All ‘crises’ start somewhere and the current crisis has its roots in (deeply misguided) globalization. In case anyone was wondering, it’s not a coincidence that the crisis is ‘global’.
The idea was ‘sold’ to the governments of the world as a vehicle that would increase prosperity by eliminating ‘redundancy’…when what really happened was competition was eliminated, so the ‘last man standing’ most certainly prospered.
As has been learned across the centuries, there is EXTREME danger in ‘sole sourcing’ pretty much anything. Yet the greedy fucks behind globalization have so aggressively eliminated ‘redundancy’ around the world that unemployment has become a universal crisis.
Now, as Stoneleigh points out, we are left with supply chains so fragile that much of the planet will grind to a halt almost instantly if only a few of those lines snap…because there is no back up!
Globalization
[The following is but a snippet from a longer piece that can be found at the link…]
[Stoneleigh:] Where countries had been inclined towards more expensive self-sufficiency,[‘redundancy’ is only ‘expensive’ if you allow others to manipulate the value of your currency…otherwise the ‘cost’ is identical!] market forces have often made this approach untenable, as large cost differences can make countries or industries uncompetitive. Local production has been progressively out-sourced as a result. [And wherever this has occurred it is due to currency manipulation and nothing else! The ‘cheaper there’, wherever it is found, is a pure ‘legal construct’, and act of fiction!]
By 'better off', economists mean that goods will be cheaper for all, thanks to global wage arbitrage and economies of scale. Globalization has indeed delivered falling prices for many consumer goods, particularly electronics. In an era of massive credit expansion (effectively inflation), such as we have lived through for decades, one would normally have expected prices to rise, as a lagging indicator of money supply expansion, but prices do not always follow money supply changes where other major complicating factors exist. [Especially when/where currency manipulation is involved!]
In recent years, the major complicating factors have been the ability to produce goods in places where wages are exceptionally low, the ability to transport those goods to consumer markets extremely cheaply and ready access to letters of credit. [Since all currencies are legal fictions, the bottom line price of anything you can imagine is …wait for it…zero. So, what is the ‘race to the bottom really about? It’s about ‘I’ve got mine, fuck you!’(Read: shut up and get back to work.)]
For nominal prices (unadjusted for changes in the money supply) to fall during an inflationary period, real (inflation adjusted) prices must be going through the floor. This has been the effect of trade as we have known it, and it is all many of us have known. What we are not generally aware of is the vulnerability of the global trade system, due to the fragility of the critical factors underpinning it. [This is a piss poor job of explaining how globalization increases ‘supply’ while radically cutting ‘demand’, forcing prices down. As formerly productive members of society are literally ‘eliminated’ from the labor pool, supply overwhelms demand. Sadly, this is a prime example of ‘Stupid is as Stupid does.’ Worse, these idiots are in charge, making the whole situation that much more desperate. What do you suppose the odds are that these imbeciles will admit their, er, ‘mistake’ before civilization unravels totally? You got that right, ain’t happening!]
By producing goods, particularly essential goods, in distant locations, we [they, ‘we’ have no choice in this]] create long and potentially precarious supply lines. While relative stability reigns, this vulnerability does not cause trouble and we enjoy cheap and plentiful goods. However, if [when, it’s only a matter of time] these supply lines are disrupted, critical shortages could result. [replace ‘could’ with ‘will’, there’s nothing ‘ambiguous’ about these outcomes.] In a very complex just-in-time system, this may not take very long at all. Such a system is very brittle, as it has almost no redundancy, and therefore almost no resilience. When Jim Kunstler refers to efficiency as "the straightest path to hell", it is this brittleness he is referring to. [How sad is it that it is this same ‘brittleness’ that makes globalization so profitable for the few who are fucked up enough to risk it?]
The most ephemeral critical factor for trade is the availability of letters of credit. These became scarce during the first phase of the credit crunch in 2008, and the result was goods stuck in port even though there was robust demand for them elsewhere. Goods simply do not move without letters of credit, and these can dry up extremely quickly as a systemic loss of confidence results in a systemic loss of liquidity. In a very real way, confidence IS liquidity.
I sincerely hope nobody misses the ‘significance’ of the ‘fragility’ wrought by excessive greed. Not for nothing the engineers of our current disaster planned this as an ‘end game’. Hard to tell if the misguided morons think a pissed off Christ really is about to pick up where he left off or if they believe creating an ‘epic failure’ of ‘biblical proportions’ will cover their tracks?
Like many ‘historical events’ this has the fingerprints of man’s willful mismanagement all over it…so naturally it will be blamed on God. (For, once again, failing to prevent it.)
Just as the idea/eventuality of immortality would (likely catastrophically) ‘Warp your mind’, the ‘imaginary’ effect of wealth is also capable of twisting one’s ‘moral compass’ into unimaginable directions…
Money is a ‘wonderful’, albeit, extremely dangerous human invention. If mismanaged, it can cause ‘irreparable harm’. We are about to witness just how much ‘karmic retribution’ the mismanagement of the resources of the planet can cause.
This is going to be much more than just ‘bad vibes’, it’s going to be biblical, because only man can fuck up this royally!
Thanks for letting me inside your head,
Gegner
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