The Future and Your Family By William CateWe're on
Titanic. The iceberg has been visible for over fifty years. Governments have done little to avoid collision. Do you have a lifeboat for your children?
The World Economy Is An Illusion
Governments manipulate economy to achieve short-term political stability. For instance, most Government statistics have a strong bias in favor of leaving populace with a favorable view of present economy. While special interest groups and many politicians may disproportionately benefit from ongoing economic manipulation, goal is to keep electorate content. In general, Government manipulation has succeeded since 1930s. However, short term illusion has deferred long term problems. It hasn't solved them.
Fiscal conservatives argue that U.S. Government debt financing of over $5.7 trillion isn't in public interest because it creates currency inflation. Over time, inflation destroys populace's faith in currency and economy fails. What these fiscal conservatives fail to realize is that trillions in debt financing creates jobs today in both Government's growing bureaucracy and in private sector that supplies whatever goods and services government seeks. It creates a rosy now for a dark future.
At end of WWII, Bank of America introduced first VISA credit card. The credit card industry has evolved into a multi-trillion dollar consumer-lending program. If you combine credit card debt and mortgages in U.S, consumer debt is greater than Government debt. You can borrow your way to temporary happiness. You can't borrow your way to solvency.
Built upon this unstable Public/Private multi-trillion dollar debt structure is multi-quadrillion dollar Derivative's Market. It puts at risk more than thirty-six times value of all currencies in world. Banks and Hedge Funds are betting that governments can maintain their economies against growing debt. It's a bad bet.
In The Great Contraction by Milton Friedman and Anna Schwartz, they argue that Great Depression was result of monetary forces. Applying this thesis results are Depression started when one Austrian bank failed. Within months, ten thousand banks failed. Unemployment was rampant for years. Extremists rose to power. WWII resulted. The Depression ended when debit spending for WWII created sufficient jobs. The success of debit spending paved policy path for governments after 1945.
Today, Public/Private debt structure is far worse. Derivatives put world banking system at extreme risk. National economies are integrated. The first time a major government stumbles, Mother of All Depressions will result. It will be global.
The Environmental Danger
Environmental issues are long term economic issues. From Paleolithic to present, technological advancement usually means increased population and reduced biodiversity. As any observant caver or aquarium owner realizes, simpler ecosystem, more likely it is to fail.
The Industrial Revolution gave mankind ability to destroy global ecosystem. Most scientific research supports fact that we are doing a very efficient job in increasing world's population while reducing ability to sustain that population over time. The results will be a multi-century Depression of unbelievable hardship.
Consider Romans. Their technology produced no more than a quarter horsepower of power. Using their limited technology, they converted Southern Europe and Mediterranean into arid agricultural land. Like wheat farming in Oklahoma and Texas Panhandle during WWI that resulted in dustbowl of Depression, Romans soon learned that resulting farms weren't profitable to work. Farmers fled land for cities. The Romans passed laws to keep farmers on land. These laws tying poor farmers to land formed basis for serf system of Dark Ages that followed.
