Thu Aug 4th, 2011 at 07:14:52 AM EST
A comment I decided to turn into a diary.
Spent some time looking at the probable course of events over the next ten years. Keep coming back to the same barrier: cannot predict how the politicians are going to respond. So far they've been doing all the wrong things, for all the wrong reasons; throwing their lot in with the banksters¹ against their citizens or subjects. If that continues, and there's no evidence they won't, things are going to get grim. How grim depends on how long and strong the politicians support the banksters.
Isn't that a nice little feedback loop?
front-paged by afew
Anyway, we're in a global recession and with the recent debt ceiling debacle in the US another 2 or 3 percent has been whacked off global GNP. Mathematically this means an input into the positive feedback loop in the negative direction has been given a sharp boost. When that happens the chances of causing an iterated functional system cascade failure sharply increases. The mathematical question is: which type of cascade failure is likely to result? Exponential? Power Law? Chaotic? Topos contraction? I don't know and without knowing might as well put all possible future states on a wall and throw a dart at them to get a prediction. Which means it's impossible to construct a Model with any accuracy.
If you can't construct a Model analysis can only be based on human Decision Making and human Decision Making during a cascade failure, tipping point, instantiation of Emergent Phenomena, etc., is known to be wrong 'bout 88% of the time in the best of times and up to 98% in the worst.
Oddly, predicting the course of future events does NOT mean one cannot predict a high-value strategy to prepare for the course of those events. We have enough evidence of successful past actions during Depressions to be able to strategize about how to prepare for a Depression.
1. Get out of debt. Cannot emphasis this enough. Going into a Depression with debt is a sure way to be hosed. A collapsing economy means a shrinking work force meaning a drop of income meaning debt service (interest payments) consumes an ever-larger percentage of personal income.
2. Co-operate along any axis you can think of: housing, food, energy, & so on. Build those structures now. The fact is a group of people are more economically secure at ANY time and even more-so during a Depression.
3. Localize. Local production, again, of anything you can think of is more secure. The danger here is the politicians could decide to "requisition," i.e., steal, your local production of, say, food to prevent unrest, riots, revolution, by major urban populations.
4. Network. The more extensive your network the better. People like to deal with people they know (the "us" syndrome) and if it comes down to a choice between doing whatever with a known person and an unknown person ... known wins.
5. Real economic activity is better than Unreal. Being a plumber (Polish or otherwise) is better than being a Financial Planner. My father-in-law had a college degree (in French!); he made it through the Depression by being a house and commercial painter as nobody was interested in parleying de francasey but enough people wanted paint slobbered on their walls for him to Make Good. My grandfather (farfar) was a precision tool and die engineer/maker with his own shop; he benefited from a double-whammy: as people's ability to buy new collapsed they got REAL interested in repairing and making good with what they already had and companies were more interested in one-off contracts rather than hiring in-house.
6. Back to the Land. Don't. My grandfather (morfar) had a farm and they barely made it. They found themselves in the position where they had to buy inputs at higher prices than the output could support.
7. Repair, not Replace. Here's a bright spot. Planned obsolescence means a lot of people are going to have their stuff break down and they won't have the money to replace it. Not only does that mean the old Repair Man will come back (job opportunity! job opportunity!) and people will be insistent the stuff they do buy is of high quality and repairable (business opportunity.) This also means anything you buy, starting today, should be high quality, in the US that means "commercial" goods not "consumer" goods.
You'll notice I didn't say anything about Location. The reason is simple: Your Mileage Will Vary. It will vary too much to say anything worth saying.
You'll also notice I didn't say anything about political and political-economic activity. My thoughts on that can be found here.
¹ Jerome excepted cuz he's Our Guy ;-)