Contingency for World Economic Disaster

It seems that the entire World was caught flatfooted by the 2008 Economic Crisis. It makes me wonder whether it forced anybody to do any serious thinking as to what to do for the next round. And there will be a next round. The way such cycles work is that the swings become more frequent and more severe until it hits a bottom. Capitalists are famous for claiming that every Painful Recession is just a ‘Necessary Correction’. Well, the ‘correction’ for Capitalism, as a World Economic and Political System, may be about to hit ‘bottom’.

The big problem, as I see it, is the Growth Factor that seems necessary to Capitalism. Now, one can either have stability and equilibrium, or one can have Growth. And then Growth is only possible in an Open Ended Non-Saturated System. What is an Open Ended Non-Saturated System? Well, I shall provide an example in reverse and describe a Closed System. Imagine that instead of many Capitalist Banks, it is all just one Big Bank. It has ALL the money. Now it lends out it money expecting 6% interest on the principal. Well, where is this 6% extra money supposed to come from? In a closed System there is no extra money. The same goes in regards to Profits. Suppose there is One Big Factory that makes Everything and employs Everybody. Its Customers would also be its Employees. They would only have as much Purchasing Power as the same money that was paid to them to build what they are about to buy. There would be nothing left over for Profits. So both Interest and Profit are impossible in a Closed System. But Capitalism has not yet ever been ‘closed’. Capitalism always has sought its Growth in Foreign Markets. And then Capitalism also cheats by constantly expanding the Money Supply. Theoretically, some companies are supposed to make profits while other companies go bust. But imagine how happy the World would be if 6% of the Companies went bankrupt every year… it’d always be like it is now… and that’s a big problem. This is because Globalization is becoming a Closed Saturated System.

So far Capitalism had only been lucky. The discovery and opening up of the American and Australian Continents provided an escape valve for European Overpopulation, and then the discovery of Arabian Oil relieved for a while price saturation in the Energy Markets. America benefited by the Wars which virtually wiped out the rest of the World’s advanced economic powers. And the Wars also ‘corrected’ the population somewhat – the survivors after the War not only had their own jobs back, but the jobs of their Dead Buddies also… they had their pick and wages were high.

But now with One Global Economy, with no new open Continents, no new Energy Supplies, and with Machinery, Technology, Robotics and Automation taking over more and more of Labor’s Productivity; well, Commodity Prices will skyrocket just as 99 percent of the population lose their jobs and thus their Purchasing Power. Profits, Growth and Interest will be satisfied with the Cheating of the constant expansion of the Money Supply, but combined with increasing demand and scarcity of Food and Energy Commodities, it will all lead to a Hyper-Inflation and the Death of the American Dollar.

Does anybody have a plan?

Right now things are very touchy. Everybody seems to forget that just two short years ago the World was experiencing the beginnings of such a Commodity Price driven Inflationary Crunch. Indeed, that is what precipitated the Economic Downturn – so many Americans had to stop paying their mortgages because they needed the money they were earning for Food and Gas. The Downturn cut off the big demand for Commodities. But what will happen IMMEDIATELY after the mildest Recovery? The Commodities Crunch will pick up exactly where it left off. And the Swing will be worst because Prices will go far higher… all that New Money will go into circulation to buy the same limited supply of Stuff, leaving the Poor further behind than every before.

And it looks like everybody is just going to let it happen.

I suspect that China has some kind of a Secret Contingency drawn up. It doesn’t make sense that China lend America more money than America provides in payment for goods and services. It is as though China is both sending America goods and services AND they money to pay for them. In the short-term this may be necessary for China. China is holding so many trillions of American Dollars, that it thinks it necessary to jump into the breach to protect their value. But the continuous throwing away of its Wealth in order to float America can not continue forever. China must know that it is bankrupting itself by such a policy. Therefore, it is necessary to believe that such intelligent people as the Chinese must have decided on a point where they will Bail Out – where they will Cash Out on what dollars they have left, and use Emergency Powers to immediately transform over to a Planned Economy. We might be able to discern hints about such a move in the way China allocates funding for its Economic Infrastructure. When we see preparations for increased Domestic Consumption, large scale agriculture and transportation projects, then we can guess that China is about to Pull the Plug on the Dollar and weather the storm with its saved resources.

Europe, with absolutely no Leadership or resources, will simply collapse into another Dark Age, but this time with no Church to bail it out.

America also has no plans. Really, there should be Report to Work drills, where it is made clear to people that Employed or Not, people simply can’t just ‘stay home’. If the police ‘stayed home’… if the truck drivers who transport all the food ‘stayed home’… if the utility workers who provide electricity and water ‘stayed home’, well, the East and West Coast Urban Population Centers would collapse into starvation and food riots. The flow of refugees would be met by the Armed Resistance of all those American Gun Nuts. When it would be over not two out of a hundred Americans would still be alive.

But maybe THAT is the Plan. I’ve always said that Capitalism is Barbarism and Barbarism requires a low population density. Once 98% of everybody is dead, Capitalism will work just fine again. Don’t you just love these ‘healthy corrections’ that Capitalism is so famous for?