23 April 2009


Welcome to a new kind of tension.
All across the alien nation.
Where everything isn't meant to be okay.

American Idiot - Green Day

Strauss & Howe described the Prophet/Idealist generation as being born during a High, spending its rising adult years during an Awakening, spending midlife during an Unraveling, and spending old age in a Crisis. Prophetic leaders have been cerebral and principled, summoners of human sacrifice, wagers of righteous wars. Early in life, few saw combat in uniform. Late in life, most prophets come to be revered as much for their words as for their deeds. The three previous crisis periods in U.S. history were dominated by the prophetic leadership of George Washington, Abraham Lincoln, and Franklin Roosevelt. George Bush has led us through the 1st half of this crisis. It is likely that Barack Obama will lead us through the 2nd half of the crisis. I don’t think George Bush will be revered for being cerebral or making inspiring speeches. He did wage a righteous war against terrorism. Barack Obama is cerebral and principled. He is waging a righteous war in Afghanistan, though he has never seen combat. He is already known for his inspiring speeches. Will he rise to the level of Lincoln?

George Bush and Barack Obama are both Baby Boomers. The oldest boomer is 63, the youngest 45. Boomers occupy the leadership positions in government, corporations, military, and educational institutions. Boomer leaders are cocky, aggressive, and quoting Doug Casey,

“quite willing to burn down the barn in order to destroy whatever rats they see.” George Bush was sure there was WMD in Iraq. He was sure that cutting taxes, sending out rebate checks, and letting banks regulate themselves was the path to prosperity. Hank Paulson and Ben Bernanke were sure that TARP would save our financial system from collapse. Barack Obama was sure that if we didn’t pass his bloated stimulus bill, catastrophe awaited the country. Baby Boom leaders are always sure and often wrong. The masses are drawn to leaders who are sure of themselves. They want to believe that a wise man will lead them to the Promised Land. They won’t realize that he is leading them to hell, until it is too late.

Civil Unrest – The Great Unraveling

Overthrow the effigy
The vast majority
Burning down the foreman of control

Silence is the enemy
Against your urgency
So rally up the demons of your soul

Know Your Enemy – Green Day

Strauss & Howe explained their view of how America was feeling in 1997. They were dead on. We are a country that has been rotting from within for decades.

America feels like it’s unraveling. Though we live in an era of relative peace and comfort, we have settled into a mood of pessimism about the long-term future, fearful that our superpower nation is somehow rotting from within. The America of today feels worse, in its fundamentals, than the one many of us remember from youth, a society presided over by those of supposedly lesser consciousness. We yearn for civic character but satisfy ourselves with symbolic gestures and celebrity circuses. We perceive no greatness in our leaders, a new meanness in ourselves. Each new election brings a new jolt, its aftermath a new disappointment.

Many Americans know we are on the wrong track but are so distracted by the circus like distractions of every day life, they choose not to think about it. It is likely that the 123 million eligible voters who chose not to vote in the 2008 Presidential election don’t even realize the country is on the wrong track. The sedated masses were easy to manipulate when unemployment was 4%. There are now 6 million more people unemployed today than just 16 months ago in November 2007. Another 2 to 3 million will lose their jobs in 2009. The government doesn’t count another 5 to 10 million people who are classified as out of the workforce, but would like to work. This means there will be 20 to 25 million people out of work by the end of this year. Unemployed people have a propensity to be angry. In the last few months there have been several mass murders committed by angry unemployed men. As the economic “solutions” rolled out by politicians and Federal Reserve bureaucrats lead to an inflationary depression similar to the Weimer Republic of the early 1930’s, civil unrest will rear its ugly head.

Doug Casey describes the likely scenario:

People believe they have little to lose, they’re eager to hang those they believe responsible for their problems, and they’ll listen to radical or violent proposals. We’re now just entering what will likely be the worst economic trough since the Industrial Revolution. A rioter is typically an angry person looking for vengeance because he blames someone else for his problem. So far, rioters seem to be directing their attention at governments. Correct target, of course, but they don’t have the rationale quite right. They’re not angry because governments inflated the currency, promoted fractional reserve banking, and nurtured all the cockamamie socialist programs that caused this crisis. Not at all; they rather liked all that. They’re angry only because their governments haven’t adequately protected them from the consequences of what they did. So as conditions worsen, we can expect governments worldwide to pull out absolutely all the stops to show they’re “doing something.” And round up scapegoats to satisfy the mob and divert anger from themselves. I fully expect civil unrest to spread everywhere, simply because the depression will spread everywhere. It will be worst in places that have been most overextended, most debt leveraged, most urban, and have the largest numbers of unemployed workers -- the U.S., Europe, and China.

The civil unrest is most likely to erupt among Hispanics and African Americans. The unemployment rate of Hispanics is 11.4% versus 5.0% in November 2007. It is doubtless far worse, as many Hispanics worked “under the table” in the housing industry. The unemployment rate of African Americans is 13.3%, the highest since 1993, and up from an all-time low of 7.0% in 2000. The urban areas of the United States are a powder keg, with automatic weapons available to anyone. Policemen are being slaughtered at a record pace. Mexico is on the verge of becoming a failed state. Drug lords are running the country. Its oil fields are in rapid decline and it will no longer be an exporter of oil within 5 years. The Mexican government depends on oil for 40% of its tax revenues. The collapse of Mexico’s government, extreme power of murderous drug lords, and worldwide depression will drive millions of poor towards the U.S. border. The anti-immigrant feelings in the U.S. continue to grow as more white Americans lose their jobs. This is an explosive combination that will eventually require military and National Guard intervention.

There are two other hot button issues which will increase the anxiety in this country. Guns and ammo are selling like hotcakes. The combination of apprehension that Obama and his Democratic majority will put restrictions on gun ownership and the severe economic downturn has led to an exorbitant increase in gun sales. Ruger has a $48 million backlog of guns on order. Many citizens in the Western states live by the motto: You can have my gun when you pry it from my cold, dead fingers. Any effort by the Obama administration to restrict gun ownership will be met with major resistance. The Tax Day Tea Parties revealed the other hot button issue for many Americans. When the Bush tax cuts expire in 2010 and Obama institutes his Cap & Trade energy tax, the economy will receive a double whammy. At that point the failed economic policies and higher taxes will lead to consternation and resentment throughout the land. The unending economic turmoil throughout the world will result in protests and anger in many countries. The more disturbing issue is how politicians will try to divert the attention of the masses through the use of an external threat.

War – Fingers of Instability

The insurgency will rise
When the bloods been sacrificed
Don't be blinded by the lies
In your eyes

Violence is an energy
From here to eternity
Violence is an energy
Silence is the enemy
So gimme gimme revolution

Know Your Enemy – Green Day

Back in 2006 John Mauldin wrote an article titled Fingers of Instability. It was based on a book written by Mark Buchanan called Ubiquity, Why Catastrophes Happen. It examines chaos theory, complexity theory, and critical states. Physicists, using a computer model examined what takes place when sand is continuously piled up grain by grain. They were endeavoring to understand what makes the pile ultimately collapse. Buchanan described the experiment:

"Imagine peering down on the pile from above, and coloring it in according to its steepness. Where it is relatively flat and stable, color it green; where steep and, in avalanche terms, 'ready to go,' color it red. What do you see? They found that at the outset the pile looked mostly green, but that, as the pile grew, the green became infiltrated with ever more red. With more grains, the scattering of red danger spots grew until a dense skeleton of instability ran through the pile. Here then was a clue to its peculiar behavior: a grain falling on a red spot can, by domino-like action, cause sliding at other nearby red spots. If the red network was sparse, and all trouble spots were well isolated one from the other, then a single grain could have only limited repercussions. But when the red spots come to riddle the pile, the consequences of the next grain become fiendishly unpredictable. It might trigger only a few tumblings, or it might instead set off a cataclysmic chain reaction involving millions. The sand pile seemed to have configured itself into a hypersensitive and peculiarly unstable condition in which the next falling grain could trigger a response of any size whatsoever."

"In this simplified setting of the sand pile, the power law also points to something else: the surprising conclusion that even the greatest of events have no special or exceptional causes. After all, every avalanche large or small starts out the same way, when a single grain falls and makes the pile just slightly too steep at one point. What makes one avalanche much larger than another has nothing to do with its original cause, and nothing to do with some special situation in the pile just before it starts. Rather, it has to do with the perpetually unstable organization of the critical state, which makes it always possible for the next grain to trigger an avalanche of any size."

You may be wondering what sand has to do with war. The relevance is that a small seemingly minor incident could lead to a large world war.....

read the rest

No comments: