Post by jeffolie on Jul 25, 2010 13:28:26 GMT -6
Here is a doom site I like to visit:
theautomaticearth.blogspot.com/
Their July 22 issue offers their "...the big picture in one place. Since it has been exactly one year since we issued our first primer guide, and several new primers have been added in the meantime, it seems an opportune moment to offer an updated distillation of our worldview...."
In 2009 they wrote:
"Our predictions for the future in a nutshell are available in point form in 40 Ways to Lose Your Future . "
========================================================
People have been asking how we see the future unfold. In case you wonder what we stand for, much of our view of what's to come can be found in the primers on the right-hand side bar. Here is an additional brief summary (in no particular order and not meant to be exhaustive) of the ground we have consistently covered here at TAE over the last year and a half, and before that elsewhere.
Deflation is inevitable due to Ponzi dynamics (see From the Top of the Great Pyramid)
The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
Cash will be king for a long time
Printing one's way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
Debt will become a millstone around people's necks and bankruptcy will no longer be possible at some point
In the future the consequences of unpayable debt could include indentured servitude, debtor's prison or being drummed into the military
Early withdrawls from pension plans will be prevented and almost all pension plans will eventually default
We will see a systemic banking crisis that will result in bank runs and the loss of savings
Prices will fall across the board as purchasing power collapses
Real estate prices are likely to fall by at least 90% on average (with local variation)
The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
Real interest rates will be even higher (the nominal rate minus negative inflation)
This will cause a tsunami of debt default which is highly deflationary
Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
Suburbia is a trap due to its dependence on these services and cheap energy for transport
People with essentially no purchasing power will be living in a pay-as-you-go world
Modern healthcare will be largely unavailable and informal care will generally be very basic
Universities will go out of business as no one will be able to afford to attend
Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, ie inflation)
Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won't be over
Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
Export markets will collapse with global trade and exporting countries will be hit very hard
Herding behaviour is the foundation of markets
The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
A sense of common humanity will be lost as foreigners and those who are different are demonized
There will be war in the labour markets as unempoyment skyrockets and wages and benefits are slashed
We are headed for resource wars, which will result in much resource and infrastructure destruction
Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
Repressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
The rule of law will replaced by the politics of the personal and an economy of favours (ie endemic corruption)
theautomaticearth.blogspot.com/2009/06/june-17-2009-40-ways-to-lose-your.html
theautomaticearth.blogspot.com/
Their July 22 issue offers their "...the big picture in one place. Since it has been exactly one year since we issued our first primer guide, and several new primers have been added in the meantime, it seems an opportune moment to offer an updated distillation of our worldview...."
In 2009 they wrote:
"Our predictions for the future in a nutshell are available in point form in 40 Ways to Lose Your Future . "
========================================================
People have been asking how we see the future unfold. In case you wonder what we stand for, much of our view of what's to come can be found in the primers on the right-hand side bar. Here is an additional brief summary (in no particular order and not meant to be exhaustive) of the ground we have consistently covered here at TAE over the last year and a half, and before that elsewhere.
Deflation is inevitable due to Ponzi dynamics (see From the Top of the Great Pyramid)
The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
Cash will be king for a long time
Printing one's way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
Debt will become a millstone around people's necks and bankruptcy will no longer be possible at some point
In the future the consequences of unpayable debt could include indentured servitude, debtor's prison or being drummed into the military
Early withdrawls from pension plans will be prevented and almost all pension plans will eventually default
We will see a systemic banking crisis that will result in bank runs and the loss of savings
Prices will fall across the board as purchasing power collapses
Real estate prices are likely to fall by at least 90% on average (with local variation)
The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
Real interest rates will be even higher (the nominal rate minus negative inflation)
This will cause a tsunami of debt default which is highly deflationary
Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
Suburbia is a trap due to its dependence on these services and cheap energy for transport
People with essentially no purchasing power will be living in a pay-as-you-go world
Modern healthcare will be largely unavailable and informal care will generally be very basic
Universities will go out of business as no one will be able to afford to attend
Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, ie inflation)
Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won't be over
Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
Export markets will collapse with global trade and exporting countries will be hit very hard
Herding behaviour is the foundation of markets
The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
A sense of common humanity will be lost as foreigners and those who are different are demonized
There will be war in the labour markets as unempoyment skyrockets and wages and benefits are slashed
We are headed for resource wars, which will result in much resource and infrastructure destruction
Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
Repressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
The rule of law will replaced by the politics of the personal and an economy of favours (ie endemic corruption)
theautomaticearth.blogspot.com/2009/06/june-17-2009-40-ways-to-lose-your.html