Saturday, May 17, 2014

How Empires Collapse

I recently found myself thinking about the decline or collapse of great empires and realized that it is often hard to predict when or how their demise will occur. Many analogies can be taken from this idea, the empire need not be great and timing is always hard to correctly gauge. The signs of decline may be everywhere but that does not guarantee the end is near. As the foundation crumbles away it is not uncommon for those in power to extend their rule by many tricks and changing the rules in order to gain a new lease on life.
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 griped 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 at the 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 build 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.

3 comments:

  1. I found a link to this article on zerohedge. Great article. I'm seeing more people waking up to the house of cards. I still can't believe there has not been any criminal charges, for banksters and politicians. Starting with the handful that were bribed to repeal Glass-Steagall.

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  2. Many people are completely unaware of what's going on around them. But a percentage always seem to see the forest thru the trees, right now people who are preparing have a gut level intuition, a third eye that something is off. The fact is no matter how well prepared, you are, or well connected, or rich, or poor and destitute when it finally goes fubar thier are no guarantees for anyone. The best anyone can say is that what preparations they have made May give them an edge. And conversely some people who would never enjoy the upsides to this life will rise to the top in a post fubar shtf world

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  3. It appears the recent election was a move by the people at a peaceful revolution of sorts. If things don't change and cronyism continues, then sadly more violent means may be seen as the only alternative.

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