainly be time consuming.

Look, people do need cohesion, but I can agree with you that we do need change...or what you refer to as a collapse. 

Just sayin' I guess...

Sat, 12/18/2010 - 15:59 | 815734 honestann
honestann's picture

It depends on what you mean by "leadership".  Some people identify a company that makes the best product, and say they have "leadership".  That's a poor choice of words, I think, but I'm okay with that kind of "leadership".  In fact, in my message I talk about people observing the actions other people take, identifying the consequences of their actions, then adopting those actions that have consequences we desire.  If someone takes actions that have consequences that boatloads of people would like, you could say they are a "leader" in that respect... because others voluntarily follow their example.

Yes, I understand what you say about the US constitution.  But take a wander down to the local airport and watch 100% of the people being physically molested and their constitutional rights being overtly trampled.  Why has nobody machine gunned down these serial molesters?  My point is, what is the point of the constitution if it has no effect?  And today, it has no effect.  None.  If you want to "fix" the constitution, you need to add a provision that makes it 100% lawful to execute any politician or government worker who proposes, votes-for, or enforces a law, statute, regulation or mandate that violates the rights of any human being.  Sure, make them prove in court that the person they killed did in fact propose/vote-for/enforce a violation of fundamental rights.  In the world of today, every single politician with the possible exception of RonPaul should be executed immediately.  When only the predators have the ability to hold themselves accountable... game over.  And that's what we have today.

I'm not sure why anyone needs to re-invent anything.  I'm just saying let people look around and choose for themselves the actions that make sense for themselves.

Sat, 12/18/2010 - 18:23 | 815975 Cdad
Cdad's picture

Honestann,

What?  Huh?  You lose me right out of the gate.  How or why could or would a person or a gerbil mistakenly or intentionally confuse leadership with products?  It sounds like you are trying to make a point that is a bad point...and you already know it...which leads me to wonder why, if you already new it was a bad point...why did you post it?

As for the rest of this, which seems to reduce down to killing a couple people, again, what the hell are you talking about?  Look, if you are angry, I would understand.  You could just say, "Cdad, I am so angry at all of the unconstitutional crap going on...aren't you?"  And I would be like....YEAH, I'm angry, too.  But killin' folk?  Ron Paul?  Seriously.

The revolution before us is WAY MORE SIMPLE than that.  I've said it before, and I'll say it again...ready...close your wallet.  There.  Viva la Revolution.  Couple years from now, all these crony capital companies and zombie like politicians will come staggering all zombie like out of NY, NY and DC. 

Get a grip, it is a war against stupid people with dumb values who are also clueless about what is going on around them and also, simultaneously, think they are [still] invisible.  LOL!

So leadership and product placement and guns and killin' is just stupid and totally off the point I made in response to your point...so if you don't mind my sayin'...why don't you get in the game already?

And please receive my apology for being terse with you because I just lose my patience at times...but I don't mean anything by it.

Cdad

Sat, 12/18/2010 - 22:22 | 816313 honestann
honestann's picture

You said we need leadership, or that leadership is compatible with liberty and freedom.  I was just trying to figure out what you meant by that, and gave a couple examples of situations that some people attach the world "leadership" to.

You are clearly one of the many people who believe humans should not be punished for their egregious crimes if they claim they are some kind of "authority".  Well, you are totally wrong.  If someone molests you, you are 100% totally justified to beat the crap out of them, or blow their freaking brains out, or whatever is necessary to defend yourself.  And if that scumbag who is molesting you is wearing a TSA uniform, that uniform changes nothing whatsoever.  And the people who hire and pay those thugs are equally guilty, and justice demands they also be shot on site.  Now, I fully agree that this would not be justified if we lived in a world where you could call for a cop, have the guy arrested, and show up at a criminal trial to testify against him, and have him locked away.  However, in the system we have today, in this situation the cops you called over will also molest you, and they will assist and defend the criminal predator, not you the victim.  In this situation you damn well are 100% justified to blow their freaking brains out.  I mean, really!  These cretins are molesting hundreds of people every day.  To NOT stop them is criminal... and the only reason NOT to blow them away is your possible decision to not take the risk.  But you damn well have a perfect right to defend yourself against self-proclaimed authority to abuse the crap out of hundreds of people every day.

I totally agree about the "close the wallet" approach.  I converted all my paper wealth into real, physical silver and gold years ago, and I avoid doing anything that aids and abeds those slime.  But that will not be sufficient, because the vast majority of humans are braindamaged by public education, mainstream media, religion, BS from family and friends, etc.  So yes, what you propose should work, but in the real world we live in, this will not work.  I certainly wish it would.

The slide into predatory totalitarianism is far past the point of being funny or LOL.  Anyone who still thinks this is a funny joke is delusional.

I've been in the game for decades.  I've done 10,000 times as much as anyone else I know, and it has made zero difference for exactly the reason I mentioned above.  Product placement has nothing to do with anything, you're totally missing my point.  I'm permanently leaving the USSA in T minus 4 months and counting, which is yet another major effort to avoid the predators-that-be and the entire predator class.  So yes, I am taking major actions in my life, just as I always have.  I would have "stayed and fight" as people say, but virtually nobody else is willing to take any real actions.  They believe the predators will "stand down" because you vote a few times in your life, or because a few thousand people close a bank account, or because 20,000 people buy silver coins.  That is vastly insufficient.  Like most people who have been sliding down this slippery slope for years, and are not approaching the cliff, you talk about trivial actions that have not worked, that will not work, that can not work.

I'm tired of lame ass talk.  I have always walked the walk in various forms, and I shall continue to do so.  And I am quite clear about what is the appropriate, ethical response to people who lie to you, steal from you, defraud you, work against you their entire lives, and enslave you in every way they can.  The do deserve to have a bullet right between their eyes.  Hell, they deserve that for taking those kinds of actions against one individual.  Yet people like you seem to believe they do not deserve any punishment at all for taking those kinds of actions against 311 million people, year after year after year after year.  Well, wake up fool.  They are predators, and they need to be taken out.  Otherwise you and the rest of the wimp asses in the USSA will be totally enslaved in a matter of a couple dozen months, after which you will find tens of millions being killed off by these same predators.  Just watch.

Sat, 12/18/2010 - 22:55 | 816361 Cdad
Cdad's picture

Honestann,

What ever.  Listen, either stop taking the "hate" pills, stop taking the "stupid" pills, or stop taking the "Hong Kong" pills.

Not sure which junky you are, but I wish you well.

Cdad

Sun, 12/19/2010 - 00:09 | 816466 honestann
honestann's picture

You go ahead and continue to take the stupid pills, and allow serial molesters to maul your body, and serial predators to lie, cheat and steal endlessly from you.  You... and everyone else who is perfectly happy being raped every day of your life is the problem, because you sanction and encourage the predators.  Like I said, I'm leaving because you are typical.

Sat, 12/18/2010 - 00:44 | 814955 StarvingLion
StarvingLion's picture

I bet by 2020 the ultrarich 1% come to grips with a problem they had an inkling about but totally underestimated:

Extremely Rapid Oceanic Ecological Collapse

The irony is that deindustrialization due to oil production problems will actually make the problem worse.

Or stated another less palatable way: Gotta get rid of 4 billion people yesterday.  Peak oil is a day in the park compared to this.

Sat, 12/18/2010 - 00:46 | 814963 honestann
honestann's picture

What we really need to get rid of are the 4 thousand topmost NWO predators who actually spend their time, effort and resources planning how to kill off 95% of humans.  Then we can spend our time, effort and resources solving the "big problems", all of which are quite solvable.

Sat, 12/18/2010 - 05:23 | 815242 jahbless
jahbless's picture

Bill Catton Jr - Overshoot. Awesome book written by awesome brain on resources depletion, cargoism (!!) and ghost acreage.

We should have read it when it came out, back in 1982.

Sat, 12/18/2010 - 11:04 | 815352 gwar5
gwar5's picture

I think 2020 will look about the same only better.

The debt depression we're in won't be offset by the Bernank printing presses. So the Bernank will finally be forced into using our gold reserves as gold standard at $5000/oz, with a 40% gold backing.

Problem solved, except for the criminal banking class who will have found a way to convert their toxic assets for public gold by then.

Sat, 12/18/2010 - 11:08 | 815355 MrSteve
MrSteve's picture

Hari seldon's psychohistory was accurate in its predictions to 99.9+% confidence. Referencing Kindleberger, D.H. Fischer, and Sidney Homer's History of Interest Rates ((a FREE ebook for you newbies.. at http://ebookee.org/A-History-of-Interest-Rates-Wiley-Finance-_2733.html.)), it seems ludicrous that a 10 year forecast from today would omit the near-certainty of a new revaluation of the current reserve currency and continued domestic political fracturing in the USA. Typical first Seldon Crisis...

Sat, 12/18/2010 - 11:26 | 815368 dizzyfingers
dizzyfingers's picture

" lose faith in the institutions of governance and leadership succession."

Ouch. Truth is painful.  

Sat, 12/18/2010 - 12:16 | 815408 rlouis
rlouis's picture

The US is facing a tripple-whammy: the simultaneous collapse of the fiat currency, socialism and empire.   Each of these three have long histories of failure. Perhaps empire is the longest lasting, but it can't carry the other two.    It's ironic, perhaps, that our last military occupation may be Afghanistan, 'The Graveyard of Empires'.

Sat, 12/18/2010 - 12:28 | 815417 BigMike
BigMike's picture

The article didn't mention the likelihood of the black swan.

Sat, 12/18/2010 - 13:29 | 815520 razorthin
razorthin's picture

We make it to 2020?  How incredibly optimistic of you, TD.

Sat, 12/18/2010 - 13:37 | 815530 the grateful un...
the grateful unemployed's picture

The global economic experiment will end. Major emerging nations will collapse, unable to change quickly enough to match their level of economic growth. There will a second cultural revolution in China, and a dark ages. The Japanese will also revert into feudalism. Asia tried to develop too quickly while the cultural base was too long on traditional tribal values. Europe and it's surrogate, America, will survive, having a shorter cultural footprint. We have no past to hold us back, and we control the current technologies.

Americans have sacrificed a great deal to make this global economy a level playing field, our currency is worthless, our people restless. Now we go back to where we were before WWII, a nation of individualists, a vertical economy, and a political system which supports innovation, less government interference, and we succeed having fewer of the ancient and traditional codes which  hold back other countries. Russia cannot shake its gangster capitalism, Europe is too deeply socialistic, the residue of failed empires. America once again rises to the top.

We are rich and successful by 2020, surprising all the doom and gloomers, who moved to South America, who wrote endlessly about the decline of the empire. If anything the empire gets larger, with a second wave of acquisitions, Mexico, parts of Canada, so that the US extends all the way to Alaska. Americans will be much richer than any other nation. This time they throw roses at our feet, because we bring the trappings of a system which actually works. But first it takes a real purge in American politics, recriminations, and criminal trials, to restore the rule of law, and rescind the moral relativism which marked the first global economic experiment, one in which socialist and prison labor was given the same privilege as educated and freedom loving American labor.

Many people will want to be American, they will create Little Americas all over Central Asia. The moment of awakening comes when the people of Afghanistan reject the brutal tribal law, and apply to be an American protectorate.

We just have too many offers to accept all of them, sorry. The world glows in the age of Americanism. After the great crash, America rises up faster than anyone, just as it did after WWII.

Enjoy your future Americans, and all who want to be. There will be some difficult moments, trials, the system put on trial, but it will all be worth it. The Presidents and leadership of the late 20th century will be looked at as curious anachronisms, the bad time in America, corrupt and venal, it will all be washed away starting in 2020.

Sat, 12/18/2010 - 14:09 | 815571 AnAnonymous
AnAnonymous's picture

Either ironic or extremelly delusional.

The US past is a tremendous thorn. Since the beginning, the US have been pushing for reinstalling the very sort of society they tried to destroy , quoting that destruction as their reason to be.

More and more, the US society is showing strong signs of turning into a society of nobles with inherited priviledges.

Some european countries, thanks to their past, shall be able to sugar coat the last 300 years as a bad idea and a mistake by calling forth a mythical past. The material is there, the blue prints are there to handle a transition to a new societal paradigm.

For the US, there is no turning back. The ideas the US propagate as their fundational myth have been constantly defeated by US citizens themselves.

But no other past is available to the US. They know nothing but their original myth. As the US capacity to extract resources from an exterior will keep declining, the opportunity to pour wealth onto the population to lull it appeased will keep declining.

The US have made their unique experiment a fail or die experiment. No escape door.

The US' isolationism was to focuse on the colonization process of the Indian lands. The whole 19th century US growth was build on the Ponzi of pyramiding the Indian lands theft. Always more land to be theived by tomorrow. When this Ponzi failed by lack of land, great depression.  

Later, the start of foreign adventures as the  expansion plan on Indian  lands could no longer be sustained as there were no  longer Indian lands to expand on.

The US has not sought to level the world playing field. On the very contrary. The US has always sought to concentrate as much as possible of the wealth that could be extracted from the world on the US territory. Levelling the playing field would have meant more wealth captured by the other players.

The US has always supported a race to the bottom when it comes to the other countries through their outsourcing handlement of things. The best way to concentrate wealth as much as possible. 

Many other points to address but...

Sat, 12/18/2010 - 15:35 | 815701 the grateful un...
the grateful unemployed's picture

See i think you make my point, the American empire is still in its formative stage, starting soon we will consolidate power, share less of the wealth, and take more for ourselves. That suggests a stronger empire, after we break ties with the French egalitarian idealiistic prose written on the SOL behind. You somehow imagine that the first two hundred years were the exercise of American power, that's not the case at all, we were isolationist until WWII. Our minor expansions, the Am West, Mexico, were poorly organized, and half heartedly pursued. We have barely awakened.

The American brand will be exported to anyone who wants it, and the failure of the Communist Socialist systems to meet the needs of an increasingly technologically dependent species will make America the dominant empire. Much like Rome, (someone said during Iraq, if you consider the American occupation unjust, imagine how Rome would have done it. They would have killed everybody) The US will be more assertive, less tolerant of other than Democratic regimes, but accommodating to the like minded regimes around the world. Nothing works as well as what we have, nothing. Americans are reluctant to embrace power, they distrust it, but the exercise in coddling nascent dictatorships and centrally planned authoritarian regimes is over.(and those who promoted the global economy while failing to measure the worthiness of other nations to trade with us, they will be shamed, jailed, and ridiculed)  We will cut the Chinese and the Russians loose, and use out best resources, financial, technological and cultural, to  make America the envy of the world. Everyone else will learn to emulate our model, or wallow in their own failure, cycles of revolution, despair and subjugation by their own governments. We will not go there, the age of America, after we settle these accounts, will be good for centuries.

Sun, 12/19/2010 - 12:03 | 816879 AnAnonymous
AnAnonymous's picture

The US has not shared the wealth. On the very contrary. Currently, the US moves an amount of the exterior wealth for a fraction of it.

Of course, in patterns like that, the bigger the fraction is, the bigger the amount grows. It is not sharing wealth, it is speeding the wealth transfer rate.

And it will diminish not because of US volition but simply because the scheme is running dry of resources to import. Simple as that.

Yes, the first two hundred years were an exercise of American power. Subdued people poorly organized or not. It does not matter. Simple statement of fact.

The US revolution was built against the British royalty system. French idealism had little to do with it. Rousseau was a swiss. The only french legacy that can be thought of i n the US and that will kick the bucket in the US is the french analysis on the confusion of powers that led to the scheme of division of power between judicial, legislative and executive powers. The divisions are collapsing with clear encroachments from various powers onto the others'turf.

The tolerance of the US will be similar to the current flavour. Why would it change? If a country yields the pursuit of their best interests in favour of a complete subjugation to the US ' best interests, it will flow fine. System of governance, ideologic system, they have not mattered and will not matter. Countless examples.

With the US, it is better to be a compliant tyranny than a reluctant democracy. 

Killing every body is a pipe dream. As everyone, the US is limited by the ssytem they rely on.

The US has grown the best extorter of the weak, the best farmer of the poor in human history.

This said, they have to comply with the compulsory requirements coming with the exercize.

Extortion does not allow the extorter into killing all of the extorted. Messages can be sent by killing some of the extorted but all of them is impossible. It would kill the extorter as the extorter lives off the back of the extorter. The US need the Iraqis to extort from them. They could not have killed them.

An extortion/farming scheme can not be extended to everyone. It is self limiting and cannot be a universal condition. The extorter is who he is because of the existence of the extorted.

Therefore speaking of emulating a model is irrelevant. There is nothing to emulate. Either the extorted get out of the sphere of the extorter or they dont. And extorting/farming have worked for ages.

If the US citizens were reluctant to embrace power, they would not have maintained a scheme of slavery, this from the very beginning.

Etc...

There is nothing true in the US. Only their duplicity.

Sat, 12/18/2010 - 13:45 | 815548 Miramanee
Miramanee's picture

By 2020, the U.S. will more resemble Samoza'a Nicaragua than the republic formed by our ancestors:

http://www.xtranormal.com/watch/8133159/

Sat, 12/18/2010 - 18:04 | 815941 Thomas
Thomas's picture

delete

Sat, 12/18/2010 - 19:37 | 816060 anony
anony's picture

"......if present trends and characters remain...."

Big IF.

9 years back, I doubt 1) anyone predicted that their investments in the broad market would have gone essentially nowhere, 2) that the Primary Dealers would be exposed buck naked as owning the US Treasury and therefore the government, 3) that jewish interests would have been exposed as wheedling their way into every crook and nanny of finance in the galaxy and stealing money right in front of us and telling us to kiss their asses. 

One wonders about what monstrous chicanery they are now cooking up that we will look back on in 2020 as being impossible to conceive.

One thing for sure: the educated and uneducated middle class will have lost a hell of a lot more hunnerts of millions from their ranks, their chirren will be on a British-like dole for their entire lives, and the really savvy folks will have departed the U.S. for more fertile grounds.

 

Sun, 12/19/2010 - 03:34 | 816673 onlooker
onlooker's picture

So in 2000 who would have thunk 2010 would have been as it was. We really dont know what we dont know, like what is 2011 gonna be like. cant wait

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