by Simon Black: What
Are the Social Implications of Economic Collapse?
Over the last
days, I’ve endeavored to explain why the economic reversal
of fortune in the west is unstoppable… and what the social
implications of this decline will be.
and social upheaval are inextricably linked. This is not some doom
and gloom conjecture, but rather simple historical reality: when
you take away people’s livelihoods and their abilities to put
food on the table for their families, turmoil reigns.
during its millennium economic crisis… Zimbabwe during its
hyperinflationary period… Japan during its lost 2-decades…
Germany in the interwar period… Rome during the reign of Tiberius…
Russia after the fall of communism…
There is a
common element in each of these examples – even just a few
years before the economic turmoil began, nobody would have expected
If you had
told an Argentine in the mid 1990s that he would be digging for
food out of a trash dumpster in a few years, he would have been
insulted. If you had told a Japanese businessman in 1984 that he
would spend the next decades floundering in stagnation, he would
have thought you were crazy.
you have said in 1995 if someone told you that government agents
would fondle children at airports while stagflation takes over the
economy and the government borrows money just to pay interest on
the money it has already borrowed?
balance sheet is deteriorating by the hour, and lenders will require
a higher return to compensate them for this additional risk. Consequently,
government borrowing costs will rise, making the situation even
interest expense will cause them to borrow even more money and go
deeper into debt until one of two things happens: either the Federal
Reserve debases the currency to its intrinsic value, or the US government
is catastrophic. If the US defaults on its debt, it would set off
a chain reaction of derivatives that would bankrupt the entire financial
system. If the Fed debases the currency, Americans will be left
holding worthless dollars that can’t even be used as toilet
you can expect the government to declare war on its citizens, raising
taxes to feudal serf levels in order to pay for their largess, and
imposing police state conditions to keep everyone in check.
So – what
is one to do about this? There are a few options.
1) Do nothing.
You can always stick your head in the sand and have faith that your
‘leaders’ are going to work out the problems, because,
hey, collapse could never happen here… right? This option obviously
worked out well for the Argentines, the Japanese, the Germans, the
Romans, etc. who thought the same thing.
and fight”. This is a nonsense solution. There is no enemy
to fight… these issues were not caused by a single person but
by the very institution of government. People who talk about political
solutions have no understanding of the problems – try getting
155 people to agree on specifics. Now try 155 million.