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permaculture - Re: [permaculture] The Five Stages of Financial Collapse

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  • From: Toby Hemenway <toby@patternliteracy.com>
  • To: permaculture <permaculture@lists.ibiblio.org>
  • Subject: Re: [permaculture] The Five Stages of Financial Collapse
  • Date: Sun, 02 Mar 2008 11:32:00 -0800

Harmon Seaver wrote:
You need to read his more comprehensive work on the USSR's collapse

Thanks for summing all Orlov's verbiage up! I could see he had written on the USSR collapse elsewhere, but was responding to what he said about the role of centralized control--not what he'd written elsewhere. Orlov is engaging, but I don't find him a clear enough thinker to want to read much more. But I'm in total agreement that Russia has a social system far more amenable to local community that does the US. However, I've seen community build quickly in US cities when it needs to. My neighborhood pushed well-armed gangs out in the 80s, for example. You just don't use guns to do it, or you lose. Gotta think permaculturally.
I don't think he gets it wrong. We already have close to a million
empty homes, and the subprime mess is just getting started.
Actually, it's two million. There's a ridiculous surplus of housing in the US.
http://www.nowpublic.com/money/over-2-million-empty-homes

By "empty homes" I meant houses that people had been kicked out of. Orlov wrote:

Financial collapse, as we are are currently observing it, consists
of two parts. One is that a part of the general population is forced
to move, no longer able to afford the house they bought based on
inflated assessments, forged income numbers, and foolish
expectations of endless asset inflation.

He's missing the point. He is implying there is giant surge in homelessness, and there isn't. Googling for numbers tells me less than 10% of empty houses are from people "forced to move." The other 90% are empty because the speculators who bought them can't sell them, or because the resident homeowners could buy a new place more easily than they could sell the old one. Orlov is blaming the house buyers when, I think you'll agree, the cause is the finance and real estate industries' policies.

What concerns me is the trillions of dollars that are chasing the next big bet. It was stock in the 90s, then real estate and emerging economies, and now it's commodities. The rise in oil and grain prices is primarily from a hot market for futures in those commodities, since commodities--basic needs--are being seen as a haven for investors. If the rich want to drive up stock prices, fine, but now they are driving up the price of food just to get richer. That's a recipe for chaos. Also, at some point soon they will run out of markets to pump up, and all that paper money, which needs to flip quickly to keep growing, even to exist--will disappear, since it's not based on anything real. That's the real financial collapse that looms. Don't hold cash, bonds, or stock.

Toby
http://patternliteracy.com



Banks are already letting people miss long strings of payments on sub-prime mortgages without foreclosure, since they know getting some eventual mortgage payment is better than millions of empty houses causing further drop in home prices as well as a surge in homelessness. In fact, it's homeowners who are now walking away from their houses into cheaper ones (Thursday's Wall St Journal, page 1), leaving the banks unhappily stuck with houses worth less than what is owed. Banks know that in wholesale foreclosure, they are the big losers.

Then why are they the ones who worked the hardest to stop the recent
bill in Congress to try to alleviate the problem? Not that I think that
bill made any sense -- the gov't can't come in and modify private
contracts, that would cause total chaos and flood the courts with lawsuits.








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