Thursday, June 26, 2008

Anecdotes and Worry Points

Posting has been spotty recently for a number of reasons - work, travel and family mostly. But there's more to it. I think we are getting close to a tipping point in social mood, from cautious (or Xanax-induced) optimism based on hope and the fact that the U.S. has been in a bull market since roughly 1982, with even the significant market drop after 9/11 barely denting the overall optimism to a new phase of anger, disbelief and rage. Frankly, I've not been sure how I want to write about it.

The actual mechanics of what's about to hit can be found in popular alternative economics sites like Mish's Global Economic Analysis, Elliott Wave International, Urbansurvival, Of Two Minds and plenty of others. The rot that has eaten away at the credit structure holding up the spending patterns, work and expectations of most U.S. citizens. Banks are watching their asset base vaporize. Their asset base is the magic elixir that keeps the alchemy of fractional reserve banking functioning. Destroy the asset base and banks must reduce lending. Reduce lending and the party is over for the current structure of the economy.

So others are already covering that beat. Writers like John Robb are charting what they see as the coming rise of Resilient Communities and how small groups will use modern technology to carve out niches that either don't need, or feed upon, a state structure (meaning here a big central government). Lot's of good theory and anecdote floating around and done by experts better at it than me.

Our niche here at FutureJacked will begin to focus more and more, at least in the short term, on scenario planning. We'll start a series next week that will game out what you would need to be doing between now and a fictional Crash/Crisis come this October. That's far enough out for some good work and October is a good month to postulate for market crashes (1929, 1987). Again this is not investment advice, just a thought experiment.

What Gives?

I am thinking that this long plateau in reasonably positive social mood that has held over the last several years in the face of a lot of negative economic and social "fundamentals" is finally about to give. Folks are realizing just how dire their economic situation is. When that realization goes from the "shocked and hoping it will all go away" phase to the "shocked and angry and want to make someone pay phase" then we could very well be on the cusp of a New American Revolution.

Yes, I think the underlying rot is that bad. I am not calling for violent change of anything, but it is my observation that we have unsustainable patterns of spending and growth in social programs and in the military. As necessary and good as those programs may be, when the money runs out, then that is all she wrote and the millions of people who's lives, livelihoods and mental software is geared to working through such systems. Then you have the stresses upon the system from high energy costs and the growing concern over Peak Oil that is trickling into the mainstream consciousness.

Peak Oil, it's geological ramifications aside, is going to make for a great bogeyman in the coming years. I believe, as we discussed in Catastrophic Abundance, that Peak Oil will be far more devastating as an emotional hook than the very real and very painful economic adjustments it will foster. Peak Oil will serve as the operating system for whole new generation of mental software that groups will be seeking to upload into brains all across the world. I believe it will inform a culture of limitations, of scarcity, of anger and exclusion, of draconinan laws for population control and dispensing of medical care.

Other things that have me convinced that we are near a tipping point are random conversations I've had in my travels recently. I learned long ago to keep my more "non-mainstream" conclusions about the fate of consumer-materialist society to myself. In places as diverse as Philadelphia, Pennsylvania and Exeter, U.K. I got into conversations with people who are convinced that we are facing an apocalyptic end to current society - and they brought up the topic, not me. Now, granted, such anecdotes are the worst sort data cherry-picking, worthy of Amory Lovins fulminating against nuclear power, but these were not hippy-dippy radicals or drop-outs. These were informed young people - the kind that even ten years ago would be talking about growth, the excitement of globalisation and all the possibilities of a world full of cheap and abundant energy.

I know it is not rational or scientific, but I really think that the positive mood that holds the whole Wall Street ponzi scheme together, as well as provides docile citizens who happily consume government services and corporate products, is about to evaporate and that it will evaporate far more quickly than most would believe.

We'll kick off that discussion in the coming days. Until then, review your situation, maybe unplug from too much focus on "international events" and get connected to your community or neighborhood. Have a stock of emergency supplies, as recommended by the feds. Have some cash on hand.

Be thinking of how to make a positive impact should a significant downturn in the economy swamp our country. We are going to have to rebuild things one locale at a time - and small numbers can make a huge difference in times of sweeping change.


The newest Progress in Socionomics is out. Take a few minutes when you get the chance and read over it. I think it will provide you with useful tools in analyzing the big mood shift I expect is upon us. I especially recommend the interview with Maj. Tyson and following it up by reading the paper.

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