|Empires Often Die From Corruption And Weakness Within|
Decline and collapse can be sudden or slow. In our modern world with communication so important, I suspect that the process is generally accelerated. Sometimes a system morphs or evolves towards its end and in other cases, a single event can act as the catalyst to bring a system to its knees. Looking back to the economic crisis that gripped the world in 2008 is an excellent example. Central Banks across the world joined with politicians to pull rabbits out of their hats and used unprecedented actions to halt collapse of the system.
Now for the more interesting question, did they only delay the last scene of a bad play, is this all an extend and pretend scenario? That may depend on other actions taken over the last few years to repair and set right many of the problems and issues that plagued us. We were given time to change our evil ways such as spending money we didn't have and dealing with growing debt loads and unfunded promises, but in truth, we have failed to address the many structural problems before us. We printed money to build a new future but unfortunately looking back we have little to show for how it was spent.
Today a big topic is the huge growth in inequality. Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching. I contend this goes hand in hand with the massive growth in crony capitalism and corruption. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world, we have found it impossible to watch all the moving parts.
What might be called the "Deep State" definitely exists and it often works in plain sight and not how it is depicted in the movies. It is not a complex conspiracy but the gut of a system laced with ever growing corruption and relaxed morals. In reality, human beings are generally too incompetent, lazy and inept to carry out schemes on a grand scale. People are bad at keeping secrets and insider knowledge is almost always passed around, even in secretive organizations, often recklessly so. Doling out secrets and insider information confers status, tactical advantage, and sometimes even financial gain.
Corruption and crony capitalism are cancers on society that grow if not constantly treated. Empires and successful endeavors are built on strength and a sound financial foundation. This can erode very quickly in a fast changing world. Debt is an often no more than a glorified IOU and we must try to remember that bills can go unpaid and promises left unfulfilled. Faith is the glue that holds this all together. Most likely the economy won't fall apart or collapse today and when it does a new economy will rise from the ashes.
What happens when the momentum ends? The whole concept of economic growth is based on an ever-growing trend of year over year increased production. We must remember the influx of monetary stimulus from QE and massive government deficit spending has created the illusion of more pent-up demand then exist or can be substantiated. This discounts the quality of economic growth and results in an elevated baseline for comparing year on year growth, in short, we have to move forward faster next year just to keep growing.
When looking through the eyes of modern monetary theory things get fuzzy. The denial of inflation and worries of deflation still exist even as ever larger amounts of money are being printed. These "interesting times" play havoc with the value of things and what they are worth. Like some of the cruel games children play you don't want to find yourself without a chair or holding the "hot potato" when the game ends. The bottom-line is the game will end and start anew, but questions remain as to when and what the new rules will be.
Footnote; This post dovetails with many of my recent writings. Other related articles may be found in my blog archive, thanks for reading, your comments are encouraged.