What happens when society collapses (2021)
readysquirrel.com
readysquirrel.com
>Borrowing money and the ability to pay it back depends on an economic system with future growth,
The common "argument" for this type of thinking is that if you borrow $100 and have to pay back $110, then in the future there has to be more money. This ignores the time value of (labor/money/invention...) as follows:
Fix money in the world at $200, owned by B (representing the external system to actor A).
A borrows $100 from B, owes $110 in a year. Now A,B = 100, 100
A then works (say even for B), earning $50 over the year, and used $40 to live on (spent wherever, say to B if you like). Now A has 100+50-40 = $110, B has 100-50+40 = $90.
Now A pays off B, returning the 110, and the state is back to start A,B = 0,200.
There is no need for more money to pay off interest, because time and labor and other things have value.
This articles uses this misunderstanding as proof for needing infinite growth then extrapolates to the system has to fail.
It's simply not true. Over the years I've had to explain this to many, many friends under the same thinking, and most of them get it and stop the "we need infinite growth!" mindset (at least for this type of argument).
An historical example of needing more money because an economy ran out it and people couldn't get any to do financial transactions:
* https://en.wikipedia.org/wiki/Great_Bullion_Famine
* https://en.wikipedia.org/wiki/Great_Slump_(15th_century)
See also the Great Drepession for another problem with a fixed money supply:
> However, Temin (1989) argues that, once these destabilizing policy measures had been taken, little could be done to avert deflation and depression, given the commitment of central banks to maintenance of the gold standard. Once the deflationary process had begun, central banks engaged in competitive deflation and a scramble for gold, hoping by raising cover ratios to protect their currencies against speculative attack. Attempts by any individual central bank to reflate were met by immediate gold outflows, which forced the central bank to raise its discount rate and deflate once again. According to Temin, even the United States, with its large gold reserves, faced this constraint. Thus Temin disagrees with the suggestion of Friedman and Schwartz (1963) that the Federal Reserve's failure to protect the U.S. money supply was due to misunderstanding of the problem or a lack of leadership; instead, he claims, given the commitment to the gold standard (and, presumably, the absence of effective central bank cooperation), the Fed had little choice but to let the banks fail and the money supply fall.
* https://www.nber.org/system/files/chapters/c11482/c11482.pdf
>See also the Great Drepession for another problem with a fixed money supply:
Sure but the system worked for the whole 1800s with basically no inflation during that time. It may not be ideal but "works for over a century" is pretty good to me.
Here's where you can start looking at the data
https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_Un...
Which would you prefer to live in?
Here's some of what it was like to live then for comparison https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4577070/
The PP was talking about inflation of money supply.
For reference, you can have liquidity problems and an inflationary money supply at the same time.
Yes, an economy can hit a liquidity crisis, but it's not because the reasons the article claims.
And deflationary spirals are also not because of there is not enough money to pay old interest.
These are two completely different things.
The reason modern economies do not want fixed monet supplies is because the other problems it causes: the GD taught the world the problems of a deflationary spiral, which is why all modern central banks target slight inflation. This has led to more stability than previous systems.
And, as money inflates, and as economies grow, there is need for more money to allow trade to function efficiently.
But none of these reasons are due to there simply not being enough money to pay old debts plus the interest.
The article above seems vastly far from this understanding of modern economies and why things are done the way they currently are.
Working creates value (well, working on something others value...), which is priced and then traded using money as the medium, correct?
>The hole is simply shifted around while it grows infinitely.
I'm not sure what this means.
If it is long the value (and the proof value can be created) can be collateral for money creation but only as debt.
On a personal level you can earn and make payments. It seems very simple.
Collectively we are sinking deeper into debt. It cant be any different if debt is the only way to pay for debt.
The new money changes hands and becomes our excuse to create more debt.
Think of it like this: Say we want to enslave humanity and keep everyone working for our personal benefits.
There is no better system than to convince everyone they owe us just a little bit more every month.
The self check to see if you've bern brainwashed would be to ask who should create the currency. Gov could do it no strings attached.
Or you could let private entities enjoy the privilege to create that money you work for out of thin air in unlimited quantities for their personal gain.
It would make a world where resources, equipment and labor are not really worth much.
It takes 30 years to pay for a home because your work isn't worth much.
Take any "primitive" village where everyone owns their home and their land. They have debt too but it is owed to other villagers who had to deliver something in exchange.
Their labor is nowhere near as productive as ours. How is it possible that they survive at all?
For what it's worth, I think it's important to be prepared, and I can understand how someone would look at the financial system and feel uneasy.
But I'm not sure that a financial system collapse necessarily implies a complete collapse along all the other vectors the author mentions.
Granted, from an individualistic viewpoint I can’t stop societal collapse but I can stockpile supplies
¯\_(ツ)_/¯
> If the supply lines fail the shelves will be empty in three days.
We’ve already had glimpses of this in the US with localized scenarios: natural disasters, protests
But, from the Bosnia scenario:
> The Americans dropped MREs every 10 days to help blockaded cities.
The country that can send HIMARS and Javelin systems halfway around the planet, at the door of a supposed “super power”, without consequences, is doing pretty well logistically
"A traveler walks into a small hotel in a small town, places a $100 bill on the counter, and asks the innkeeper to view a room that he might stay in for the night. The traveler goes upstairs to look at the room.
The innkeeper picks up the money and immediately goes to the town carpenter to pay his debt for repairs to the hotel.
The carpenter takes the money to the local grocer to pay his bill for food and supplies. The grocer, in turn, goes to pay off his debt to a traveling salesman from whom he bought goods for his store. The salesman goes to the innkeeper and pays his bill for the room he has been staying in while visiting the town. The innkeeper places the $100 bill back on the counter.
The traveler comes back from viewing the room, picks up his money, tells the innkeeper he will look for another hotel, and walks out the front door."
-- https://businessmirror.com.ph/2015/06/03/the-innkeeper-and-t...
The only kool aid you can drink is that the problem is not as severe as someone says.
In the meanwhile we are having a drought in Italy, that will decrease our agricultural production by 30%,some zones by 50%.
Of course, we have a problem.
Finite resources do not support infinite resource exploitation, that much is obvious. humans, however, have access to vast sums of energy via the sun and internal earth processes, as well as the capacity to reach out to the solar system if the shortage of any other resources were depleted on earth. We could already do this but for the niggling fact that the cost to exploit extra-terrestrial resources is higher than the current value of those resources.
Regardless, raw material extraction and manufacturing is only a portion of overall economic activity, and a fairly small portion at that. The majority of growth over the past 50 years is in non-resource-dependent industries, which theoretically is not tightly bound by finite resource constraints.
In fact, what we are finding now is numerous Western industries determining that their primary operational constraint is not natural resource availability but the lack of accessible human capital. There are too few humans for the available jobs.
1,2,3: citations needed.
Later there is a section by person who survived the collapse of Bosnia, but even the blogger can't confirm it is authentic.
I kind of hate read stuff like this because people who want to convince you the world is ending often are secretly hoping that the world will end as some sort of validation. Be prepared for natural disasters and power outages, thrive in the world as it exists.
Profiting through interest was usually considered in poor taste, and generally lending was done primarily for business ventures and not something the average person utilized.
This means that an economic system that permits lending without infinite future growth can and has existed.
This is second hand knowledge conveyed to me by a banker acquaintance and, of course, everyone should do their own reading on the matter if it is important to them.
This is trivially disproven by doing a few searches on wikipedia: https://en.wikipedia.org/wiki/Compound_interest#History
Disproving my (unsubstantiated) assertion would involve a bit more than showing that compound interest existed in the past.
Of course you could follow GP's very effective and valid strategy of simply stating that I must support my claims if I wish to sway your views. As it stands now we're both pontificating on the internet.
I was fully aware of the academic flaws in my original comment, and indeed phrased it that way intentionally so it could be construed only as what it was... anecdotal evidence with an appeal to weak / questionable authority.
I assumed that those who took it upon themselves to read it would be capable of understanding these things and either conclude that it held (no) merit in light of their own first-hand knowledge, or, required further independent investigation to validate.
Somehow, intentions of leaving a breadcrumb for the curious reader has turned into these far more detailed responses to individuals who, by my own interpretation, understood the sentiment and yet still choose to engage it as if it was something else.
It's not free in this case. But the lenders are far kinder to the wealthy borrowers. Look at how many times lenders have simply dropped the collections on Donald Trump's loans. He's been very fortunate in that regard.
His doomer porn has been circulating since at least the oil price shock of 2008 ($147/barrel) and the financial crisis of 2008-2011. It might make for fun video games and striking dystopian movies, but I wouldn't start excavating tunnels under your property just yet. Have some faith.
Besides, making bets that only pay off in TEOTWAWKI is pretty stupid because nobody wins in those scenarios. A better use of time and energy might be to work together to figure out solutions to the big problems we currently face.
Add in NATO countries, you have 949M people, essentially most of the first world, most of the world's wealth, and all representative democracies.
These kinds of articles border on fetishizing the doomsaying, and end up promoting the worst kind of fear-driven consumerism, including consumerism of guns and ammunition. The ads sprinkled between every paragraph are a nice touch, too.
someone idealized the "right to be immortal" when they conceived of america.
Knowing a bit about human nature, however, I'm aware that we all have a perverse hidden desire to see the world end, which is why doomsday predictions occur so often in religious myths, why doomsday movies are so profitable, and why some people wish to convince you that it'll happen tomorrow, and even try to hurry it along.
And while I agree that basic "survival" skills are valuable, and that you should keep some supplies in case of an emergency, the majority of our energy should be spent working better as a group, towards a more effective society that is itself more resilient against disasters, natural or artificial.
In some disasters, the opposite is true. I would like to understand the factors that made life different for the man in Bosnia who wrote the letter vs the outcomes other disasters. The letter seems to imply that there was some kind of siege on the city (or some kind of martial law?) and that the conflict was protracted. It could be really important to understand at what point things went sideways. My hunch is that the pain comes from above in the form of military force rather than bubbling up from from the bottom in the form of the people loosing their sense of charity. I could be wrong tho.
In other shorter-lived disasters, people came together an helped each other in really powerful, life-changing ways. Such disasters include: Hurricane Katrina, Hurricane Sandy, the derechos in the midwest, flooding in the upper midwest, and the San Francisco earthquake.
In the US, it is very unlikely we'll have that kind of seige. But, not impossible. Civil war can always come, even to western nations. But it is very unlikley. Much better to prepare for widespread looting and civil unrest, which is best fled. Or, to prepare for a temporary shortage because of panic buying. Or, to prepare for utility shutdowns due to natural disasters, so that you can wait out the first 72 hrs of panic'd buying and fleeing.
But if you take a step back and instead focus on how fragile the economy is, you instead can reach the same conclusions without the lie in the sky.
Imagine if some nefarious nation/ group / person decides they are going to blow up all the chip fabs? Pretty hard considering there are a few hundred of them, but even a select few could send the world into a huge recession for a few years.
Imagine if someone destroyed a group of grid transformers? It would take at least 6 months to get that regions power back on.
What if some American president utilized the military to its true power? This would destroy most of the world’s manufacturing capabilities.
These scenarios are much more likely than ‘financial collapse’ but will definitely lead to it.
A collapse of our current society, that is mainly based on paper-money can happen. And even if some of us can see that certain things looks awkward, our brain is fooling us into the safest route "don't panic, it cannot happen to me".
I say it's just a matter of time for a major shift of how our civilization keeps going ahead.
We are even stuck in a cultural fallacy where the person policing managing or politicing gets all of the credit and the money for the work they didnt do.
> Political collapse occurs when governments can’t provide food, shelter, transportation, and security
Those are the things that will hurt the most. "Great" management is needed in these areas which apparently means wages need to be squeezed as hard as possible. Who wants to work in the food sectors? woah no thanks! Transportation isn't a real job either is it? I'm talking about the actual work not the bean counting around it. Or how about being a fucking hero in the security sectors? No thanks!
Not to argue bean counting doesn't add value but no one in governments provides food, shelter, transportation, or security. The talk:value ratio is off the chart.
I'd love to own a vacation home, enjoy HAM radio and small firearms, and don't mind keeping a month of food and water around if I can manage it.
except, you have to enjoy the large firearms too.
keeping a month of food, and hunting a month of food are close to equal effort around here, and yes we have tech here.
an example?