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Anarchy in the USA

Posted by Mark Motive on February 13, 2010 Economics, Society Add comments
Feb 132010

A recent mainstream article in Market Watch asks, “Are you prepared for the economic anarchy coming after a global-debt time bomb explodes?”

Good question. The author refers to a Barton Biggs book, “Wealth, War and Wisdom”, that suggests the following:

“Your safe haven must be self-sufficient and capable of growing some kind of food … It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson.”

Now, Barton Biggs is an old Wall Street insider…for someone like that to write an apocalyptic book is highly unusual. But perhaps he is revealing the inside view of what Wall Street truly believes. After all, there are two kinds of reality: the real reality and perceived reality. The top echelon of wealthy society is especially adept in manufacturing reality. But gravitational forces of perception and reality eventually merge into a single fuzzy entity.

The Market Watch article continues:

Out of the ashes of anarchy must come a Second American Revolution. But unfortunately nothing will happen until a great crisis awakens America … shocks the conscience of the masses … we are “asleep” … only a seismic, systemic shock will trigger the necessary revolution.

We are at the tail end of a two-generations worth of wealth creation. The potential unwinding of this wealth could be apocalyptic.

Source: Market Watch



  • Denise Brown

    Have we ever seen a global debt bomb of this kind before in history?
    If so, what are the similarities and what are the differences to this present drama?

    I am not dismissing the potential for anarchy as a direct result of economic fallout, but I am curious if there are other alternatives to this scenario?

  • Plan B Economics

    I think Barton Biggs gave the ‘anarchy’ outcome a 10% probability. It definitely doesn’t have to end that way. It could be a less dramatic, persistent deflation of real wealth. It could also manifest in the destruction of US hegemony.

    The British Empire ended with a whimper, rather than a dramatic event (if you don’t count WWII). I can’t remember the full details of this story (something to do with the Suez Canal)…but some say the end of the British Empire was marked around 1955 when the American government threatened to sell British bonds if Britain didn’t cease some sort of action. Britain had no choice but to appease the Americans.

    World War II did the British economy in, and increased the debtloads of governments around the world. But in that situation, industrial capacity throughout the world was wiped out so there was a highly productive use for all that debt capital. Today, we have excess debt and excess capacity and this is the main reason it is unlikely that we simply grow out of this predicament.

    I think there may have been a similar situation with the Roman Empire (although some argue their decline was actually an agricultural issue). The Empire was overstretched and lacked the financing to keep all the regional tentacles firmly attached to Rome. Of course, the end of that empire was marked by a devolution of some civilizations, but it took a long time to play out.

  • Denise Brown

    Thank you.
    While I can’t imagine anyone can completely predict the outcome of this equation, I can only hope it will be less dramatic……and of course, the US hegemony has already been watered down…
    Whatever the results, I believe these are historically pivotal times.