Thursday, November 11, 2021

Gregory Mannarino, "Global GDP Is Plummeting And Real Wages Are Cratering"

Gregory Mannarino, AM 11/11/21:
"Global GDP Is Plummeting And Real Wages Are Cratering"

"How It Really Is"

 

"Veterans Day, November 11, 2021"

With respect, honor and gratitude we
thank you for your service and sacrifice!

"They Have Lost Control, And Now The Dollar Is Going To Die"

"They Have Lost Control, 
And Now The Dollar Is Going To Die"
by Michael Snyder

"I think that they actually believed that they could get away with it. I think that they were actually convinced that they could create, borrow and spend trillions upon trillions of dollars without any serious long-term consequences. But they should have known better. The people running things are very highly “educated”, and after spending decades getting to their current positions they are supposed to be “experts” that we can trust with very difficult decisions. Unfortunately, the “experts” have put us on a path that leads to currency collapse and financial ruin.

All throughout history, there have been many governments that have given in to the temptation to create money at an exponential rate, and it has ended badly every single time.So our leaders should have known better. But it is just so tempting, because pumping out money like crazy always seems to work out just great at first. For example, when the Weimar Republic first started wildly creating money it created an economic boom, but we all know how that experiment turned out in the end.

This week, the mainstream media is full of talk about inflation, and many of the talking heads seem mystified that things have gotten so bad. But anyone with half a brain should have been able to see that this was coming. Just look at what has been happening to M2 since the start of the pandemic.
What we have been doing to the money supply is complete and utter lunacy, and this is inevitably going to kill the U.S. dollar eventually. Next, I would like for you to take a look at how rapidly the Fed balance sheet has been rising. This is the sort of thing that you would expect to see in a banana republic.
I think that our leaders deceived themselves into thinking that they could get away with creating money so recklessly, but they haven’t.

Very painful inflation is here, and on Wednesday we learned that prices have been rising at the fastest pace in more than 30 years…"The consumer price index, which is a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% from a year ago, the most since December 1990. That compared with the 5.9% Dow Jones estimate. On a monthly basis, the CPI increased 0.9% against the 0.6% estimate."

If inflation continues to rise at about 1 percent a month, it won’t be too long before we are well into double digits on a yearly basis. Of course I don’t actually put too much faith in the inflation numbers that the government gives us, because the way inflation is calculated has been changed more than two dozen times since 1980. And every time the definition of inflation has been changed, the goal has been to make inflation appear to be lower.

According to John Williams of shadowstats.com, if inflation was still calculated the way it was back in 1980, the official rate of inflation would be close to 15 percent right now. This is a real national crisis, and it isn’t going away any time soon.

One of the factors that is driving up the overall rate of inflation is the price of gasoline. If you can believe it, the price of gas is almost 50 percent higher than it was last year at this time…"Gasoline prices last month shot up nearly 50% from the same month a year ago, putting them at levels last seen in 2014. Grocery prices climbed 5.4%, with pork prices up 14.1% from a year ago, the biggest increase since 1990.

Prices for new vehicles jumped 9.8% in October, the largest rise since 1975, while prices for furniture and bedding leapt by the most since 1951. Prices for tires and sports equipment rose by the most since the early 1980s. Even Joe Biden is using the term “exceedingly high” to describe the current state of gasoline prices."

Other forms of energy are also becoming a lot more expensive…"The price of electricity in October increased 6.5% from the same month a year ago while consumer expenses paid to utilities for gas went up 28%, according to numbers released Wednesday by the U.S. Bureau of Labor Statistics. Fuel oil rose 59%, and costs for propane, kerosene and firewood jumped by about 35%, the data show." It is going to cost you a lot more money to heat your home this winter. I hope that you are prepared for that.

Speaking of homes, they continued to shoot up in price during the third quarter…"The median price of single-family existing homes rose in nearly all - 99% - of the 183 markets tracked by the National Association of Realtors in the third quarter, with double-digit price increases seen in 78% of the markets. If our paychecks were rising fast enough to keep up with inflation, then at least our standard of living would remain the same. But that isn’t happening, is it?

In fact, the Labor Department’s own numbers show that real average hourly earnings are going down…"The Labor Department reported Friday that average hourly earnings increased 0.4% in October, about in line with estimates. That was the good news.

However, the department reported Wednesday that top-line inflation for the month increased 0.9%, far more than what had been expected. That was the bad news – very bad news, in fact. That’s because it meant that all told, real average hourly earnings when accounting for inflation, actually decreased 0.5% for the month." What this means is that our standard of living is going down. And it is going to keep going down.

In a desperate attempt to maintain the status quo, many Americans are taking on more debt than ever before…"American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again. Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday."

How in the world did we allow ourselves to get 15 trillion dollars in debt? Of course many would point out that the federal government is an even worse offender. Very shortly, the U.S. national debt will cross the 29 trillion dollar mark. As our leaders in Washington continue to engage in the greatest debt binge in world history, the U.S. dollar will steadily lose value. This is going to deeply affect everyone and everything in our society. For instance, just check out the pain that inflation is causing for one food bank in the San Francisco area

"In the prohibitively expensive San Francisco Bay Area, the Alameda County Community Food Bank in Oakland is spending an extra $60,000 a month on food. Combined with increased demand, it is now shelling out $1 million a month to distribute 4.5 million pounds (2 million kilograms) of food, said Michael Altfest, the Oakland food bank’s director of community engagement. Pre-pandemic, it was spending a quarter of the money for 2.5 million pounds (1.2 million kilograms) of food."

I warned you way ahead of time that this was coming, and what we have experienced so far is just the beginning. The “experts” running the Fed and our politicians in Washington aren’t going to suddenly reverse direction. In fact, Congress just passed another gigantic spending bill that Joe Biden desperately wanted.

Our course has been set and there is no turning back. Our destination is economic collapse, and life in America will never, ever be the same again."

Wednesday, November 10, 2021

“Digital Dollars Flood The World; Wages Destroyed By Inflation; High Prices Crush Middle Class”

Jeremiah Babe, PM 11/10/21:
“Digital Dollars Flood The World; Wages Destroyed By Inflation; 
High Prices Crush Middle Class”

Musical Interlude: 2002, "We Meet Again"

Full screen recommended.
2002, "We Meet Again"

"A Look to the Heavens"

"It’s always nice to get a new view of an old friend. This stunning Hubble Space Telescope image of nearby spiral galaxy M66 is just that. A spiral galaxy with a small central bar, M66 is a member of the Leo Galaxy Triplet, a group of three galaxies about 30 million light years from us. The Leo Triplet is a popular target for relatively small telescopes, in part because M66 and its galactic companions M65 and NGC 3628 all appear separated by about the angular width of a full moon. 
The featured image of M66 was taken by Hubble to help investigate the connection between star formation and molecular gas clouds. Clearly visible are bright blue stars, pink ionized hydrogen clouds - sprinkled all along the outer spiral arms, and dark dust lanes in which more star formation could be hiding."

"Supply Chain Disruptions Will Continue"

"Supply Chain Disruptions Will Continue"
By Jim Rickards

"Forty percent of all the cargo into the United States comes through the ports of Los Angeles and Long Beach. Offshore, there are thousands of containers stacked up on vessels waiting to get in. How many containers can the ports unload on a normal day? New containers are coming in. There are daily arrivals. When will that supply chain backlog clear? The answer is never. If there are more coming in than you can unload and you have an existing backlog that’s getting worse, it will never clear.

But let’s just say that with no new shipments coming in, it would take 30 days just to unload what’s already waiting offshore. Thirty days, by the way, puts you into December and the Christmas rush. And getting it offloaded in California is just the beginning of the supply chain. You’ve got to put it on a train or a truck and get it to a distribution center and put it on another truck and get it to a store.

But wait, there’s also a trucking shortage. That’s a big part of the supply chain problem. If you can unload the merchandise but can’t transport it due to a trucking shortage, what good is it? So this is not getting better. That’s probably the understatement of the year.

You may have heard about a semiconductor shortage. But you don’t need a computer, so what’s the big deal? Well, no, there are semiconductors in everything. You have semiconductors in your refrigerator, dishwasher, home entertainment system, etc. The point is we’re highly dependent on vulnerable supply chains that are currently breaking down. Something radical is going to have to happen. We’re just going to have to stop importing goods. And China may actually oblige us, though not for these reasons…

China now has what’s called a zero-COVID policy. That means they’re not going to tolerate any cases. If they see a case, they’re going to take extreme actions, and they are. But this is a country of 1.4 billion people. It’s the second-largest economy in the world. You’re going to have zero COVID? Sorry, that’s not realistic. You can’t have zero COVID.

The policy is bound to fail. Ample evidence indicates lockdowns don’t work. Masks don’t work. The virus goes where it wants. It’s going to run its course and then fade, no matter what. But if you’ve decided that your policy is zero COVID cases? You’re just going to shut down your economy, or parts of your economy, cities, hubs, transportation networks, factories, more or less randomly. That reduces economic output, obviously, but it also breaks up the supply chain.

What if the particular outbreak shuts down a factory? Sure, that’s bad for the factory. But what if that factory is a critical supplier of intermediate parts to another factory that’s not shut down? Guess what? The other factory is going to be idle because they can’t get the parts.

The shutdown ripples, and that’s the key element. Global trade is a complex, dynamic system. It’s very efficient under normal circumstances. But what we know about complex, dynamic systems is that it takes very little to disturb them. A very small event somewhere in the system can cause the whole system to break down.

We have more than one event occurring, incidentally, and they’re not small. It’s therefore not surprising that the system is breaking down. China has a severe energy shortage right now. Well over 50% of its total electricity generation comes from coal fire plants. It gets most of its coal from Australia. But China started a trade war with Australia because Australia was calling for an independent investigation of the source of the COVID virus, which China didn’t want. The result has been a shortage of coal in China.

So what did China do? It imposed price controls on coal. But we all know that price controls don’t work; it’s basic economics. When you cap the price of coal, you get less of it. The coal shortages are not going away, and China is dealing with the shortages by diverting power to densely populated residential areas and housing. That’s understandable because the Chinese Communist Party doesn't want people freezing in the dark. That’s a good recipe for social unrest.

But if there’s an energy shortage and you’re diverting it to people for political reasons, then who gets deprived? The answer is factories. And so you shut down steel mills, for example, which again causes another disruption in the supply chain. It has a ripple effect.

One of the big industries in China is lithium mining. Well, if you shut down the mining because you don’t have coal to run the electricity, where are you going to get the lithium to make the lithium-ion batteries to get a new Tesla? The answer is you’re not. The waiting list for Teslas is about six months. I’m not going to get into a debate about Teslas, but if you want one, don’t think you’re getting one soon.

When you add it all up, we have a serious problem. I recently spoke to the CEO of a major corporation. He said, “Jim, what you have to understand is that it took us 30 years to build these supply chains. We blew it up in three years, beginning in 2018, and you can’t put it back together. This is Humpty Dumpty. It will take at least 10 years to reconstruct the supply chains if we don’t want to do it with China and globalization.” So don’t think that any of this is going away soon.

Germany’s another example. Due to pressure from environmentalist groups, Germany got rid of all its coal mines and nuclear plants. Guess what? The Germans are going to freeze in the dark this winter because they’re utterly dependent on natural gas, which is a fossil fuel, by the way. They can’t rely on wind and solar because they’re intermittent and can’t meet demand. Vladimir Putin controls the tap on the natural gas pipelines. He’s dialing it down. He’s saying, “You want natural gas? Be prepared to pay me a lot of money, or you’re just not getting it.” That’s going to hurt German industrial production, which is already going down. Again, that results in more supply chain disruption.

Now let’s consider the role of vaccine mandates in supply chain disruptions… The Biden administration is pushing mandates hard. There are also lots of state and city mandates, especially in blue states. The bluer the state, generally speaking, the stricter the mandates.

Now, these experimental mRNA vaccines don’t stop you from acquiring the virus or from spreading it to others, and their effectiveness fades with time, so mandates really have little scientific basis. But put all these considerations aside and focus on their practical effects.

Take a look at the aviation industry. There are thousands, perhaps millions, of components that go into the manufacturing of an aircraft. Those components are specialized and they’re made in different places. Then they’re shipped and assembled. The avionics industry (aviation electronics) is very heavily concentrated in the vicinity of Wichita, Kansas, for historical and other reasons. It’s like the Silicon Valley of avionics.

But the industry has a very low participation rate in the vaccine mandates, meaning about 50%. Nationally, about 80% have received at least one dose. But in this particular industry, maybe because it’s more male-oriented, maybe because it’s more conservative, the rate is much smaller. The reason doesn’t really matter.

But if they’re not vaccinated by now, they probably aren’t going to be. It’s not like they don’t know these things are available for free at the local CVS. Since they won’t obey the mandates, they’re going to quit, get fired, take early retirement, etc. That means a shortage in critical avionics.

What does it mean when the airlines cannot get their avionics updated? It means those planes go out of service, potentially, or they put them in for service and they don’t come out for a long time. We’re talking six months for some of the more sophisticated navigation and communication systems. The backlogs are already building in that industry. How does it help the economy if planes are sitting idle because of components shortages?

And look at the impact of mandates on pilots. Many pilots are hesitant to take the vaccine because studies indicate pilots are more susceptible to developing blood clots than the general population. Well, guess what’s a known side effect of the vaccine? You guessed it, blood clots. Not only can blood clots kill them, they could also end their careers because pilots must undergo rigorous health tests regularly.

Southwest Airlines recently had to cancel thousands of flights. American later canceled thousands of flights. They like to claim it’s the weather. But how come the weather only affects one airline at a time? It wasn’t the weather, it was pilots (and air traffic controllers) conducting informal strikes because of the vaccine mandates. Oh, and mandates extend to large air cargo carriers like FedEx and UPS that haul freight all around the world. More supply chain disruptions if these planes aren’t flying.

Supply chain disruptions are a very big deal. The problem is pervasive. It’s not going away anytime soon because it would require undoing decades of globalization. You’re going to have to get used to it. When I say get used to it, I don’t mean tough luck. I just mean that this problem is going to continue."

"Financial Crisis Looming with Imploding Markets Worldwide"

Full screen recommended.
Dan, iAllegedly, PM 11/10/21:
"Financial Crisis Looming with Imploding Markets Worldwide"
"The Producer Price Index is at its highest level in decades. It does not matter where you live. This is become a worldwide problem. Energy cost, food and simple necessities of going through the roof."

"Picture Yourself..."

“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance.

Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.”
– Strauss & Howe, “The Fourth Turning”

Gregory Mannarino, "Expect A Debt Market 'Nuclear Meltdown' To Occur, And This Is What To Look Out For"

Gregory Mannarino, PM 11/10/21:
"Expect A Debt Market 'Nuclear Meltdown' To Occur, 
And This Is What To Look Out For"

"Socialism With Chimichurri Sauce"

"Socialism With Chimichurri Sauce"
By Bill Bonner

BALTIMORE, MARYLAND – "Inflation is afoot. Breitbart is on the story: “Prices rose 8.6 percent from a year ago in October, the second consecutive month of the fastest annual pace of inflation in records going back 10 years. The Department of Labor said the Producer Price Index accelerated to show a monthly gain of 0.6 percent, up one-tenth of a percentage point from the September gain. That was in line with analyst expectations.”

And the Daily Mail” reports that “meatflation” is getting serious: "…the cost of bone-in ribeye beef has nearly doubled from $8.71 per pound in November 2020 to an astounding $16.99 per pound this week, according to the US Department of Agriculture's Retail Price Report that was released on Friday – an increase of over 95 percent." The Bureau of Labor Statistics will have a price misinformation update later today. Here, we pause to reflect on what inflation actually is… and where higher rates of it are taking us.

Noxious Tax: Democracy is best described as “two wolves and one lamb voting on what to have for dinner.” But after they’ve fully digested the lamb, the wolves are still hungry. What do they do? First, they borrow. And when that source is exhausted (excess borrowing raises interest rates, which depresses the whole economy… and lowers tax receipts)… they print. Inflation is just another way to squeeze blood out of a population of turnips. It is a tax levied on consumers. It’s a particularly noxious tax, in that it distorts and damages the entire economy. And when a country relies too heavily on it, it soon becomes a god-awful mess.

Infectious Socialism: Take our favorite basket case, Argentina, for example. Runaway debt? Out-of-control inflation? Pandering to the masses? Buying votes? Corruption… incompetence… absurdity – the Argentines have been there and done that for the last 70 years.

Now, The Wall Street Journal is on the story: "Argentina’s Welfare State Warning to America." Socialist ideologues know that the welfare state is addictive. New entitlements create dependencies that, once born, demand to be fed and to grow no matter the party in power. Argentina proves the rule.

Yes, “Peronism is Argentina’s most successful export,” jokes a friend in Salta. Juan Perón took a little from Mussolini… a little from Hitler… a little from Stalin. And then, he added a tango beat and chimichurri sauce. The result was a pampa variant of the socialist infection. And it has proved remarkably durable.

Patient Zero: By April 28, 1945, Mussolini was hanging from a lamppost by his feet. Two days later, Hitler was in cinders. Stalin’s Soviet Union limped along until 1991, when President Gorbachev resigned and began doing luggage commercials for Louis Vuitton.

And Peronism? General Juan Perón, who ruled Argentina from 1946 through 1955, and again briefly in 1973-74, was Patient Zero. He came back from Italy in 1941, bringing the dreaded disease with him. It has run rampant through Buenos Aires’ popular neighborhoods ever since.

Survival Tool: What makes Peronism so “sticky” is that once groups acquire a taste for money that isn’t their own, they are very reluctant to give it up. Then, politicians need to keep the money coming or they can’t win an election. And since they can never tax or borrow enough to make good on all their promises (especially since they are simultaneously strangling the productive economy), they resort to the inflation tax… and blame it on greedy businessmen.

Corruption runs wild. In the courts, in the bureaucracy, in the schools, in the medical system… and in private industry, too. Nothing is on the level. Nothing works as you think it should. At first, you attribute it to “incompetence.” But the Argentines are as competent as anyone else. They just react to different incentives. And in a corrupt system, corruption – petty and great – not only pays, it is a survival tool.

Life Goes On: That’s the endearing and enlightening thing about the Argentine system. It has a kind of illicit flexibility that keeps life tolerable… even agreeable… in the midst of perpetual crisis. Coups d’état… military governments… mass murders… widespread terrorism and kidnapping… hyperinflation… humiliating defeats and depression – Peronism has survived them all.

Even today, the inflation rate is around 50%… where it has been for several years. The U.S. dollar trades on “white,” “black,” and “blue” exchanges – at very different rates. Businesses routinely keep at least two different sets of books – one for the government and one for themselves. They trade invoices with each other to manage their tax burdens. And rich people flee to Uruguay or Florida. Still, life goes on… tolerably well, for many people. But a deeper crisis is coming. The Argentine government is broke. No one will lend it money. And if it keeps printing more money, it risks a Venezuela-style catastrophe.

Broken Status Quo: Meanwhile, an important election is coming on Thursday. The Peronists are facing a big challenge. But not necessarily a big change. As The Wall Street Journal puts it, the opposition is “not much more than a milder version of the status quo.” Alas, the status quo – now becoming familiar north of the Rio Grande, as it has been south of the Rio de la Plata for many years – is a shambles. How easy it would be, in theory, to fix it. No more free lunches. No more deficits. No more bribes. No more money-printing. But how impossible it is, in practice, to do it…"

The Daily "Near You?"

Auburndale, Florida, USA. Thanks for stopping by!

The Poet: Mary Oliver, "There Is Time Left"


"There Is Time Left"

 "Well, there is time left 
fields everywhere invite you into them.
And who will care, who will chide you if you wander away
from wherever you are, to look for your soul?
Quickly, then, get up, put on your coat, leave your desk!
To put ones foot into the door of the grass, which is
the mystery, which is death as well as life,
and not be afraid!
To set ones foot in the door of death,
and be overcome with amazement!"

~ Mary Oliver

The 12 Rules of Survival”

The 12 Rules of Survival”
by Laurence Gonzales

“As a journalist, I’ve been writing about accidents for more than thirty years. In the last 15 or so years, I’ve concentrated on accidents in outdoor recreation, in an effort to understand who lives, who dies, and why. To my surprise, I found an eerie uniformity in the way people survive seemingly impossible circumstances. Decades and sometimes centuries apart, separated by culture, geography, race, language, and tradition, the most successful survivors–those who practice what I call “deep survival”– go through the same patterns of thought and behavior, the same transformation and spiritual discovery, in the course of keeping themselves alive.

Not only that but it doesn’t seem to matter whether they are surviving being lost in the wilderness or battling cancer, whether they’re struggling through divorce or facing a business catastrophe– the strategies remain the same. Survival should be thought of as a journey, a vision quest of the sort that Native Americans have had as a rite of passage for thousands of years. Once you’re past the precipitating event– you’re cast away at sea or told you have cancer– you have been enrolled in one of the oldest schools in history. Here are a few things I’ve learned that can help you pass the final exam.

1. Perceive and Believe: Don’t fall into the deadly trap of denial or of immobilizing fear. Admit it: You’re really in trouble and you’re going to have to get yourself out. Many people who in the World Trade Center on September 11, 2001, died simply because they told themselves that everything was going to be all right. Others panicked. Panic doesn’t necessarily mean screaming and running around. Often it means simply doing nothing. Survivors don’t candy-coat the truth, but they also don’t give in to hopelessness in the face of it. Survivors see opportunity, even good, in their situation, however grim. After the ordeal is over, people may be surprised to hear them say it was the best thing that ever happened to them.

Viktor Frankl, who spent three years in Auschwitz and other Nazi concentration camps, describes comforting a woman who was dying. She told him, “I am grateful that fate has hit me so hard. In my former life I was spoiled and did not take spiritual accomplishments seriously.” The phases of the survival journey roughly parallel the five stages of death once described by Elizabeth Kubler Ross in her book On Death and Dying: Denial, anger, bargaining, depression, and acceptance. In dire circumstances, a survivor moves through those stages rapidly to acceptance of his situation, then resolves to do something to save himself. Survival depends on telling yourself, “Okay, I’m here. This is really happening. Now I’m going to do the next right thing to get myself out.” Whether you succeed or not ultimately becomes irrelevant. It is in acting well– even suffering well– that you give meaning to whatever life you have to live.

2. Stay Calm – Use Your Anger: In the initial crisis, survivors are not ruled by fear; instead, they make use of it. Their fear often feels like (and turns into) anger, which motivates them and makes them feel sharper. Aron Ralston, the hiker who had to cut off his hand to free himself from a stone that had trapped him in a slot canyon in Utah, initially panicked and began slamming himself over and over against the boulder that had caught his hand. But very quickly, he stopped himself, did some deep breathing, and began thinking about his options. He eventually spent five days progressing through the stages necessary to convince him of what decisive action he had to take to save his own life.

When Lance Armstrong, six-time winner of the Tour de France, awoke from brain surgery for his cancer, he first felt gratitude. “But then I felt a second wave, of anger… I was alive, and I was mad.” When friends asked him how he was doing, he responded, “I’m doing great… I like it like this. I like the odds stacked against me… I don’t know any other way.” That’s survivor thinking. Survivors also manage pain well. As a bike racer, Armstrong had had long training in enduring pain, even learning to love it. James Stockdale, a fighter pilot who was shot down in Vietnam and spent eight years in the Hanoi Hilton, as his prison camp was known, advised those who would learn to survive: “One should include a course of familiarization with pain. You have to practice hurting. There is no question about it.”

3. Think, Analyze, and Plan: Survivors quickly organize, set up routines, and institute discipline. When Lance Armstrong was diagnosed with cancer, he organized his fight against it the way he would organize his training for a race. He read everything he could about it, put himself on a training schedule, and put together a team from among friends, family, and doctors to support his efforts. Such conscious, organized effort in the face of grave danger requires a split between reason and emotion in which reason gives direction and emotion provides the power source. Survivors often report experiencing reason as an audible “voice.”

Steve Callahan, a sailor and boat designer, was rammed by a whale and sunk while on a solo voyage in 1982. Adrift in the Atlantic for 76 days in a five-and-a-half-foot raft, he experienced his survival voyage as taking place under the command of a “captain,” who gave him his orders and kept him on his water ration, even as his own mutinous (emotional) spirit complained. His captain routinely lectured “the crew.” Thus under strict control, he was able to push away thoughts that his situation was hopeless and take the necessary first steps of the survival journey: to think clearly, analyze his situation, and formulate a plan.

4. Take Correct, Decisive Action: Survivors are willing to take risks to save themselves and others. But they are simultaneously bold and cautious in what they will do. Lauren Elder was the only survivor of a light plane crash in high sierra. Stranded on a peak above 12,000 feet, one arm broken, she could see the San Joaquin Valley in California below, but a vast wilderness and sheer and icy cliffs separated her from it. Wearing a wrap-around skirt and blouse, with two-inch heeled boots and not even wearing underwear, she crawled “on all fours, doing a kind of sideways spiderwalk,” as she put it later, “balancing myself on the ice crust, punching through it with my hands and feet.” She had 36 hours of climbing ahead of her– a seemingly impossible task. But Elder allowed herself to think only as far as the next big rock. Survivors break down large jobs into small, manageable tasks. They set attainable goals and develop short-term plans to reach them. They are meticulous about doing those tasks well. Elder tested each hold before moving forward and stopped frequently to rest. They make very few mistakes. They handle what is within their power to deal with from moment to moment, hour to hour, day to day.

5. Celebrate your success: Survivors take great joy from even their smallest successes. This helps keep motivation high and prevents a lethal plunge into hopelessness. It also provides relief from the unspeakable strain of a life-threatening situation. Elder said that once she had completed her descent of the first pitch, she looked up at the impossibly steep slope and thought, “Look what you’ve done…Exhilarated, I gave a whoop that echoed down the silent pass.” Even with a broken arm, joy was Elder’s constant companion. A good survivor always tells herself: count your blessings– you’re alive. Viktor Frankl wrote of how he felt at times in Auschwitz: “How content we were; happy in spite of everything.”

6. Be a Rescuer, Not a Victim: Survivors are always doing what they do for someone else, even if that someone is thousands of miles away. There are numerous strategies for doing this. When Antoine Saint-Exupery was stranded in the Libyan desert after his mail plane suffered an engine failure, he thought of how his wife would suffer if he gave up and didn’t return. Yossi Ghinsberg, a young Israeli hiker, was lost in the Bolivian jungle for more than two weeks after becoming separated from his friends. He hallucinated a beautiful companion with whom he slept each night as he traveled. Everything he did, he did for her. People cannot survive for themselves alone; their must be a higher motive. Viktor Frankl put it this way: “Don’t aim at success– the more you aim at it and make it a target,the more you are going to miss it.” He suggests taking it as “the unintended side-effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself.”

7. Enjoy the Survival Journey: It may seem counterintuitive, but even in the worst circumstances, survivors find something to enjoy, some way to play and laugh. Survival can be tedious, and waiting itself is an art. Elder found herself laughing out loud when she started to worry that someone might see up her skirt as she climbed. Even as Callahan’s boat was sinking, he stopped to laugh at himself as he clutched a knife in his teeth like a pirate while trying to get into his life raft. And Viktor Frankl ordered some of his companions in Auschwitz who were threatening to give up hope to force themselves to think of one funny thing each day. Survivors also use the intellect to stimulate, calm, and entertain the mind.

While moving across a near-vertical cliff face in Peru, Joe Simpson developed a rhythmic pattern of placing his ax, plunging his other arm into the snow face, and then making a frightening little hop with his good leg. “I meticulously repeated the pattern,” he wrote later. “I began to feel detached from everything around me.” Singing, playing mind games, reciting poetry, counting anything, and doing mathematical problems in your head can make waiting possible and even pleasant, even while heightening perception and quieting fear. Stockdale wrote, “The person who came into this experiment with reams of already memorized poetry was the bearer of great gifts.”

Lost in the Bolivian jungle, Yossi Ghinsberg reported, “When I found myself feeling hopeless, I whispered my mantra, ‘Man of action, man of action.’ I don’t know where I had gotten the phrase… I repeated it over and over: A man of action does whatever he must, isn’t afraid, and doesn’t worry.” Survivors engage their crisis almost as an athlete engages a sport. They cling to talismans. They discover the sense of flow of the expert performer, the “zone” in which emotion and thought balance each other in producing fluid action. A playful approach to a critical situation also leads to invention, and invention may lead to a new technique, strategy, or design that could save you.

8. See the Beauty: Survivors are attuned to the wonder of their world, especially in the face of mortal danger. The appreciation of beauty, the feeling of awe, opens the senses to the environment. (When you see something beautiful, your pupils actually dilate.) Debbie Kiley and four others were adrift in the Atlantic after their boat sank in a hurricane in 1982. They had no supplies, no water, and would die without rescue. Two of the crew members drank sea water and went mad. When one of them jumped overboard and was being eaten by sharks directly under their dinghy, Kiley felt as if she, too, were going mad, and told herself, “Focus on the sky, on the beauty there.”

When Saint-Exupery’s plane went down in the Libyan Desert, he was certain that he was doomed, but he carried on in this spirit: “Here we are, condemned to death, and still the certainty of dying cannot compare with the pleasure I am feeling. The joy I take from this half an orange which I am holding in my hand is one of the greatest joys I have ever known.” At no time did he stop to bemoan his fate, or if he did, it was only to laugh at himself.

9. Believe That You Will Succeed: It is at this point, following what I call “the vision,” that the survivor’s will to live becomes firmly fixed. Fear of dying falls away, and a new strength fills them with the power to go on. “During the final two days of my entrapment,” Ralston recalled, “I felt an increasing reserve of energy, even though I had run out of food and water.” Elder said, “I felt rested and filled with a peculiar energy.” And: “It was as if I had been granted an unlimited supply of energy.”

10. Surrender: Yes you might die. In fact, you will diem– we all do. But perhaps it doesn’t have to be today. Don’t let it worry you. Forget about rescue. Everything you need is inside you already. Dougal Robertson, a sailor who was cast away at sea for thirty-eight days after his boat sank, advised thinking of survival this way: “Rescue will come as a welcome interruption of… the survival voyage.” One survival psychologist calls that “resignation without giving up. It is survival by surrender.” Simpson reported, “I would probably die out there amid those boulders. The thought didn’t alarm me… the horror of dying no longer affected me.” The Tao Te Ching explains how this surrender leads to survival:

“The rhinoceros has no place to jab its horn,
The tiger has no place to fasten its claws,
Weapons have no place to admit their blades.
Now, what is the reason for this?
Because on him there are no mortal spots.”

11. Do Whatever Is Necessary: Elder down-climbed vertical ice and rock faces with no experience and no equipment. In the black of night, Callahan dove into the flooded saloon of his sinking boat, at once risking and saving his life. Aron Ralston cut off his own arm to free himself. A cancer patient allows herself to be nearly killed by chemotherapy in order to live. Survivors have a reason to live and are willing to bet everything on themselves. They have what psychologists call meta-knowledge: They know their abilities and do not over–or underestimate them. They believe that anything is possible and act accordingly.

12. Never Give Up: When Apollo 13′s oxygen tank exploded, apparently dooming the crew, Commander Jim Lovell chose to keep on transmitting whatever data he could back to mission control, even as they burned up on re-entry. Simpson, Elder, Callahan, Kiley, Stockdale, Ginsberg– were all equally determined and knew this final truth: If you’re still alive, there is always one more thing that you can do. Survivors are not easily discouraged by setbacks. They accept that the environment is constantly changing and know that they must adapt. When they fall, they pick themselves up and start the entire process over again, breaking it down into manageable bits. Survivors always have a clear reason for going on. They keep their spirits up by developing an alternate world, created from rich memories, into which they can escape. They see opportunity in adversity.

In the aftermath, survivors learn from and are grateful for the experiences that they’ve had. As Elder told me once, “I wouldn’t trade that experience for anything. And sometimes I even miss it. I miss the clarity of knowing exactly what you have to do next.” Those who would survive the hazards of our world, whether at play or in business or at war, through illness or financial calamity, will do so through a journey of transformation. But that transcendent state doesn’t miraculously appear when it is needed. It wells up from a lifetime of experiences, attitudes, and practices form one’s personality, a core from which the necessary strength is drawn. A survival experpierience is an incomparable gift: It will tell you who you really are.”
Laurence Gonzales is the author of “Deep Survival: Who Lives, Who Dies, and Why” (W.W. Norton & Co., New York) and contributing editor for “National Geographic Adventure” magazine. The winner of numerous awards, he has written for Harper’s, Atlantic Monthly, Conde Nast Traveler, Rolling Stone, among others. He has published a dozen books, including two award-winning collections of essays, three novels, and the book-length essay, “One Zero Charlie” published by Simon & Schuster. For more, go to www.deepsurvival.com

"The 5 Stages of Economic Collapse”

"The 5 Stages of Economic Collapse”
by Dmitry Orlov

“Elizabeth Kübler-Ross defined the five stages of coming to terms with grief and tragedy as denial, anger, bargaining, depression, and acceptance, and applied it quite successfully to various forms of catastrophic personal loss, such as death of a loved one, sudden end to one’s career, and so forth. Several thinkers, notably James Howard Kunstler and, more recently John Michael Greer, have pointed out that the Kübler-Ross model is also quite terrifyingly accurate in reflecting the process by which society as a whole (or at least the informed and thinking parts of it) is reconciling itself to the inevitability of a discontinuous future, with our institutions and life support systems undermined by a combination of resource depletion, catastrophic climate change, and political impotence.

But so far, little has been said specifically about the finer structure of these discontinuities. Instead, there is to be found continuum of subjective judgments, ranging from “a severe and prolonged recession” (the prediction we most often read in the financial press), to Kunstler’s evocative but unscientific-sounding “clusterf**k,” to the ever-popular “Collapse of Western Civilization,” painted with an ever-wider brush-stroke.

For those of us who have already gone through all of the emotional stages of reconciling ourselves to the prospect of social and economic upheaval, it might be helpful to have a more precise terminology that goes beyond such emotionally charged phrases. Defining a taxonomy of collapses might prove to be more than just an intellectual exercise: based on our abilities and circumstances, some of us may be able to specifically plan for a certain stage of collapse as a temporary, or even permanent, stopping point.

Even if society at the current stage of socioeconomic complexity will no longer be possible, and even if, as Tainter points in his “Collapse of Complex Societies,” there are circumstances in which collapse happens to be the correct adaptive response, it need not automatically cause a population crash, with the survivors disbanding into solitary, feral humans dispersed in the wilderness and subsisting miserably. Collapse can be conceived of as an orderly, organized retreat rather than a rout.

For instance, the collapse of the Soviet Union – our most recent and my personal favorite example of an imperial collapse – did not reach the point of political disintegration of the republics that made it up, although some of them (Georgia, Moldova) did lose some territory to separatist movements. And although most of the economy shut down for a time, many institutions, including the military, public utilities, and public transportation, continued to function throughout. And although there was much social dislocation and suffering, society as a whole did not collapse, because most of the population did not lose access to food, housing, medicine, or any of the other survival necessities. The command-and-control structure of the Soviet economy largely decoupled the necessities of daily life from any element of market psychology, associating them instead with physical flows of energy and physical access to resources. Thus situation, as I argue in my book, "Reinventing Collapse", allowed the Soviet population to inadvertently achieve a greater level of collapse-preparedness than is currently possible in the United States.

Having given a lot of thought to both the differences and the similarities between the two superpowers – the one that has collapsed already, and the one that is collapsing as I write this – I feel ready to attempt a bold conjecture, and define five stages of collapse, to serve as mental milestones as we gauge our own collapse-preparedness and see what can be done to improve it.

Rather than tying each phase to a particular emotion, as in the Kübler-Ross model, the proposed taxonomy ties each of the five collapse stages to the breaching of a specific level of trust, or faith, in the status quo. Although each stage causes physical, observable changes in the environment, these can be gradual, while the mental flip is generally quite swift. It is something of a cultural universal that nobody (but a real fool) wants to be the last fool to believe in a lie.

Stages of Collapse:

Stage 1: Financial collapse. Faith in “business as usual” is lost. The future is no longer assumed resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.

Stage 2: Commercial collapse. Faith that “the market shall provide” is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down, and widespread shortages of survival necessities become the norm.

Stage 3: Political collapse. Faith that “the government will take care of you” is lost. As official attempts to mitigate widespread loss of access to commercial sources of survival necessities fail to make a difference, the political establishment loses legitimacy and relevance.

Stage 4: Social collapse. Faith that “your people will take care of you” is lost. As local social institutions, be they charities, community leaders, or other groups that rush in to fill the power vacuum, run out of resources or fail through internal conflict.

Stage 5: Cultural collapse. Faith in the goodness of humanity is lost. People lose their capacity for “kindness, generosity, consideration, affection, honesty, hospitality, compassion, charity” (Turnbull, "The Mountain People"). Families disband and compete as individuals for scarce resources. The new motto becomes “May you die today so that I die tomorrow” (Solzhenitsyn, "The Gulag Archipelago"). There may even be some cannibalism.

Although many people imagine collapse to be a sort of elevator that goes to the sub-basement (our Stage 5) no matter which button you push, no such automatic mechanism can be discerned. Rather, driving us all to Stage 5 will require that a concerted effort be made at each of the intervening stages. That all the players seem poised to make just such an effort may give this collapse the form a classical tragedy – a conscious but inexorable march to perdition – rather than a farce (“Oops! Ah, here we are, Stage 5.” – “So, whom do we eat first?” – “Me! I am delicious!”) Let us sketch out this process.

Financial collapse, as we are are currently observing it, consists of two parts. One is that a part of the general population is forced to move, no longer able to afford the house they bought based on inflated assessments, forged income numbers, and foolish expectations of endless asset inflation. Since, technically, they should never have been allowed to buy these houses, and were only able to do so because of financial and political malfeasance, this is actually a healthy development. The second part consists of men in expensive suits tossing bundles of suddenly worthless paper up in the air, ripping out their remaining hair, and (some of us might uncharitably hope) setting themselves on fire on the steps of the Federal Reserve. They, to express it in their own vernacular, “f**ked up,” and so this is also just as it should be.

The government response to this could be to offer some helpful homilies about “the wages of sin” and to open a few soup kitchens and flop houses in a variety of locations including Wall Street. The message would be: “You former debt addicts and gamblers, as you say, ‘f****d up,’ and so this will really hurt for a long time. We will never let you anywhere near big money again. Get yourselves over to the soup kitchen, and bring your own bowl, because we don’t do dishes.” This would result in a stable Stage 1 collapse – the Second Great Depression.

However, this is unlikely, because in the US the government happens to be debt addict and gambler number one. As individuals, we may have been as virtuous as we wished, but the government will have still run up exorbitant debts on our behalf. Every level of government, from local municipalities and authorities, which need the financial markets to finance their public works and public services, to the federal government, which relies on foreign investment to finance its endless wars, is addicted to public debt. They know they cannot stop borrowing, and so they will do anything they can to keep the game going for as long as possible.

About the only thing the government currently seems it fit to do is extend further credit to those in trouble, by setting interest rates at far below inflation, by accepting worthless bits of paper as collateral and by pumping money into insolvent financial institutions. This has the effect of diluting the dollar, further undermining its value, and will, in due course, lead to hyperinflation, which is bad enough in any economy, but is especially serious for one dominated by imports. As imports dry up and the associated parts of the economy shut down, we pass Stage 2: Commercial Collapse.

As businesses shut down, storefronts are boarded up and the population is left largely penniless and dependent on FEMA and charity for survival, the government may consider what to do next. It could, for example, repatriate all foreign troops and set them to work on public works projects designed to directly help the population. It could promote local economic self-sufficiency, by establishing community-supported agriculture programs, erecting renewable energy systems, and organizing and training local self-defense forces to maintain law and order. The Army Corps of Engineers could be ordered to bulldoze buildings erected on former farmland around city centers, return the land to cultivation, and to construct high-density solar-heated housing in urban centers to resettle those who are displaced. In the interim, it could reduce homelessness by imposing a steep tax on vacant residential properties and funneling the proceeds into rent subsidies for the indigent. With plenty of luck, such measures may be able to reverse the trend, eventually providing for a restoration of pre-Stage 2 conditions.

This may or may not be a good plan, but in any case it is rather unrealistic, because the United States, being so deeply in debt, will be forced to accede to the wishes of its foreign creditors, who own a lot of national assets (land, buildings, and businesses) and who would rather see a dependent American population slaving away working off their debt than a self-sufficient one, conveniently forgetting that they have mortgaged their children’s futures to pay for military fiascos, big houses, big cars, and flat-screen television sets. Thus, a much more likely scenario is that the federal government (knowing who butters their bread) will remain subservient to foreign financial interests. It will impose austerity conditions, maintain law and order through draconian means, and aid in the construction of foreign-owned factory towns and plantations. As people start to think that having a government may not be such a good idea, conditions become ripe for Stage 3.

If Stage 1 collapse can be observed by watching television, observing Stage 2 might require a hike or a bicycle ride to the nearest population center, while Stage 3 collapse is more than likely to be visible directly through one’s own living-room window, which may or may not still have glass in it. After a significant amount of bloodletting, much of the country becomes a no-go zone for the remaining authorities. Foreign creditors decide that their debts might not be repaid after all, cut their losses and depart in haste. The rest of the world decides to act as if there is no such place as The United States – because “nobody goes there any more.” So as not to lose out on the entertainment value, the foreign press still prints sporadic fables about Americans who eat their young, much as they did about Russia following the Soviet collapse. A few brave American expatriates who still come back to visit bring back amazing stories of a different kind, but everyone considers them eccentric and perhaps a little bit crazy.

Stage 3 collapse can sometimes be avoided by the timely introduction of international peacekeepers and through the efforts of international humanitarian NGOs. In the aftermath of a Stage 2 collapse, domestic authorities are highly unlikely to have either the resources or the legitimacy, or even the will, to arrest the collapse the dynamic and reconstitute themselves in a way that the population would accept.

As stage 3 collapse runs its course, the power vacuum left by the now defunct federal, state and local government is filled by a variety of new power structures. Remnants of former law enforcement and military, urban gangs, ethnic mafias, religious cults and wealthy property owners all attempt to build their little empires on the ruins of the big one, fighting each other over territory and access to resources. This is the age of Big Men: charismatic leaders, rabble-rousers, ruthless Macchiavelian princes and war lords. In the luckier places, they find it to their common advantage to pool their resources and amalgamate into some sort of legitimate local government, while in the rest their jostling for power leads to a spiral of conflict and open war.

Stage 4 collapse occurs when society becomes so disordered and impoverished that it can no longer support the Big Men, who become smaller and smaller, and eventually fade from view. Society fragments into extended families and small tribes of a dozen or so families, who find it advantageous to band together for mutual support and defense. This is the form of society that has existed over some 98.5% of humanity’s existence as a biological species, and can be said to be the bedrock of human existence. Humans can exist at this level of organization for thousands, perhaps millions of years. Most mammalian species go extinct after just a few million years, but, for all we know, Homo Sapiens still have a million or two left.

If pre-collapse society is too atomized, alienated and individualistic to form cohesive extended families and tribes, or if its physical environment becomes so disordered and impoverished that hunger and starvation become widespread, then Stage 5 collapse becomes likely. At this stage, a simpler biological imperative takes over, to preserve the life of the breeding couples. Families disband, the old are abandoned to their own devices, and children are only cared for up to age 3. All social unity is destroyed, and even the couples may disband for a time, preferring to forage on their own and refusing to share food. This is the state of society described by the anthropologist Colin Turnbull in his book “The Mountain People.” If society prior to Stage 5 collapse can be said to be the historical norm for humans, Stage 5 collapse brings humanity to the verge of physical extinction.

As we can easily imagine, the default is cascaded failure: each stage of collapse can easily lead to the next, perhaps even overlapping it. In Russia, the process was arrested just past Stage 3: there was considerable trouble with ethnic mafias and even some warlordism, but government authority won out in the end. In my other writings, I go into a lot of detail in describing the exact conditions that inadvertently made Russian society relatively collapse-proof. Here, I will simply say that these ingredients are not currently present in the United States.

While attempting to arrest collapse at Stage 1 and Stage 2 would probably be a dangerous waste of energy, it is probably worth everyone’s while to dig in their heels at Stage 3, definitely at Stage 4, and it is quite simply a matter of physical survival to avoid Stage 5. In certain localities – those with high population densities, as well as those that contain dangerous nuclear and industrial installations – avoiding Stage 3 collapse is rather important, to the point of inviting foreign troops and governments in to maintain order and avoid disasters. Other localities may be able to prosper indefinitely at Stage 3, and even the most impoverished environments may be able to supportThe Balance "US Economy Collapse: What Would Happen?"a sparse population subsisting indefinitely at Stage 4.

Although it is possible to prepare directly for surviving Stage 5, this seems like an altogether demoralizing thing to attempt. Preparing to survive Stages 3 and 4 may seem somewhat more reasonable, while explicitly aiming for Stage 3 may be reasonable if you plan to become one of the Big Men. Be that as it may, I must leave such preparations as an exercise for the reader. My hope is that these definitions of specific stages of collapse will enable a more specific and fruitful discussion than the one currently dominated by such vague and ultimately nonsensical terms as “the collapse of Western civilization.”
Related:
Freely download “Collapse of Complex Societies”, by Joseph Tainter:

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