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The Paradise Perspective: Commentary from a Free and Compassionate Alternate Reality Volume 1, Number 46 The Year Ahead (Part 1 of 2) by Glen Allport Exclusive to STR December
31, 2007
Crisis = Danger +
~ Chinese
ideogram for "crisis"* Luck is what happens when preparation
meets opportunity. ~ Seneca (5 BC - 65 AD) -
- - - - 2008 will be a year to remember. Big events are coming, and the
notion that crisis brings opportunity will be sorely tested. Tipping points are approaching in several interrelated areas. The
most important areas of concern include:
Looking at these problems as a group, it doesn't feel like
"opportunity" or "luck" ahead so much as
"disaster." But the largest opportunities sometimes do
arrive in the form of disasters or crises. For example, dramatically
higher oil prices are fueling a boom in conservation, in alternative
energy, and in solutions we might otherwise never have considered or even
imagined. The coming year will bring plenty of problems to solve, and I
look forward to seeing what I hope, but don't necessarily expect, will be creative and positive
responses. - 1 - Financial and Economic Outlook On the financial front, it appears that 2008 will be the Year
of the Collapse. Not everyone sees it that way; here
is a conversation with several investment bankers, CEOs, and financial
advisors who see 2008, for the most part, as a year of recovery in the
markets. But others in the financial world are gravely worried. The London Telegraph ran a story on "Liquidity doesn't do anything in this situation," says
Anna Schwartz, the doyenne of "It cannot deal with the underlying fear that lots of firms
are going bankrupt. The banks and the hedge funds have not fully
acknowledged who is in trouble. That is the critical issue," she
adds. Lenders are hoarding the cash, shunning peers as if all were
sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank
rates used to price contracts and Club Med mortgages - are stuck at 80
basis points even after the latest blitz. The monetary screw has tightened
by default. York professor Peter Spencer, chief economist for the ITEM Club,
says the global authorities have just weeks to get this right, or trigger
disaster. "The central banks are rapidly losing control." There are many recent articles and commentaries with the same basic
message, and some even
more pessimistic (see also here).
For my part, I am surprised that the imbalances and deceptions of the
world financial system have not brought us to a 1930’s-style depression
– or something different but just as severe – before now. Investor and
author Doug Casey calls what is coming The
Greater Depression and however it plays out (hyperinflation, severe
and prolonged stagflation, severe deflation, or something else), I expect
the name will be appropriate. Significantly higher unemployment numbers
combined with widespread underemployment, defaults on debt of every kind (from mortgages to
credit cards to pensions to bonds to zillion-dollar derivatives), dramatically
lower housing prices combined with higher
prices for nearly everything else (real
inflation levels of ten percent or more, and possibly
much more) are in the cards for next year, or so I believe. I discussed the economic situation in more detail previously in Money
(October) and Destruction
by Paradigm (March). Nothing has happened to magically solve the
problems that were so apparent then; the train-wreck of our post-1913
financial system continues. Using "money" created from thin air
and printed (mostly electronically now) as fast as corrupt banking and
government authorities desire has never
worked well for long and has always brought disaster in the end – see
today's Zimbabwe,
for example, or read about the German hyperinflation of the early 1920s or
the John
Law episode in 18th Century
France. Central bankers and governments know perfectly well about the
long-term destruction they are causing; there is a great deal of history
on the subject to draw from. Central banks are designed
to siphon wealth from the
masses to the banks (and their
owners) and to the corporations and government agencies (and hence to
actual people) favored by the power elite. That
is the true purpose of central banks; nothing more, despite the various official excuses for such
institutions. (Link is to a 10 min 56 sec video; see also this 41 minute video
from the Mises Institute). Eventually, the central banking/fiat currency scheme collapses and
millions are impoverished or worse. But then, the power elite has never
been concerned about the masses; siphoning away wealth from the poor and
the middle class is how the elite became wealthy in the first place; the
elite are no more concerned about the masses than lions are concerned
about gazelles. Some in the
elite got rich by creating value in the market, but – here is the simple
truth – getting rich is so
much easier with government contracts (preferably no-bid)
and especially with government-granted
monopolies – the Federal Reserve being the ne plus ultra in this regard. With nearly the entire world now suffering under such schemes (how
many nations can you think of that do not
have a central bank and a slowly [or rapidly!] collapsing fiat currency?),
there is no reason to believe the present crisis will end well. There is
always the chance that central bankers will be able to inflate one last
bubble or drag out the deflating of this one without causing a full-on
crash, but I wouldn't bet on it. Snapshot
forecast: Severe economic recession or worse, possibly much
worse. Real estate crisis intensifies; prices drop further, financing is
harder to get, the number of people whose finances allow for home
ownership drops as unemployment mounts and inflation eats away at buying
power even for those who still have jobs. Outright failure of several very
large financial institutions (possibly averted with buy-outs, most likely
from government sovereign
funds or foreign corporations) along with bankruptcy of many sizable
corporations. Currency controls, price controls, gold and other asset
confiscation, and/or other authoritarian nonsense likely in response.
Fifty percent chance for a downturn so dramatic that even the Old Media
propaganda machine begins calling it a "depression." Americans
will not handle truly hard times with the grace and dignity so many showed
in the 1930s. If things get that bad, then riots due to food shortages and
general conditions of widespread (and for many, sudden) poverty will begin
in America and Bush will get a chance to make use of those Halliburton-built
detention centers along with the many such centers left over from
FDR's incarceration of 120,000 Japanese-Americans during WWII. Potential
upside and opportunity: Today's economic pain is already helping to wake up the
masses to the harm being done by governments, by corporatism, by central
banks, and by fiat currencies. See the next section below for how this
might, under the most optimistic of scenarios, lead us back from the brink
– or at least point us in the right direction after we go over the brink. For example, few today think a gold-based currency
is possible, but that is now slowly changing. Gold and silver were the
basis of currency in "I
believe that banking institutions are more dangerous to our liberties than
standing armies. If the American people ever allow private banks to
control the issue of their currency, first by inflation, then by
deflation, the banks and corporations that will grow up around [the banks]
will deprive the people of all property until their children wake-up
homeless on the continent their fathers conquered. The issuing power
should be taken from the banks and restored to the people, to whom it
properly belongs."
~ Thomas
Jefferson (1743 - 1826), Letter to the Secretary of the Treasury
Albert Gallatin (1802) The collapse of the present corrupt, fantasy-land financial system
will bring strong pressure to bear for a more realistic, workable, and
fair system – for a system not
rigged against the masses in favor of the elite – and that will require something other than pure fiat money. The monetary
restraint of using gold (and perhaps silver) as money in place of fiat
dollars would, by itself, make our current level of tyranny impossible to
maintain. By definition, using gold as money prevents the ongoing official
counterfeiting of currency that makes your dollars worth less every year
and which provides government with a tsunami of dollars to pay for Blackwater
and Halliburton
and military
intervention overseas and the new billion-dollar
biometric FBI database and a thousand other things that impoverish and
tyrannize the people while enriching the elite. America
spends more on its military than every other nation on Earth combined! Does that make There is now, finally, talk even in the Old Media (at least when
Ron Paul is being interviewed) about ending the Federal Reserve and
abolishing the hated income tax and the IRS. That would have been
unthinkable even a year ago, and the noisily-approaching financial
collapse is a big reason why it is
thinkable today. Those simple and obvious action items would, by
themselves, be a huge step forward in real, on-the-ground freedom and
would be a massive defeat for those who think it their right to rule their
fellow man. A more limited and individual possible upside of the economic
downturn or crash could be strong returns from investments in precious
metals and other real forms of wealth. For relevant sources of information
I suggest 321gold.com, agorafinancial.com, prudentbear.com,
and other contrarian, non-mainstream sites. Real estate will again be a good investment after it hits bottom,
but that may not happen until after 2008 and in any case almost certainly
hasn't happened yet. Nor are prices likely to rise again quickly, so
returns may take years to materialize. Keep in mind the Japanese
housing crash (nearly 20 years in duration – so far. . .) and other
examples that refute the "real estate always goes up" mantra.
http://en.wikipedia.org/wiki/Image:EconomistHomePrices20050615.jpg - 2 - Politics and Government Action For decades, libertarians were the Trekkies
of American politics: they were seen as silly, useless, nerdy, and on the
fringe. But decades of work and preparation by freedom activists are
finally paying off. Today, with the
dollar collapsing, with the housing bubble morphing into a foreclosure
epidemic, with millions of well-paid American jobs having been
outsourced to low-paid foreigners, with America's militaristic
interventionism around the world provoking terrorism and costing trillions
of dollars per decade that America doesn't have
in the first place, with the head
of the federal GAO touring the country to sound alarm about America's
bankruptcy, and with the Bill
of Rights under assault by secret-police agencies and police-state
legislation, Americans are at last opening up to libertarianism in large
numbers. I never thought I'd see this happen, but here it is: the
1988 Libertarian Party candidate for president is now the 2008
front-runner by many measures, including by demonstrated fund-raising
ability, internet (and increasingly, traditional)
polling, website
hits, unofficial supporter
websites, caucus
wins, and sheer American get-it-done enthusiasm among volunteers. What
other candidate has his own blimp?
(Well, it isn't his; it belongs
to a for-profit corporation, and is being funded by supporters rather than
by the official campaign). Who else in the field can raise over $6 million
in a single day, without even asking for the money – only weeks after
raising $4.3 million on another single day? What other candidate has
supporters buying full-page ads in USA
Today and the New York
Times on his behalf? No other candidate than Dr.
Ron Paul, of course. The power elite is peeing its collective pants over Dr. Paul and
his rapidly-growing following. Worse, the "Ron Paul Revolution"
is clearly not about the man (worthy though he is) but instead about what
he stands for: liberty itself. How could this
idea get loose in the world again? I can just hear the powers-that-be
asking each other, "Didn't we put a permanent lid on that one?" A lifetime of pro-government propaganda from government schools,
from corporatist media – from seemingly everywhere
– has not been enough to completely hide the truth from millions of
ordinary people who are now seeing through the lies behind their own
impoverishment and enslavement. Dr. Paul's campaign is educating millions
more – about the Federal Reserve and fiat currency generally, about
Constitutional restrictions on federal power, about America's violent,
interventionist foreign policy and its dire results both abroad and at
home, about the "soft fascism" of corporatism and how it has
impoverished us and led us down the road to a police state, and about many
other things. People are listening to Dr. Paul and reacting as if their lives
depended upon moving Dr. Paul's rapidly-growing
following has brought a measure of coverage and superficial respect by
the Old Media, but despite that, lies, smears, insults, and snubs against
Paul are commonplace. For examples, USA
Today and the NY
Times are still ignoring or slighting the man despite one of his
supporters having paid huge money for full-page ads in their publications
(Paul may have been added to the pages linked by the time you read this,
but as of this writing [checked again 12/30/07 3:42pm Pacific time], he is
not listed with the other candidates, most of whom have less
support by many important measures). Despite that, Paul's support has forced a level of coverage some
thought he would never receive; here is Wolf
Blitzer interviewing Paul on CNN right after the Bhutto assassination
– an excellent and respectful interview, in which the candidate describes
how and why our interventionism is creating disaster after disaster around
the world while bankrupting the nation in the process. This is the simple
truth, and yet it is the opposite
of what we are hearing from all of the other GOP candidates and from the
media-anointed, top-tier Democratic candidates as well. Mitt "We
ought to DOUBLE Guantanamo" Romney would never suggest we stop using
our military to interfere around the world, nor would the Huckster or
Hillary or John McCain or O-Bomb-a, all of whom are clear that we might
just have to remain in Iraq, for instance, until 2013 and perhaps until
Hell freezes over, as with South Korea. Here,
as with the Federal Reserve and so many other things, Ron Paul is bringing
topics and truths into the mainstream that the power elite would kill
to keep hidden. Gulp. Snapshot
forecast: I am largely in agreement with Denmark-based Saxo
Bank, which forecasts chaos in 2008. For example, on the economic
side, they see oil going to 175
dollars per barrel. They see Oh, and in the political realm, they see Dr. Ron Paul winning the 2008 election. As I said: these five major
tipping points are all interrelated. Saxo has a surprisingly good track record (here are their
predictions for 2007) but no one is right all the time, and as much as
I hate writing this, I see the anti-Paul forces as likely to prevent his
nomination. If he does capture
the GOP nomination, I predict he will win in a landslide (unless Kucinich
is the Democratic nominee, in which case I expect a close race), but I see
maybe a 25% chance for Paul to become the Republican standard-bearer. In a
few weeks time, after the first few primaries, there will be more
information to work with. In the meantime, I expect the federal government to continue
amassing unconstitutional laws, agencies, signing statements, executive
orders, regulations, and other assaults on our freedoms and wallets, with
acceleration in the use of these pseudo-legal tools against average
citizens. The worse this gets, the more people will support Dr. Paul and
any other credible pro-freedom candidates who might emerge. It is perhaps
not overly dramatic to characterize this as a race between the forces of
extreme tyranny and the forces of liberty; between the corrupt power elite
and the people as a whole. I do not yet have the sense of even 50-50 odds
for avoiding the disaster of an outright police state, but as the Paul
campaign awakens millions and gets them hopeful and then actually excited
about the prospects of freedom, the odds are improving, and rapidly. Even
a win for Paul won't end the danger and even a loss for him won't end the
revived movement for liberty he has sparked, but clearly putting Ron Paul
in the White House would be a powerful move back from the brink. Maybe we
could even bulldoze those detention camps. Potential
upside and opportunity: Freedom! OK, partial freedom.
Perhaps "the beginning of movement away from tyranny" would be
more accurate. "Freedom" is what Henry David Thoreau was talking
about in Civil
Disobedience when he wrote "That government is best which governs
not at all." 2008 will not bring us that, but it could well see the
start of progress in the right direction. If not, I shudder to think about
where we are headed. Another potential and related benefit is wider understanding of
where the Old Media stands in this struggle, which is to say firmly on the
side of evil. The shocking behavior of most of the Old Media outlets in
their coverage of Ron Paul makes it very
clear that the corporate Old Media favors the stances and worldview of
their favored candidates: they (both the candidates and the media) are,
with occasional exceptions to some part of this list, pro-war,
pro-torture, pro-tyranny, pro-Drug War, pro-empire, pro-central bank,
pro-fiat currency, pro-income tax, pro-government takeover of health care,
pro-gun control, pro-secrecy, and in favor of basically anything
that takes money and power away
from the masses and gives it to
the elite. There are a few individual exceptions among the people working in
front of the cameras or at the dead-tree media's word processors, but they
are rare. If nothing else, our worsening economic and political situation
combined with Dr. Ron Paul's courageous and spectacularly popular run for
the presidency have brought awareness and open discussion of these issues
– that is, of the real
issues, which the Old Media has worked so hard to distract the public from
(Oh look: Paris Hilton snagged a
nail!) – and shown
people where the various players stand. The year ahead will be interesting indeed. -
- - - - Next week: Part 2 of this column. -
- - - - * On the adage of Crisis =
Danger + Opportunity, the linked page points out the following in
regards the Chinese symbols: However in reality, a crisis is still a dangerous state of affairs
- regardless of the language. Crisis wei ji still means "a situation that has reached an
extremely difficult or dangerous point". However, a dangerous situation can become an opportunity if wei ji
becomes zhuan3 ji1. Zhuan ji means "turn for the better". Zhuan means
"turn into". So zhuan ji means "turn into
opportunity". In this sense, the Chinese symbol crisis can mean
"opportunity" in a time of "danger". Others also point out that using the Chinese characters for
"crisis" to support the adage is not entirely sensible; see the
related essay on Wikipedia for one example. The image file of the
characters used above is a resized version of one used in the linked
article (here
it is again). ** To be more precise, in 1933, Glen
Allport is the author of
The
Paradise Paradigm: On Creating A World of Compassion, Freedom, and Prosperity
and
maintains paradise-paradigm.net.
This is one in a series of columns on the human condition. |
