Wednesday, April 08, 2009

Around The Corner?

These days there are just too many signs to ignore the fact that 'something' is around the corner... and the feeling that things just might get worse before it gets better. I was reminded that:

In 2007 Lord Cameron of Dillington, first head of the UK Countryside Agency, famously remarked that Britain was ‘nine meals away from anarchy.’ Britain's food supply is so totally dependent on oil - 95 per cent of the food eaten there is oil-dependent - that if the oil supply to Britain were suddenly to be cut off it would take just three full days before law and order broke down. "We rely on a particularly vulnerable system. Britain needs to invest seriously in agriculture infrastructure if we are to avoid food crisis" said the noble Lord at the time.

A commentator I sometimes read is Dmitry Orlov who has for a number of years compared the collapse of the Soviet Union (he was there), to the forthcoming collapse of the US. Yep - I said 'forthcoming'; Orlov believes it is inevitable. Not only has he been thinking/researching this for the past 2 decades, but he's been actively publishing about this online since at least 2006. At this time back then he was discussing hyperinflation in the US.

Here is a link to a talk he gave in December 2006: it's long so you may prefer to just look at the slides! See -

Or, for an easier soundbite there is a 11-minute video he recently did with satellite channel Russia Today:

The bottom line of Orlov's hypothesis is that people in the West are just not prepared - for anything. And everyone believes that everything will just get better without any real trouble...

Now we have the G20 proposing that the IMF issues SDR's - Special Drawing Rights - as a reserve global currency 'should' it be required...!

Read -'
The G20 moves the world a step closer to a global currency'

Whilst 'The Daily Reckoning' - an influential economic newsletter - had this to say about SDR's:

My brain went into some kind of weird spasm when Zhou Xiaochaun, head of the People’s Bank of China, went on record as saying that he doesn’t trust the dollar to be the world’s reserve currency anymore, and wants, instead of gold, the International Monetary Fund to expand the supply of Special Drawing Rights (SDRs), which is just another stupid fiat currency, to use as the world’s reserve currency!

I can tell by the way you are not screaming in fear and frantically clawing your way to the nearest exit in a generalized panic that you do not know what a Special Drawing Right is. So prepare to scream and claw when I tell you that — according to the Economist magazine, which I cite as a source since you never believe anything I say — an SDR is “a synthetic currency created by the IMF, whose value is determined as a weighted average of the dollar, euro, yen and pound”! ...these Chinese are smart enough to reject an over-valued fiat dollar, but then being so stupid that they prefer, over gold, a basket of four fiat currencies, one of them being the damned dollar, along with their four corrupt governments, which collectively own the IMF by virtue of having funded the damned thing in the first place!

AND - At the same time the Swiss are slipping into deflation territory:

Read - '
Swiss slide into deflation signals the next chapter of this global crisis'

Something is smelling bad... and I have a gut-feeling that 2009 will not be everyone's favourite year. Question is: should we be concerned enough to do anything?

As Orlov says:

It is human nature to want to postpone making unpleasant decisions until the last moment, and we can do so with impunity, provided we leave enough options open for us to choose from. Every day that we live contentedly within the status quo, we restrict our options further and further, by making ourselves increasingly dependent on more and more systems over which we have no control, and on which we cannot rely. But there are also small, conscious steps we can take that break some of these dependencies, and create new options for ourselves. If we take enough such steps, then when the time arrives for a major, life-changing decision, we will be ready.

At least the jury is out for most people. For me - I'm an eternal optimist and I know that it will all work out in the end... YET, it's just the 'meantime' I'm concerned with... what's the point of having savings in the bank when there's either an extended bank holiday (read 'Argentina'), or hyperinflation (read 'Zimbabwe'), or tits up (read 'Soviet Union')??

These days there is too much complacency and not enough asset-building. What's really needed to secure a valuable life? Credit for HDTV 52" screens, or physical resources?

If you had 6 months advance notice of 'something' around the corner - what would you do with your time?

Maybe it's a case of 'Hope for the best - but plan for the worst'!

Then my next thought is.... perhaps we are not actually in control of our lives; only we think we are. We ´think´we are the commanders of our own actions, yet in reality we are...

In the end - things happen to us.



el scriptador said...

Your posts are very useful, thanks ;)

Kingsley said...