Friday, February 20, 2009

Change we can believe in?

It's February and the market is down almost 25% since Obama was elected. The major financials have lost over 30% of their remaining value since Obama announced his non-plan to "save" the banks two weeks ago. We've got people like Rick Santelli on CNBC Thursday doing a major league rant about government subsidizing 'bad behavior' and calling for a "Chicago Tea Party". Meanwhile GM seems to have written off Saab and thrown it to the wolves/creditors. And today's market is just barely above its 2002 low of 7286. That's before adjusting for inflation. The volume of wealth that is being destroyed around us is monumental and we are not going to be able to pay for everything we think we deserve much longer. In fact, at the pace we're destroying wealth, the United States will be a very backward nation in a few more years.

Friday, February 13, 2009

What Does a Likely Collapse Scenarios Look Like?

The most likely short term collapse scenario that I can envision is similar to what was described in Lessons From Argentina's Economic Collapse (PDF). That would be a financial implosion so drastic that it basically either collapses central government or leaves central government so ineffective that it might as well not exist, at least in terms of providing services. The least likely short term collapse scenario that I can envision is global thermonuclear war. But saying it is the least likely doesn't mean you should ignore it. It simply means that an extraordinary number of conditions would have to line up in the short term for that to occur.

What's Wrong with "Coming Chaos? Maybe Not"

Preface: I recently decided to write about collapse scenarios in response to a really bad article over at TOD. But as I began working through how to present this problem, I realized that it was far too large for one article and might need several of its own. So watch for more articles on the general topic of collapse scenarios over the next few months. This first article addresses the flaws in the article that I recently read over at TOD.

One of the problems with the recent Coming Chaos? Maybe Not article at TOD began with horrendous assumptions. Among those assumptions is the time worn cliche that "doomers" are preparing for "Mad Max" and nobody can survive "Mad Max". Here's the opening statement from that article: "A sizable subset of what some on this site call “doomers” are convinced that the demise of the petroleum economy will bring social breakdown and a violent struggle of all against all." Such a blatant strawman should never have been put in any article by anyone seriously researching the "doomer" community, yet the Coming Chaos? Maybe Not article began with that assumption then attempted to disprove it when it wasn't even valid!