Well, 2012 is here. That creaking noise you hear is the sound of the superstructure of Western finance, politics and popular society weakening. The world we here in the U.S. have constructed for ourselves, based on fractional reserve lending, fiat money, crony capitalism, enormous public and private indebtedness, world-wide military commitments, privatization of prisons and security functions, all slaved to a hyperactive and paranoid security state, is crumbling. When the mood that supports this worldview turns against it, either a spectacular crash is going to follow, or a long, grinding year of disappointment, anger and increasing tension.
In this edition of Socionomic Trendspotting, we will step back and try to see where the debris is going to fall, in an attempt to use a “macro” gauge like socionomics to help you plan on the “micro” level. I’ll try and adhere to Alan Hall’s Principles for Applying Socionomics and hopefully we can tease something useful from the trends.
Now, on to 2012…
The Maya Calendar Countdown
I’ve had a Maya Calendar Countdown at the bottom of the blog for several years now. At one time I thought this meme might grow into something influential enough to affect more than book and movie sales. I was viewing this as a vehicle that could possibly be used as an outlet for anger or even violence and maybe even serve as a large cult meme. Unless something significant changes, the “End of the World” in December, 2012, will probably pass with little to no related violence or organized trauma.
However, this topic can serve as a placeholder for something that could grow in 2012 and that is a variety of cults and gangs as more and more people become angry at “the system” and actually begin doing something about it.
Action Items: Like a lot of “alternative” movements, you can expect a lot of failures, a lot of bad press, some crazies and the occasional odd success as the “resilient community” meme and other movements struggle to rise up as our larger society begins to fail more and more people. Be aware of the alternative movements and find what is useful in them, but avoid the “true believer” trap.
Eat the Rich?
Will this be the year the worm turns for the “Masters of the Universe” who have, shall we say, not quite lived up to their fabled intelligence nor their fiduciary responsibilities in many cases over the past decade? Maybe not, but if mood does turn, I expect this to be one of the outlets people will use to express their anger.
I’ve set out the warning about show trials or scapegoating (in some cases, warranted) of the financier class in the past, only to be proven stunningly wrong by both mass mood and an Eric Holder. An Eric Holder is an inert form of matter currently occupying a chair in the Attorney General’s Office, an office that has spent more time worrying about Barry Bonds, Cam Newton’s dad and Roger Clemens than it has in pursuing the root of the rampant mortgage market frauds perpetrated during the Bubble, as well as the various frauds inflicted on the public by the big banks that get minor civil penalties but no criminal time.
The blatant travesty that was the MF Global Collapse continues to unwind and yet John Corzine is still free. Perhaps I am still too early, but I’ll say it again, the financier class has too much money and is too sociopathically arrogant in the main to avoid being scapegoated if mood turns sour.
Another reinforcement that this trend may be early can be found in The Wave Principle of Human Social Behavior by Robert Prechter, “Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people…. …Such undertakings, particularly when sponsored by the state as most of them are, require immense cooperation. It might be postulated that major “C” wave declines are times when destructive social goals are achieved with wide cooperation, just as third waves on the upside are times when constructive social goals are achieved with wide cooperation.” (WP, page 270) Assuming we are in Cycle wave C, this iteration of negative mood hopefully won’t be enough to drive mass killings, but it might be enough to drive mass jailings.
Action Items: What actions can be taken if this trend does actually play out? The warning signs will be there and that makes me think this could take a few years to get traction – it will probably take a third party or a demagogue of some sort in one of the main parties to gain control or influence over enough of the levers of power to begin pursuit of some of the financier class that will get some of the blame for the economic malaise. If you are wealthy enough to worry about this, you probably have already taken precautions. If you are in some sort of support service for the financier class, it wouldn’t be the worst thing in the world to begin compiling a database of documents and emails so that you have something to trade when the wolves come calling.
War (Good God, Ya’ll)
This topic is on my mind more and more. Going with the count from the Elliott Wave Financial Forecast, we are in Cycle Wave C. Referring back to The Wave Principle, we find that “The most intense conflicts, such as wars, are not associated with all large bear markets but typically occur during or immediately after the largest C waves in corrective processes of Primary degree and higher. A waves, regardless of extent rarely result in war.” (WP, page 267) This tells me to expect war. One can hope we can avoid it this year, but it is coming. Alternativley, I could be reading this section of the Wave Principle wrong and we should expect the big war some time towards the end of, or just after, Supercycle Wave C (or maybe we would get both).
If we look to the various “hotspots” where public mood is being pushed to accept war, the first name that comes up is Iran. With the consequences of the “Arab Spring” still bubbling along, one wonders if other Middle Eastern/North African countries might be added to that list as well. Other outlets for this expression of negative mood include China (though I regard this as low probability) or even intervention in the Western hemisphere (if, for example, Mexico were to implode and the U.S. were “provoked” to intervene against one or more of the cartels, in a replay of the “Pancho Villa Expedition” of 1916) or internally.
Action Items: I’m not sure if now is the time to plan for global thermonuclear war (you may need to wait until Supercycle Wave C a few decades hence) but I think you should at least think about war and the disruptions it could cause. Maybe we can avoid conflict for a few more years. Don’t get bogged down in partisan “news” about various regions, but do think seriously about the consequences of, say, a war with Iran that closed the Straits of Hormuz for some weeks or months and resulted in damage to oil refineries all around the Gulf, or other consequences in terms of rationing or further restrictions on liberties.
The Clashing Grind of Politics
I think it will be more of the same this year. I don’t see enough signs of the groundwork being laid for a successful third party structure and there should be enough mental inertia that allow the majority of voters to continue supporting the two-party system through the election cycle. Assuming a downturn in mood, President Obama should be ousted, despite his recent recovery in the polls. With his recent “recess appointment” of Richard Cordray to the laughable CPFB causing a lot of controversy, he may be giving his opponents a legal stick with which to attack him just as we are on the cusp of a downswing in mood.
Expect more of the same in terms of the product you get from your lawmakers, especially the federal ones, as well. The recent gutting of the Bill of Rights with the signing of the recent NDAA (on the 220th Anniversary of their signing no less), on top of the PATRIOT Act and other attacks on the foundations of the Republic, sends a clear signal that more, not less, authoritarianism is coming our way.
Action Items: It may still be too early for you to do much in politics, but if that is your thing, getting involved now may allow you to get some experience under your belt which will allow you to take advantage of the bottom that we could see in the 2016ish time frame. As for the rest, who knows just how ugly the authoritarianism is going to get. It could be bad. Be aware of your surroundings.
Thoughts on the Coming Year
It is entirely possible that 2012 may be 2011 all over again, just worse. Mood could slip less than I expect, bringing markets only slightly lower, not crashing down. Instead of an outright leap into the abyss, we could continue this agonizing slog towards it instead. Jobs would continue to be lost. Tensions would be high and rising. Dysfunction would reign in most every court of public life – and we’d just have to deal with it.
Alternatively, we could see a big Primary Wave 3 plunge that shocks the system and maybe gets us closer to the bottom more quickly – but possibly with a higher risk of things like war or mass violence.
I actually am tending towards the “more of the same” scenario, which can still accommodate big market plunges – there may be enough inertia left over from the dying system to carry this zombie economy on longer than you might think – especially if Europe tanks first and the U.S. gets a temporary benefit of hot money looking for a home.
My suggestions are ones you’ve heard before but bear repeating – be aware of your surroundings, keep a positive frame of mind, do your best to rationalize your finances, be prepared for disruptions of the basics of daily life (fuel, food, electricity, internet access, etc.) but don’t settle into a bunker mentality. Life is to be lived and in times of chaos, the seeds of a new dawn are sown. Be out there sowing those seeds while others are cowering in fear. We have a rough three or four years ahead of us – be ready.