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Predicting Financial Collapse (and what to do about it)

June 9, 2024

Predicting Financial Collapse (and what to do about it)

Many people ask me about how to insulate themselves from a financial collapse of some kind or another. I am not a financial advisor, and my focus has always been on collaborative resilience, whereby collectives of people might cope better. But when pressed by friends on what they could do to protect themselves a bit, what I typically recommend is to lessen one’s dependence on goods and services traded within a corporate market place, participate more in an economy of locally-produced goods, try to own some of the basic necessities like a bicycle, and if having some savings then put some of that into crypto (like Ethereum, which does not require massive amounts of energy), gold or silver (in physical possession), or other items that are likely to maintain their value and utility over time. I also recommend not postponing things like elective surgery or house repairs. Further than that, I suggest people no longer assume that their financial savings will give them spending power in the future and instead that they look to nurture other kinds of ongoing productivity with that money. In my own life, these considerations combined with my wish to promote collaborative resilience, so that I funded the launch of an organic farm and farm school in a country where I could afford to do that without debt. But financial resilience is not my field. Therefore, I asked my colleague Matthew Slater to explore this issue with me. In the following guest essay, Matthew writes as one who has been devouring financial collapse narratives since 2008 and studying the phenomenon of money, as well as building alternative means of exchange…

…click on the above link to read the rest of the article…

The world in 2018 – Part Four

March 28, 2018

The world in 2018 – Part Four

In the modern world, our perceptions of reality are largely shaped by economic and financial considerations, and our policy conversations are largely built around intellectual categories and evaluative criteria that pertain to the economics discipline. Yet a long-term view shows that ‘The world in 2018’ is in a significantly different place than what economists typically claim, and than what many of us want to believe.

We human beings build our perception of our personal and collective reality on a number of objective and subjective factors, which vary significantly between individuals and societies, as well as across time and space. However, for a majority of people in the modern world this perception tends to be mostly based on economic and financial considerations: the way we, individually and collectively, at any given moment in time, perceive our material and financial situation and prospects, and our material and financial well-being (absolute and relative), typically dominates our overall perception of our personal and collective trajectory and situation. It also influences the way we think about the other elements that contribute to shaping our worldview: when our perception of our material and financial conditions and perspectives is positive, it tends to foster our individual and collective confidence and security, which influences our views on other aspects of our lives and on our ability to address the challenges we face; when this perception gets more negative, on the other hand, it tends to make us insecure about our ability to deal with issues in other aspects of our individual and collective lives, and can in some cases hamper our ability to address them successfully.

The central role of economic and financial conditions in shaping our perception of reality has long been understood by policy makers the world over, who constantly try to influence the way these conditions are viewed and represented in society. It has also, of course, led them to seek advice from economists to find ways of improving material and financial well-being in their jurisdictions. With the development of economic science over the last century, economists have gained increasing sway over policy-making in industrialised as well as industrialising nations, and economics has become – by far – the most politically influential social science. This influence has only grown in recent decades as the modern economic system was becoming more complex and economic growth was becoming more difficult to achieve. Since the 1980s, economists have largely influenced the design of public policies in many Western countries, pushing in particular ‘neoliberal’ reforms that have increased reliance on market mechanisms and fostered the deregulation of financial markets, the privatisation of parts of the public sector, the liberalisation of trade and the quest for ever-growing economic ‘efficiency’ through faster and faster ways of producing and consuming more and more goods and services.

…click on the above link to read the rest of the article…

Unaware and Misinformed–Exactly How They Like Us

January 13, 2017

UNAWARE AND MISINFORMED – EXACTLY HOW THEY LIKE US

I should start this out with a disclaimer. I worked as a financial planner and stock broker for 25 years and really didn’t begin to grasp the true mechanics of the financial system until nearly 10 years in. It took even longer for the magnitude of the crony capitalist corruption to sink in. I was indoctrinated by book and exam, scored extremely high in the various licensing and accreditation examinations (meaning I had fully swallowed my programming) and successfully parroted what I had learned.

It was only when the stink from the long dead skunk in the woodpile became overwhelming and could no longer be ignored did I begin to probe and seriously question both the financial ‘authorities’, the prevailing financial meme and myself. So when I come across others who are following the same path while blindfolded I am not casting stones. Instead, I am illustrating how we are all deeply immersed in many alternative reality memes even as I focus on this one in particular.

That said, let me begin.

I walked into a branch of ‘my’ bank the other day to make a deposit. It was mid afternoon and clearly a slow period for the bank because there were four tellers available and not another ‘customer’ in sight. Proving to all I was well trained and obedient, I followed the velvet and gold rope lined customer cattle chute and waited passively at the head of the ‘line’ to be summoned.

Thankfully the wait was not long.

The teller (Anna) greeted me pleasantly (obviously grateful for the distraction I afforded her) and asked how she could be of assistance. Stating my purpose, I plopped down my fake fiat and promptly engaged her in small talk. Having worked in the main branch of a bank as the resident financial planner (aka financial product salesman) for nearly ten years, I fully understand how monotonous the teller position can be at times.

 

…click on the above link to read the rest of the article…

Why The Puerto Rico Debt Crisis Is Such A Huge Threat To The U.S. Financial System

July 2, 2015

Why The Puerto Rico Debt Crisis Is Such A Huge Threat To The U.S. Financial System

Puerto Rico Map On A Globe - Photo by TUBSThe debt crisis in Puerto Rico could potentially cost financial institutions in the United States tens of billions of dollars in losses.  This week, Puerto Rico Governor Alejandro Garcia Padilla publicly announced that Puerto Rico’s  73 billion dollar debt is “not payable,” and a special adviser that was recently appointed to help straighten out the island’s finances said that it is “insolvent” and will totally run out of cash very shortly.  At this point, Puerto Rico’s debt is approximately 15 times larger than the per capita median debt of the 50 U.S. states.  Yes, the Greek debt crisis is larger, as Greece currently owes about $350 billion to the rest of the planet.  But only about $14 billion of that total is owed to U.S. financial institutions.  But with Puerto Rico, things are very different.  Just about the entire 73 billion dollar debt is owed to U.S. financial institutions, and this could potentially cause massive problems for some extremely leveraged Wall Street firms.

There is a reason why Puerto Rico is called “America’s Greece”.  In Puerto Rico today, more than 40 percent of the population is living in poverty, the unemployment rate is over 12 percent, and the economy of the small island nation has continually been in recession since 2006.

Yet all this time Puerto Rico has continued to pile up even more debt.  Finally, it has gotten to the point where all of this debt is simply unpayable…

Steven Rhodes, the retired U.S. bankruptcy judge who oversaw Detroit’s historic bankruptcy and has now been retained by Puerto Rico to help solve its problems, gave a blunt assessment on Monday.

Puerto Rico “urgently needs our help,” Rhodes said. “It can no longer pay its debts, it will soon run out of cash to operate, its residents and businesses will suffer,” he added.

…click on the above link to read the rest of the article…

Our Financial Future: Infinite Greed Meets a Funny Thing Called Karma

April 26, 2015

Our Financial Future: Infinite Greed Meets a Funny Thing Called Karma

All those angered by the mere question of the viability of this predatory pillaging in the name of capitalism are incapable of even admitting this cultural crisis exists.

Somewhere along the line, we lost the ability to distinguish between earning a profit and maximizing private gain by any means, i.e. Infinite Greed. If you insist on making this distinction now, you anger a lot of people, as it blows the capitalist cover of Infinite Greed.

If you make the distinction between earning a profit and maximizing private gain by any means, then you realize the status quo is neither sustainable nor good: it is unsustainable and evil. This angers everyone who has rationalized their investment in (and defense of) an evil system, because, well, it’s hard to feel all warm and fuzzy about your choices if the phony facade falls and the evil of the system you’ve defended is starkly revealed.The distinction between earning a profit and maximizing private gain by any means angers not just the few benefiting from the useful delusion that Infinite Greed is simply profit on overdrive; it seems to anger everyone who believes the Status Quo of burning mountains of coal to power towel warmers, sitting in traffic burning petrol two hours a day and central banks enriching the already wealthy is not just sustainable but gol-darned good.

Every enterprise must earn a profit to survive. A worker-owned collective must earn a profit, as it needs money to reinvest in the business and reward those who have invested their capital (human, social, financial, intellectual, etc.) in the enterprise.

…click on the above link to read the rest of the article…

 

 

The American Story Is A Mystery Only to Economists

March 14, 2015

The American Story Is A Mystery Only to Economists

I think I should accept that I will never in my life cease to be amazed at the capacity of the human being to spin a story to his/her own preferences, rather than take it simply for what it is. Your run of the mill journalist is even better at this than the average person – which may be why (s)he became a journalist in the first place -, and financial journalists are by far the best spinners among their peers. That’s what I was thinking when I saw another Bloomberg headline that appealed to my more base instincts, which I blame on the fact that it shows a blatant lack of any and all brain activity (well, other than spin, that is).

Here’s what Bloomberg’s Craig Torres and Michelle Jamrisko write: “American Mystery Story: Consumers Aren’t Spending Even In a Booming Job Market”. Yes, it is a great mystery to 95% of journalists and economists. Because they have never learned to even contemplate that perhaps people can be so deep in debt that they have nothing left to spend. Instead, their knowledge base states that if people don’t spend, they must be saving. Those are the sole two options. And so if the US government reports that 863,000 underpaid new waiters have been hired, these waiters have to go out and spend all that underpayment, they must consume. And if they don’t, that becomes The American Mystery Story.

For me, the mystery lies elsewhere. I’m wondering how it ever got to this. How did the capacity for critical thinking disappear from the field of economics? And from journalism?

…click on the above link to read the rest of the article…

 

 

Revolution, Part 2: The New Paradigm | Degrowth 2014

December 24, 2014

Revolution, Part 2: The New Paradigm | Degrowth 2014.

Worried about the shit hitting the fan on climate change and other major crises? Good. Because those crises prove that civilization is in the midst of a phase shift to new forms – and we’ve got the opportunity, right now, to ride the wave of five interlinked revolutions in information, food, energy, finance and ethics, to co-create a new way of being that works for everyone.

In part 1, I pointed to the leading edge work of University of Turin economist Prof Mauro Bonaiuti on the deeper roots of the ongoing crisis of capitalism in a wider environmental crisis, where the ‘endless growth’ model of unlimited material accumulation is increasingly breaching natural and environmental limits of the biosphere.

Bonaiuti’s message though, far from being all doom and gloom, captures how this phenomenon is symptomatic of a shift in the very nature of civilization itself as it transitions to new social and political forms, as the limits of the biosphere enforce human practices to adapt to the consequences of breaching these limits. This ‘phase shift’ means we are on the brink of a fundamental change in the way civilization works, one that could have both positive and negative outcomes – depending on the choices we make as a species.

Here, I round up what I believe to be the five most significant ‘revolutions’ that constitute the positive components of this phase shift, and whose inexorable evolution and proliferation offer profound opportunities for systemic transformation that benefits humanity, and the planet: information, energy, food, finance and ethics.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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