Further down the sprial

Thoughts on crumbling empires.

This started from a bit of a thought experiment I've been tinkering with. I wondered if for a change, I'd have the guts to announce future predictions on what happens next in Europe and America. After batting the ideas around for a while, I realised I couldn't, but ... I could narrow it down.

I'm basing this on the concept of de-leveraging that's occurring in the world. It's not the banks rebalancing books to safe levels in particular, and the upper say 20% of America and Europe certainly aren't loosing much in the way of creature comforts. All the correction of unsustainable debt appears to be falling on the poorer end of society through tax hikes, food inflation, welfare and healthcare cuts. This is where the missing billions of correction to the system appear to be coming from.

Now I tried to guess how this would play out. A fair number of analysts are predicting a turn around for national finances in 2013. "We're through the worst" sort of thing. I don't buy that so much. In the UK cuts are only just starting to bite, in Spain and Greece lost tax revenue from the oceans of unemployed and an increasing unwillingness or inability to pay tax are undermining any recovery, and it's just beginning. As I see it, 2013 is the year when all the Austerity talked about in 2011 & 2012 is finally going to bite for millions.

There's a disconnect to contend with though. I'm not in the grand conspiracy theory set. I tend to think the elites, rich list, 1%, 10%, 20%, whatever you want to call them act more though two things. Greed and a lack of empathy. From earlier scribbles, you'll know I see greed as a human problem that covers the entire spectrum from those in poverty, right to the top. The lack of empathy is more of a kicker. The end result is that top say 15% of wealth in any country doesn't really have a clue what all the tax cuts and care cuts mean in real terms for millions of less well off people.

But... It's not only the 15% that will politically support and maintain any measures that preserve the status quo of the top, it's anyone who believes they are near that bracket (even when demonstrably the intended cuts will leave them or very close relatives worse off), and the lovely Mass Media. The likes of Fox News and the putrid Murdoch's of this world are in with the top percentile. Far too many uncritical thinkers just go along with the political spin, and at time down right lies from low grade media aimed at them. They won't even notice huge stories being skipped entirely by the press and media. When things get bad later, they'll blame Muslim's or the Polish or the Socialists, or the unemployed. Whatever Fox News and Co. aim the cross hairs at.

So we have a system of inequality that is trying very hard to maintain equilibrium, and *that's* why I can't predict much. Logically, you'd expect things to fall apart in to fiscal defaults, companies going bankrupt and social unrest. However, with the vast majority of money in the world selfishly protecting it's own interests, and a big chunk of the population blindly following the resulting rhetoric ...?

I see two options ... That's as good as I can get it.

Either the interests of the money effectively win. That is, the poor are ground further and further in to debt slavery and ill health. Inequality soars, but the state puts in place increasingly draconian policing and social control. Eventually it wouldn't matter if three major banks all did fail, or if every pension pot in the land got emptied. Once the oppression reaches a certain state, what's the public going to do about it even if the main stream media is kind enough to let them know about it?

Or! The more optimistic version. Things break before we find ourselves living as slaves in police states. Major losses are sustained by the financial sector and hit a big chunk of the 15% top end. I say optimistic. Actually it's almost as miserable as the other option. You could reasonably expect major social unrest and a period of huge political and financial uncertainty before things get any better.

Fun huh? Yup. That's how I see the two main potential outcomes of the current situation.

Oh wait.

Except...

War.

But who is brave enough to predict the next war in scale, location, involvement or scope?

Not me. But it is the other option.