Monday 10 October 2011

The Coming Collapse of the System

George Ure and Gaye Levy, Contributors
Activist Post

Today we introduce you to The Shift. This is important because what is happening today will impact all of our lives, to one degree, or another. Shall we get started?

If you follow the work of Strauss & Howe in their book, The Fourth Turning: An American Prophecy – What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny, you may already be familiar with the concept of The Shift. But if not, let us take a few moments for a quick refresher on the massive socioeconomic change we are in.

We begin with a discussion of a “saeculum”. Strange word, we know. Here is how it Wiki’s out:

A saeculum is a length of time roughly equal to the potential lifetime of a person or the equivalent of the complete renewal of a human population.
The term was first used by the Etruscans. Originally it meant the period of time from the moment that something happened (for example the founding of a city) until the point in time that all people who had lived at the first moment had died. At that point a new saeculum would start.
According to legend, the gods had allotted a certain number of saecula to every people or civilization; the Etruscans themselves, for example, had been given ten saecula.
The concept of a saeculum shows up in many ways in society, but often the concept is just below the awareness level. A sort of “soft” thing you sort of know about but just can’t quite put your finger on.

Oh, sure, some of the sayings of our parent's or grandparent’s generation spoke of it in many ways. After all, they are the ones that came through the last gut-wrenching social change period known as The Great Depression.

Back then, the saying was along the lines of:

One generation makes the fortune, the next generation shepherds it, while the third generation squanders it.
And to some extent you can see that today in how the key names of the American Aristocracy of past generations are busily squandering today. They do it with drugs, alcohol, personal quirks, and a myriad of eccentricities. It is all over the headlines in the tabloids, yet it doesn’t quite all seem to be there. There is something deeper.

What’s deeper are the two kinds of “long waves” in the economy.

The First Long Wave

One is the conventional Kondratieff Long Wave, named after the Russian economist who, while working for Joe “the Butcher” Stalin, provided an insight into America’s future. He said – much to Stalin’s joy – that America would soon succumb to a great depression the likes of which the world had never seen before. Gold stars to Joe the Butcher.

But then he made the mistake of continuing: “America will then rise again from the ashes to be greater than ever”. This is not something a sane person would say to Joe the Butcher, unless you want to pack on out on the next train for Siberia, which is where Kondratieff landed.

Still, his landmark work on economic cycles (using theories dating back to the 1200s when grain prices in Europe were the big thing) stands as testament that something big happens once in a very long time – and the timeline seems roughly equivalent to the Jubilee Year spelled out in the Book of Leviticus in the Bible. Kondratieff’s neatly quantified view was that every 50 years there was a general need to renounce debts and divide up the spoils of society. You know, those same spoils that have been spending about 50 years or so accruing to the rich. Come the Jubilee, all debts are forgiven.

All budding economists should note, however, that the Jubilee (Lev. 25:2) was actually not 50 years, but 49 years. And under this was a seven-year cycle, which, if you ever went to church or temple, you may remember as seven years of fat, seven years of lean. The idea is that you take seven cycles of seven years and you’ll have stresses worked up in the economy. This is true even if the society was simply agrarian with no iPhones, no gizmos, and no Netflix.

Suffice it to say, in the most simple of terms. that with Jubilee, it was sufficient that everyone’s interests would best served with a healthy distribution. So, in a sense, this is really a kind of bipolar economic cycle: One generation makes it and one generation blows it. And, so it seems, they do so in chunks.

The Second Long Wave

There's another view of the saeculum which George Ure and Ehor Mazurok proposed more than 10 years ago. This is an 83.5 year cycle, which is much closer to the Strauss and Howe “Turning” cycle length. Their core idea was summarized in a January 2001 paper. It argued that if a currency, such as US Federal Reserve Notes, is using interest, then over time that interest must depreciate the currency. Furthermore, there comes a threshold beyond which a unit of currency may no longer be more fully loaded with debt.

Is the light bulb going off yet?

Indeed, if one compares the purchasing power of a single US dollar from 1913 with the purchasing power of a single dollar today, one will find that all that remains is approximately 4.6รง worth of purchasing power. Where did the rest go? Essentially, it’s now diluted as debt service priced into the base currency: the US dollar.

This is why hard money advocates who argue there should be an intractable standard of wealth – such as an ounce of gold or an ounce of silver – are so adamant about their cause. This concept of intractable standard of wealth goes part and parcel with the larger “turning” now underway.

One difficulty with The Shift is that not everything is apparent. Clearly, we argue, the main feature of both the Bush and Obama administrations' economic programs has been an effort to offset the incipient inflation expected in the Shift with a rapid printing of money. This is no simple matter, however. If the printing goes too fast, hyperinflation becomes apparent and gold soars. But, if printing is too slow, the engine of deflation becomes apparent and jobs are gone. Poof. Jobs have disappeared and vanished on a wholesale basis with barely a scrap or two left.

Not sure we’re being square with you on this?

If you take a look at the Federal Reserve H.6 Money Stocks report, we can assure you that at publication time, the 3-month printing rate for cash and equivalents – annualized – was 36.8 percent. In “normal” times this would signal the arrival of hyper-inflationary nightmare. But, couple it with heavy-duty deflation in the background and you have the basis for what we see before us today: a topsy-turvy stew of apparent contradictions, which do, upon close inspection make perfect sense, provided you’re into preserving the old paradigm and the power and wealth of those presently on top.

And everyone else? Off they go to occupy Wall Street, the Streets of Greece, or the streets of Portugal. You name it. They are there and they are mad. One could say we’re in a never-before-tried period of well-intentioned muddle-through. Whether it is working, depends who you ask.

One of George’s readers on the Urban Survival site summarized how The Shift is being felt by young people. He sent a description of what some are calling “The Turn” and what it has meant in his own household:

Well, it mostly fits with the mindset of my kids in one way or another.
I have a lawyer son who hates the corrupt legal system, and refuses to overbill his clients. They keep him because he is the only one that can work the SQL for retrieving email data in large cases and has a law degree. But he hates it, thinks it incredibly corrupt, and wants to change careers. “Wish there was something I could do to fix this broken system…” is a frequent lament of his. He craves change.
I have a daughter who is beer/wine manager at local grocery chain. She hates the PTB because of their corruption. She believes in the system and in people, but that is being eroded due to watching people steal, seeing butt-kissers get promoted who have no ability, and the usual broken system reasons. She is a liberal who now thinks O is a joke. She wants a new system that is fair and where she can make a difference.
Youngest daughter just got her first double-speak about jobs. Told there was no money to give her a raise that was promised, and then watched her boss hire two of his cronies into new positions with no responsibilities. She has to deal with 65 kids, and they have to deal with 10 each and get paid twice as much. Her anger and disgust is palpable, and she sees no options in her future even with her marriage coming in November. And she has that 4-year degree too.
Youngest (20) has his friends over in evenings. They play video games, but also talk. This bunch is completely disabused of any hope for progress in the current system. They have minimum wage jobs and are going to school, but there are zero job prospects. If their shit falls apart, they would be willing to work for room and board outside the system and try something new. They have actually approached me about this, as they feel there is no reason to continue working as they are – better to have a shot at something – they smell winds of change.
Boss is a complete right-winger, and tends to blame O. And yet at the same time, waxes on about the systemic corruption and dreams of a tidal wave or hurricane plastering Maryland. Has bought place in (near Landry’s digs in OK) with cash and has plans to just exit the system and exist local up there.
Shop guys are all about self-sufficiency and living on less. All hunters and firearm friendly, and every one of them thinks the state and local systems are totally corrupt. They all want some major changes, particularly in wage distribution and banking – where they keep getting hosed by the credit card and mortgage people.
All agree that any national election will be a choice (in South Park terminology) between a Douche and a Turd Sandwich.
The restlessness and impatience with the PTB is increasing rapidly and we haven’t even gotten to the market shock or the Mideast thingy or the ice or EQ yet.
I would say the powder is very dry and ready all around us. What the MSM and PTB are NOT seeing is the anger and weariness that most people have for being lied to at every turn. There is absolute distrust of everything that comes across the news outlets for the typical American these days. The “investor class” (those with money to invest) seem to be the last ones with hope and at least a rudimentary belief in the system. But the guys in my shop? Well, about half of them no longer keep their cash in the banks after the 2008 crash.
They are all 110% disgusted by politics and governance, and would gladly climb aboard any change train passing through the ether we live in.
Just what I am seeing personally – the revolution meme fits the mindset all around me. Will not take much to engage the mechanism.”
And indeed, the mechanism is already engaging in the “Occupy” cities and much of Europe.
Whatever it is, we call it “The Shift”

Part economics, part reality. The retirement plans of the current crop of freshly arriving grays who are pulling the F.U. switch at the rate of 10,000 per day are not going to have enough money to live the golden years in a golden manner. Nor are young people going to have jobs because multinational corporations are moving production facilities to third world hell-holes rather than comply with regulatory requirements in the USA.

But then, to make matters worse, the faceless transnational corporations (TNCs) are pouring their excessive costs on to the backs of their American business units. As a result, major Dow component and S&P 500 component companies, in many cases, pay little or no US income tax, while the real bread-and-butter workers pay their annual tax bill without recourse and, oh yeah, they are being forced into mandatory health insurance and other socialistic fodder.

And did I hear someone say the the corporations do not deserve scorn? Well, not in this crowd and not in this room.

Politically, big changes may be expected – and we will see those changes outside of the corporate duopoly. Those experiencing the BOHICA (*bend over, here it comes again*) part of The Shift already know neither Republicans, Democrats, or even the short-lived idealism of the Tea Party is really serving their interests.

Strange as it seems, a coalition of the unemployed 99’ers, Roseanne Barr supporters and Union workers who are sick of things and aren’t going to take it any more may be emergent leaders of The Shift. Those who cling to the false body of right/left politics have really missed the boat. There is so much “juice” floating around Washington, D.C. (not to mention all the TV time given Jack Abramoff and his ilk) that American elections might be more efficiently (and maybe even honestly) handled online by eBay.

None of which should be taken as “manifesto” but rather as a statement of position. No, we’re not planning to run down to the barricades, but we’re developing around Strategic-Living a new concept: Strategic Spending.

Every time you give a dollar to a transnational corporation rather that a local worker in these United States, you’re casting the most important vote of your life. Talking about a Strategic Living empowerment!

You’re voting today with your wallet for how you want The Shift to happen. And maybe, just maybe, if enough people “get it” there will still be an “f” in the word Shift in five years or so.

Add to Technorati Favorites

No comments: