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The Current Economic Collapse
Currently, Worldcom Corporation is moving to declare bankruptcy, which will surpass Enron's collapse as the largest bankruptcy ever.
The effect of this on world capital markets is expected to be more extreme than Enron's collapse. These events clearly show the US as being a bad place to invest in. And one powerful factor that brought money into the US has been that it was considered a safe and secure place to invest. Today, the class of American corporate executives has essentially been shown to be bandits. This does not make investors happy.
At the same time, the possibility of Brazil defaulting on its debt is also getting larger.
These events together certainly have the ability to strongly affect other parts of the US and world economies. The US dollar is declining - it is possible this decline could become a rout. This would lead to serious financial problems throughout the world. The US “recovery” has been mainly been supported by a housing driven by low interest rates. Such rates could no longer afford if foreign was leaving the country rather than quickly arriving.
Here, the Far East would be affected by a massive decline in US demand, the US would suffer a massive decline in imports and hence living standards. The US reduced its industrial capacity considerably in recent years. Without a strong dollars, it will be difficult to pay for oil and the other massively expensive good consumed by the US.
How far these chain-reactions will go is difficult to tell. The country winding up in the situation of Argentina seems somewhat possible. And this could affect every part of the world in a massive way.
I’ll admit that while this may open the possibility of massive social change, it certainly makes me nervous as well. It would be nice to have a proletarian upsurge leading things into crisis rather than a crisis impelling people to (hopefully) take control by default. Still, you can’t really pick the history stage you wind-up in. Under the present circumstances, the more quickly people seize control over society, the less misery the unraveling of things will involve.
One notable thing is that wealth is currently so concentrated at the very top of society that few people have any connection to the ultimate owners today. In a situation of considerable chaos, these rightful owners might not have much way to enforce their power. Or they might come down on society like a ton of bricks.
The bulk of US Military Personal or national guardsmen would be extremely disoriented if they were imposing martial on a society whose economy had recently collapsed. In such a situation, the urge to “get back to normal” would likely be larger than the power of the central authorities given that these folks would likely be blamed for this occurrence.
Given all this, it would make sense for government to arrange an “Al-Qaida” attack larger than even September 11th. But how capable they are of such a thing would be a question. But maybe not that much of a question.
The US Military is also incredibly corrupt and expensive. Keeping it going in a new economy of collapse would be extremely difficult.
Really, the collapse of the various companies shows how the corporate ruling class is on the one hand ruthless and capable of concealing misdeeds. But it shows on the other hand they do not seem to have planned their misdeed particularly far into the future. Despite their crimes, they often seem to have believed their own lies, which now won’t get them very far.