I recommend the following books from Amazon:
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Life After the Oil Crash
Deal With Reality or Reality Will Deal With You
Editor's Note: Above is linked a new mega-article from Dmitry Orlov whose book "Reinventing Collapse" was based on two series of articles - one originally written for FTW in 2005 and another originally written for LATOC in 2006 - both of which are archived at LATOC for free at the following links:
The series originally written for FTW:
Dmitry's new article "Definancialisation, Deglobalisation, and Relocalisation" is, as you might expect, simply brilliant and it's hard to pick out a few particularly noteworthy excerpts since there are so many excellent parts. The ones that stick out in my mind the most after my initial reading are:
A) Just how high can the price of oil go before collapse happens?
I recommend the following books from Amazon:
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We're discussing Dmitry's new post over at the LATOC Forum if you'd like to talk about it further. Dmitry's excellent book "Reinventing Collapse" is now available at a deep discount via Amazon:
The rest of the day's news is as follows:
. . . there remains concern that the deeper California's woes get, the moreit will delay the potential U.S. recovery . . . The worry is that these effortsto balance California's state budget would work in a direct cross-purposewith the $787 billion U.S. stimulus package . . . Though few experts thinkCalifornia will default on its debt — following the example New York City setin 1975 and Cleveland in 1978 — the mere possibility is troubling for thecredit markets. "If California truly defaults, I am sure it will shake the faithof bondholders and noteholders in the overall municipal finance system,"says Dan Boyd, senior fellow at the Rockefeller Institute of Government. Using language that could further spook bond investors, S&P said, "Althoughwe continue to believe the state retains a fundamental capacity to meetits debt service, insufficient or untimely adoption of budget reforms serveto increase the risk of missed payments." The Legislature and Gov. ArnoldSchwarzenegger are facing a $24.3-billion budget shortfall, and ControllerJohn Chiang has warned that the state could run short of cash beginningJuly 28,, one month into fiscal 2010. The Obama administration repeatedTuesday that it wouldn't offer special financial assistance to California . . .Top state officials have gone hat in hand to the administration, armed withdire warnings of a fast-approaching "fiscal meltdown" caused by a budgetshortfall. Concern has grown inside the White House in recent weeks asCalifornia's fiscal condition has worsened . . . But federal officials areworried that a bailout of California would set off a cascade of demandsfrom other states. With an economy larger than Canada's or Brazil's, thestate is too big to fail, California officials are urging federal authorities . . .Unemployment is only going to get worse," wrote Nickelsburg, who thinksthe jobless rate could remain in the double digits until the end of 2011."The stalled California economy is simply not producing the jobs required."The UCLA forecast cited two factors that contribute to the state's higherjobless rate. California had a bigger housing bubble than most of the nationand a correspondingly bigger bust in construction and related employment.The state is also a gateway for imports from Asia and the drop in spendinghas hurt shipping, warehousing and other import-servicing industries . . .Editor's Note: we're discussing this article at the LATOC Forum if you're interested in knowing more:
This week marks the end of the dollar's reign as the world's reservecurrency. It marks the start of a terrible period of economic and politicaldecline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will bevery, very painful . . . the rest of the world knows we are bankrupt. Andthese nations are damned if they are going to continue to prop up aninflated dollar and sustain the massive federal budget deficits, swollen toover $2 trillion, which fund America’s imperial expansion in Eurasia and oursystem of casino capitalism. They have us by the throat. They are aboutto squeeze. There are meetings being held this week Monday and Tuesdayin Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President HuJintao, Russian President Dmitry Medvedev and other top officials of thesix-nation Shanghai Cooperation Organization. The United States, whichasked to attend, was denied admittance. The gathering is, in the words ofMichael Hudson, "the most important meeting of the 21st century so far."U.S. credit card defaults rose to record highs in May in another sign thatconsumers remain under severe stress. Delinquency rates -an indicator offuture credit losses -- fell across the industry, but analysts said the declinewas due to a seasonal trend, as consumers used tax refunds to pay backdebts, and they expect delinquencies to go up again in coming months.Right now, the FHA is [in essence] giving out no-money-down loans to anyone who doesn’t already own a house, regardless of credit history. InCalifornia, first-time homebuyers purchasing a freshly built home receive nstant cash in the form of a tax credit: $8,000 from the feds (soon to beincreased to $16,000) and $10,000 from the state. Local governments arealso throwing in some goodies. "I have some some money from the schoolfacility fees that I can get. Like you need 3.5 percent down, but I can getyou about $4,000 of that from down-payment sources. That just cameback. It was gone but it’s back," said the sales lady at Braeburn, loweringher voice just a bit that made it seem this was some sort of racket. "Andwe pay the $10,000 closing costs for you. It’s a win-win situation. Win-win indeed. If you bought Braeburn’s largest home at base price, you’d paynothing up front and have more than $5,000 left over for new furniture . . .Fançois Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world's GDP would be required to pay for oil, leaving no money for putting it to any sort of interesting use. At that price level, we can't even afford to take delivery of it. In fact, at that price level, we can't even afford to pump it out of the ground, because the tool pushers, roughnecks and roustabouts that make oil rigs work don't drink the oil, and there would no longer be room in the budget for beer.
And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like 25% of global GDP. We may never run out of oil, but we have already run out of money with which to buy it, at least once, and will most likely do so again and again, until we learn the lesson. We will run out of money to pump it out of the ground as well. There might still be a few gushers left in the world, and so there will be a little bit of oil left over for us to fashion into exotic plastic jewelry for rich people. But it won't be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.
B) What sort of communities will reassert themselves as collapse occurs?
Now, supposing all goes well, and we have a swift and decisive collapse, what should follow is an equally swift rebirth of viable localised communities and ecosystems. One concern is that the effort will be short of qualified staff.
It is an unfortunate fact that the recent centuries of settled life, and especially the last century or so of easy living based on the industrial model, has made many people too soft to endure the hardships and privations that self-sufficient living often involves. It seems quite likely that those groups that are currently marginalised, would do better, especially the ones that are found in economically underdeveloped areas and have never lost contact with nature.
And so I would not be surprised to see these marginalised groups stage a come-back. Almost every rural place has its population of people who know how to use the local resources. They are the human component of the local ecosystems, and, as such, they deserve much more respect than they have received. A lot of them can't be bothered about fine manners or about speaking English. Those who are used to thinking of them as primitive, ignorant and uneducated will be shocked to discover how much they must learn from them.
C) What sort of pesonalities are likely to survive the collapse?
There is a certain range of personalities that are most likely to survive collapse unscathed, physically or psychologically, and adapt to the new circumstances. I have been able to spot certain common traits while researching reports of survivors of shipwrecks and other similar calamities. A certain amount of indifference or detachment is definitely helpful, including indifference to suffering. Possibly the most important characteristic of a survivor, more important than skills or preparation or even luck, is the will to survive. Next is self-reliance: the ability to persevere in spite of loneliness lack of support from anyone else. Last on the list is unreasonableness: the sheer stubborn inability to surrender in the face of seemingly insurmountable odds, opposing opinions from one's comrades, or even force.
Those who feel the need to be inclusive, accommodating, to compromise and to seek consensus, need to understand the awesome force of social inertia. It is an immovable, crushing weight . . .
