Tuesday, May 31, 2011

The US and the Five Stages of Collapse

Interview on WMNF FM, Tampa, Florida

Some excerpts:
First you have financial collapse, which is basically the volume of debt that has to be taken on in order for the economy to continue functioning, cannot continue. We're seeing that right now in Greece, we're probably going to see that in Japan, we're definitely at a point now in the United States where even if you raised the income tax to 100 percent, there's absolutely no way of covering the liabilities of the U.S. federal government. So, we're at that point now but the workout of the financial collapse is not all quite there. We don't quite have a worthless currency but that's in the works.

That, of course, is followed by commercial collapse especially in a country like the United States that imports two thirds of its oil. A lot of that is on credit and if a little bit of that oil goes missing then the economy starts to fall apart because nothing moves unless you burn oil in the United States and, of course, a lot of goods that are sold everywhere are imported again, on credit. And then commercial collapse is generally followed by political collapse because the Congress no longer has the ability to spend money in the fashion to which they have become accustomed. Governments at every level start failing. We're seeing the beginnings of that where fire and police departments around the country are being cut. Right now there's a big fight over the retirement of retired municipal workers. Retirements are, basically, being looted in order to paper over these giant gaping holes in the finance scheme.
Then the last two stages are I think generally avoidable in most places which is social and cultural collapse. Unfortunately to my thinking these two stages have largely run their course in many places in the United States where people really don't know their neighbors and also they don't really do very much for themselves. They expect to be fed at fast food establishments, they don't know how to cook from scratch, and things like that. So, those are the five stages and a lot of people have found this sort of way of thinking useful in terms of understanding what's happening.
What do you see the United States looking like for Americans in the next 5 to 10 to 20 years?
I think the country will be unrecognizable in 10 years, I don't know about 5, but I don't think it will look like a country in 10 years. I think it will be largely dismembered by it's creditors.
Do you think that we're going to be going quickly or slowly into these different stages of collapse?
I think certain stages like the onset of fuel, transportation, fuel shortages will be very sudden. American society tends to be very fragile. People tend to bring shotguns and baseball bats to gas stations and then every thing goes down hill from there. I expect certain parts of the country to go through this cataclysm where suddenly everything that they depend on, which is basically their car, no longer works and everybody's stranded and very angry. It would be a lot of mayhem. We've already seen that, for instance, during Hurricane Katrina and afterward because of all the refinery problems the '..' pipeline that goes up from the Gulf, I think it ends up in New Jersey somewhere, it couldn't be filled so gas stations in places like North Carolina ran dry and I've heard from people in that area that basically civilization ceased to exist. And then, when gasoline supplies were restored civilizaton sort of came back. That should be the pattern in a lot of places in this country.
There's been some limited coverage of peak oil in the press recently, do you think it's enough to raise the level of awareness for people in this country about the things that you predict are going to happen?
Unfortunately a lot of people simply cannot be reached because they refuse to hear what we have to say. It's not that they can't understand it, it's that they refuse to listen. The media, in general, in the United States makes it very easy because there is this fictional reality that they perpetuate and foist on people that contradicts what we're saying. We're saying that 'this will not continue for very much longer, people'. And then the media says that 'everything is fine, everything is normal', and even the President is now in the game where he says completely nonsensical things like drilling in Alaska for oil will actually make a difference. He recently said that. It contradicts what his own government says about the amount of oil left there. Some of these just fictional feel good messages just saturating the media and so the reality based people really don't stand a chance.


DinkyTwist said...

Hey Dmitry - We love your work down here in Australia. One of the biggest challenges I face is supporting my closest friends to get informed and on the same page as the rest of our Collapse Team. I lent both copies of your Reinventing Collapse books to 2 of our "seniors" 88 and 86 year olds. The result was fantastic. One put his family home of 20 years on the market this week and the other is about to. I hope sales are going well Dmitry. Your message is very timely and persuasive. Cheers Greg...

Sixbears said...

We are used to thinking of the US as a nation. Take away transportation fuels, and we become a very loose collection of regions, none with everything it needs.

That being said, some places will do better than others. It may have more to do with the people and attitudes than the actual resources available.

Jackie said...

Your personal experience in USSR is proving invaluable. The person who most "gets it" is my mother-in-law who fled Danzig during WWII as the Nazi's approached from one side.....and the Russians from the other. She does not laugh when I talk about keeping wealth in bullion. They were expat Swiss who were prohibited from repatriating money back to Switzerland through the banking system-- so her mom mailed 1-kg packages of cash back to Switzerland!!

Everyone else who never had such painful experiences thinks I am overly dramatic. They will learn the hard way.

StephenH said...

I think we will have to do several things fast if this is true:

1) Free housing and land from debt trap liens. I think the big banks failing would be less of a consequence than social unrest caused by mass homelessness if the corporate world fails and unemployment soars. Also, if oil depletes, there might not be enough vehicles to enforce a mass lock-out.

2) We need to work on putting farms and factories back in our cities again and reverse the conversion to big box retail. Ultimately our food and goods we have will need to be produced close to home again as opposed to from the cheap labor countries.

3) We will need to put quality of life over GDP as a national priority and focus on main street as a priority as opposed to wall street.

4) We need to rebuild our railroad system. Trains use far less energy than cars or planes and extend lines via light rail to higher income rent districts rather than focus on the slums.

5) People need to get to know their neighbors and build community again.

Rob said...

Changes are certainly coming. Probably the best case scenario is that the rise in oil prices happens gradually enough, say 50 cents a year avg. for a gallon of gasoline, for Americans to adopt new habits, like car-pooling and driving less. Assuming of course availability is not an issue (gulp!). And of course I know I'm not even touching on the other problems that have been talked about here and elsewhere - jobs situation, financial system stresses, resource prices, ... - just simple ole affordable and available gasoline (i.e. transportation fuel).

Dinky - question for you. How in the world is it that a couple of people in their late eighties are looking to sell their homes? I think that's neat, as I'm looking to do the same here in the States, wish of course I had decided that about six months ago. I'm just suprised at that age that they're thinking of such a major change. Why not just stay where they are; where are they thinking of going?

Bukko Boomeranger said...

Good onya for appearing on WMNF, Kollapsnik. I'm not sure how much you know about the station, since you're a long way away from it, but during the 14 years I lived in Florida in the 1980s-1990s, 'MNF was my main source of radio entertainment.

The station operates on principles that I think you would approve of. It gets its money from donations from its listeners and local businesses that support it. (There used to be a subsidy paid to the station from the state government during the 90s, but I doubt that has survived the Republikkkanization of Florida.) WMNF doesn't air commercials, doesn't have its music choices dictated by some corporate playmaster, and it focuses a lot of news attention on local issues. There are other non-commercial radio stations in the U.S., of course, but aside from WMNF and KPFA in Berkeley, Cal., they're mostly supported by universities, which means the .gov is their ultimate owner.

It's a shame there are not more stations like WMNF. It brought people together, not just around their radios, but in the real world. I went to a lot of concerts sponsored by the station, answered phones during their pledge drives, and every year WMNF throws a music festival called "Tropical Heatwave" that brings in bands ranging from Caribbean to punk to hip-hop and country. It was a great way to connect with other folks that like whatever weird niche music YOU like! In these days of corpo-fascism, WMNF is a counterweight to the mass media manipulation.

OTOH, there are those who say that it's WMNF's fault that George Weasel Bush was selected president in 2000. That's because the station was a big promoter of Ralph Nader's presidential bid. I remember attending a large rally put together (in part) by the station where Nader, Michael Moore and other rabble-rousers spoke about the premise that there was not a dime's worth of difference between the R and D parties. The theory is that WMNF shifted so many votes TO Nader and AWAY from Gore that it cost Al the state of Florida's electoral votes. I think that Jaib! Bush! and Katherine Harris would have stolen it anyway, but WMNF might have made it easier.

P.S. Your name came up at an event I was at last night. "Stoneleigh" of The Automatic Earth blog gave a presentation up here. After her talk, some of the 75-or-so people were standing around discussing other notweorthy bloggers who are on the same page as Stoneleigh, and you were one of the folks getting kudos. Not only from me, either!

Jeff Snyder said...

In light of the shortcomings of nuclear power plant engineering and planning made apparent by Fukushima, I fear that most of the US east of the Mississippi and Europe will be a total write-off -- absolutely uninhabitable. There's 30 years or so of spent fuel rods and no one is implementing plans for safe storage. If you've never done it, take a look at the locations of nuclear power plants in the US and Europe. It's shocking that Fukushima is not a wake up call for Americans. The disappearance of this story from mainstream news indicates just how deep and pervasive the denial - and unwillingness to hear - that Dimitry speaks of really is.

lemmiwinks said...

DinkyTwist, it's great to have liquid assets, but if your 88 and 86 year old friends own their houses and are otherwise debt free then I'm not sure why they'd sell. Provided there's no mortgage, the houses are not in need of major repairs and they've got no other debts they should be sitting pretty.

Get 'em out in the backyard veggie patch (if they don't already have one) and maybe even a couple of chickens if they've got the space.

Mind you, they'll be selling near the top so there is that to consider, provided they can find a greater fool. But if they're looking to buy again in the medium term, they'll be buying near the top.

Peter said...

Hello Dmitry, I wanted to send along a word of thanks for your clear and insightful comments. Like DinkyTwist I am in Australia. Here we are similarly afflicted with a strange denial about what is coming. People can't argue that they don't know about it. There have been science docos about it, comments in online newspaper forums. Even my city of Brisbane developed a Peak Oil plan (pretty lame mind you). But there is almost an averted gaze like a monstrous tidal wave is about to engulf everything but all the people just want to look somewhere else. I guess they don't like getting splashed in the face.

I do find some people are more aware, many in my own family. But I don't think they realise the magnitude of what is coming. Which is why I usually put the question to them: what will you do when petrol is too expensive to harvest and transport food to the cities? Something we all have to think about.

I was recently reading The Story of St Severinus, a saint in the late 5th century Rome. Fascinating reading between the lines to see a civilisation falling and the almost accidental fate of towns. Some became fortified into 'castles' others were destroyed. Chaotic. But the greatest personal attributes that made a difference were friendship, allies, compassion ... very surprising.

Avi said...

One day, 5 gallon buckets will be more precious than gold!

LewisLucanBooks said...

@ Pete - You might find this interesting. In 416, after the sack of Rome, a fellow named Rutilius Claudius Namatianus decided to sail home to Gaul. As the roads were so bad.


Here is the Loeb version. Lots of footnotes, explinations and maps.


Jeff said...

Creditors are easy to deal with; you default. America is expert at that, we defaulted on the gold standard twice in the last century. Hyperinflation is the next form of default, coming soon. Russia also defaulted on its debts, as I remember. Everybody's doing it.

Anicca said...

Reality is what the majority of people believe. At the present moment, most people believe that tomorrow will be a continuation of today. As long as there are no major shocks, like a bunch of gas stations running out of gas, or a few scattered riots (more than can be handled by the police force), no problem. As long as the economy is recovering, fuel prices go up and down, the CPI is 3%, unemployment is under 10%, no problem. We have the media to thank for what little stability we have. What do you think would happen if "The USA is broke - they can never pay their debts" made the headlines of all the major news media? All of a sudden your neighbors will realize "I better sell my stocks, withdraw my savings and run up my credit cards, so I can stock up on guns and food.

So how many people do you want to convince the "end is near, collapse is around the corner"?

Terrace said...

There is also the fantasy that collapse, when it comes, is going to happen to everyone at the same time, in the same way. Ask any American about collapse who has lost their job in the past three years and can't get back to work, and they could probably tell you a lot. Ask anyone who's lived in a Rust Belt city for the last 30 years. But collapse isn't like a meteor hitting the planet. ABC News is not going to cover it. When collapse is finally complete, Diane Sawyer will still be sitting in her studio wondering what that pounding sound is outside, and why she smells boiling tar in the air, and if she can scrounge up a talking head to discuss it, his theory will be completely wrong.

Peter said...

@LewisLucanBooks: thanks for the link. I've bookmarked it to read later but on first skim looks very interesting.

@Annica: I think that if the notion of collapse was more widely known then bad things would indeed happen. However, I would expect that renewable/alternative energy sources would be a bipartisan issue in most countries. Hide the truth from the people but work feverishly to switch. What we actually see seems to be high level of denial or paralysis. Raising awareness might might well trigger a collapse but it could also reduce it's severity. At the moment we are making no attempt to mitigate the foreseen effects.

Anonymous said...

What we actually see seems to be high level of denial or paralysis.

I would suggest it's more consciously manipulative. The media buffer Anicca referenced above, it's there in order to give the powerful more time to loot what's left.

This is an end-stage looting we're seeing in America. Those doing the looting know fully well that they should (if they recognized such imperatives in their worldview) be working to transition into a post-petroleum world. But what are they doing? Fighting over the last bits of petroleum, in the most aggressive manner.

They fear losing power and they see their power is oil-dependent and they see their power as rooted in the monetary - material -political advantages they've accumulated thanks to oil.

They're trying to build themselves a huge wealth buffer. And because they're not stupid, they'll see that money itself isn't durable and therefore monetary wealth alone isn't durable, so they'll get arms and armed goons to align with them to protect them.

Sound familiar?

DeVaul said...

There is a huge difference between the Soviet Union defaulting and America defaulting. When the USSR defaulted, there were not huge stockpiles of rubles sitting in hundreds of central banks all over the world. The same cannot be said about America. It WILL be different.

China is in a race against time. It needs to spend its dollars as soon as possible because our crazy politicians want to default now, thinking that this will harm everyone else and not them. (We, the People, don't count. We WILL be harmed, but the wealthy are also delusional and will fall with the rest of us.)

Today, I saw a headline that stated the US owes 63 trillion in unfunded liabilities, or 400 grand per family. This was at the top of the front page in bold letters. It is the equivalent of announcing our imminent bankruptcy to the American people.

It could be a gambit by the rich to cajole ordinary Americans into eliminating Social Security, Medicare, Medicaid, and everything else except the Pentagon, but like everything else that comes out of DC these days, it will probably backfire in unexpected ways.

The rich live in their own world, and our current Sun King is out on the links using the quiet solitude to reheare for his speaking tour after he leaves office.

I hope he knows Mandarin.

Jeff said...


The fact that a huge amount of american debt is owned by foreigners only makes default more appealing. Foreign bagholders take the pain, and they don't vote. This is exactly what Russia did when it defaulted on its debt (held by foreigners).

Cheap junk from China might become more expensive, but if kollapsnik is correct we won't be importing that stuff much longer anyway.