A Prepper Garden

Here comes another prediction, from the blog Ecomomic Collapse, that it will. It’s based on evidence that the government and major banks are making preparations they aren’t telling us about.

Among other ominous signs, blogger Michael Snyder points to:

1. A secretive directive from regulators that big investment banks, like Bank of America and Goldman Sachs, set up contingency plans to dismantle themselves if their Ponzi pyramid bubble bursts and they have to declare bankruptcy. (These are already technically insolvent since their debt level vastly exceeds their assets.)

2. The US government is stockpiling food and ammunition, and Obama is signing a raft of executive orders to be implemented in response to a societal meltdown.

3. The European debt crisis continues to worsen as EU economies continue to contract. There is even talk of Germany leaving the Euro.

4. Over the past 12 months, hundreds of banking executives have been resigning and selling off enormous quantities of stock. Many have been shopping for “prepper* properties” in rural communities.

5. Economists and European leaders are predicting the next banking crisis will be worse that the one in 2008 – mainly because governments are too indebted to deliver more bailouts – and other policy fixes (such as dropping interest rates and quantitative easing) have already been enacted. One former World Bank economist believes the coming banking crisis will be so severe that civilization won’t survive it.

6. The problems facing human society aren’t merely economic. Energy, water and food distribution (especially with the severe drought in the US and Russia) are also in totally disarray.

It’s clear from Snyder’s blog that he’s been predicting economic collapse for awhile – he uses the site to hawk gold, silver, emergency food rations, seeds and guns (to keep your neighbors from stealing veggies out of your garden). However I find it highly significant that he’s citing mainstream sources, such as Reuters, a former World Bank economist, a Fortune 300 executive and a member of the European Parliament.

Read more here.

*A prepper, a term derived from preparedness, is someone who becomes self-sufficient in providing for food and other basic needs.

Economics of Happiness

The Economics of Happiness (2011)

Film Review

The term “economical relocalization,” which has been around about four years, describes the global movement of loosely knit Transition Towns and other grassroots networks working to strengthen local and regional economies and systems of food and energy production. I myself was unacquainted with the term until I came across it in the promotional materials for the Economics of Happiness. Most of the last six years of my life have been focused on grassroots relocalization activities. For four years, I helped run a local mutual credit system (an alternative monetary system allowing people on a fixed income to purchase goods and services from each other). During the same period, I have been a strong and vocal supporter of New Plymouth’s farmers’ market, as well helping to start a local community garden. Along with a group of local energy engineers and other members of Grey Power, I also (successfully) lobbied New Plymouth District Council to promote and support locally produced “distributed” energy (for example local wind farms and grid-connect solar electricity) systems.

What I like best about Economics of Happiness is learning I am part of a global movement to strengthen local communities economically and politically. What I dislike most is the title, which suggests the film relates in some way to New Age spirituality. I have found books and films that smack of New Age touchy-feeliness are often a turn-off for blue collar activists.

The 2011 film, narrated by Helena Norberg Hodge, is based on her 1991 book Ancient Futures: Learning from Ladakh and her 1993 film by the same name. The book and both films draw their inspiration from the nearly forty years Norberg-Hodge has spent living and working in Ladakh, a small Himalayan region in the India-controlled (and disputed) state of Jammu and Kashmir. The beginning of Economics of Happiness includes footage from the 1993 film. It also includes substantial documentary footage on the global economic crisis and the impending global ecological crisis, a consequence of runaway climate change and mass species extinction.

In addition to examining extreme weather events, mass unemployment, extreme income inequality and skyrocketing energy and food costs, the Economics of Happiness also focuses on “the crisis of the human spirit.” It doesn’t do so from a religious or New Age perspective. Instead it looks at the epidemic level of loneliness, alienation and demoralization that seems to accompany wholesale industrial globalization.

The Psychological Devastation of Globalization

The film opens with the same narrative Norberg-Hodge recounts in her earlier Ancient Futures film. We are shown the “before” image of Ladakh, a rich thriving culture in which residents live in large spacious homes, enjoy respectable amounts of leisure time and have no concept of unemployment. Then we have the “after” image where, thanks to globalization, cheap (government subsidized) food, fuel and consumer goods that have flooded the region and destroyed most residents’ traditional livelihoods. Previously pristine communities face rising levels of air and water pollution, while Ladakhi teenagers are continuously bombarded with consumerist messages.

It’s heartbreaking to see the psychological effect of all this. Most young Ladakhi have come to regard themselves as backwards and poor, while the communities they live in face rising racial tensions, juvenile delinquency and epidemic levels of psychological depression.

The Destructive Nature of Urbanization

The film goes on to sketch the mechanics of globalization, stressing the deregulation that forces small self-contained regions like Ladakh to open their markets to foreign goods, which quickly supplant higher priced local products. Norberg-Hodge paints an even uglier picture of urbanization, an inevitable result of forcing millions of small formers off their land. In discussing the growing global scarcity of fossil fuels, water and food, she stresses that life in a large city is vastly more resource intensive than rural living. All city residents rely on food, energy and water transported from some distant source, while they burn up additional fossil fuels transferring their waste products as far away as possible. She stresses that most city residents tend to go along with the massive ecological and social devastation their lifestyle produces because they don’t see it. The damage often occurs on the other side of the world.

Rebuilding Local Communities and Economies

The solutions Norberg-Hodge offers for all these problems are similar to those proposed by an increasing number of “latter day” economists. First and foremost we must acknowledge that humankind has exceeded the earth’s carrying capacity – that the corporate drive for continual economic growth must end. Secondly people of conscience need to opt out of corporate economy to facilitate the creation of more efficient and environmentally accountable regional and local economies. In addition to transitioning to local energy and food production, people need to exert collective pressure to break up large investment banks and replace them with local retail banks and credit unions. State and local governments need to stop giving subsidies and tax breaks to large corporations and start supporting their own local businesses. Not only do small businesses create the vast majority of jobs, but they don’t pack up after a few years to move to overseas.

Norberg-Hodge also sees this process of rebuilding local communities as the only way to address the “crisis of the human spirit.” She believes the latter is a direct result of the demise of community engagement that has accompanied globalization and urbanization.  Although the process is most striking in remote regions like Ladakh, where it occurred suddenly, no region of the developed or developing world has escaped it.

The film ends on an extremely optimistic note, with numerous examples of international and community organizations supporting people in reclaiming their lives from multinational corporations.

This is the first of a series of posts discussing the likelihood that capitalism is on the verge of collapse and what a post-capitalistic world might look like.

Fatal Debt Contagion

As the global recession and debt crisis worsens, even mainstream analysts are starting to speculate that global capitalism is on the verge of collapse. At the moment, most attention is focused on European “debt contagion.” European Union economists are terrified that the Greek government will default on their debt. A Greek default makes it inevitable that Spain and Italy will also default. The mechanism here relates to the totally unregulated, speculative way in which “sovereign debt” (the money countries borrow from private banks to finance government operations) is financed.

Investment banks in France, Germany, London and New York have already jacked up the interest rates they charge Italy and Spain – high risk investments always command higher interest rates. Higher debt repayments will make Italian and Spanish default inevitable, which will increase interest rates on Japanese, British and US debt – as all three countries have very high debt levels. Owing to the size of their economies, default in Japan or the US is very likely to crash the global economy.

The Endgame

There are three schools of thought as to how the capitalist endgame is likely to play out. The first predicts a scenario in which the Asian tiger economies (China and India) collapse when the US, Japan and UK do – given that national economies are hopelessly intertwined as a result of globalization. This school also predicts that any serious global instability will pop the Chinese real estate (debt) bubble. When this happens, the Chinese economy will crash, like the US economy did when the subprime derivatives bubble burst in 2008. The creation of debt bubbles (the bubbles leading to the 1987 market crash and 2001 dot com collapse are examples), involves the creation of vast amounts of credit (i.e. wealth that only exists on paper), which are all wiped out simultaneously when the bubble bursts. This sudden loss of economic wealth inevitably bankrupts large numbers of businesses and causes massive job loss.

The second school believes that only the US, Europe and Japan will collapse, while the economies of China, India and its Asian and non-Asian trading partners (for example, Australia and New Zealand) will continue to prosper. In this scenario the coming debt crisis and crash will merely accelerate the gradual role reversal of the past two decades – with China rising to the status of economic superpower and the US, Europe and Japan becoming third world nations. Based on the current strength of the New Zealand dollar – rising over the past nine years from $US 0.50 to $US 0.82 – it strikes me that most global currency traders subscribe to this second school of thought.

The third school supports the scenario I believe Wall Street and the Pentagon have in mind, in which the US and its NATO allies confront China militarily to prevent it from replacing the US as the world superpower. Evidence that the Pentagon has already chosen this tack is seen in the strategic alliances it has formed around Middle East and North African oil resources. Many foreign analysts believe that the US wars in the Middle East and Libya are really proxy wars with China over oil resources. They worry that these proxy wars have the potential to degenerate into a full scale war between the US and China – which would surely destroy both economies.

China’s regional allies in this global struggle are Pakistan, Iran, Saudi Arabia, Angola, Russia, Palestine and (indirectly through Pakistan) a Taliban-controlled Afghanistan. US allies are NATO, India, Israel and Iraq (thanks to the permanent American military installations in Iraq).

To be continued, with a discussion of how these regional alliances play out in current proxy wars.