Gradually and then suddenly

 

The title of this article is a quotation from Ernest Hemingway's 1926 novel "The Sun Also Rises".

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

Most people - and most countries - that end up in financial trouble spend a long time on the "gradually" part . . . and are surprised when it accelerates to "suddenly".  Nevertheless, I believe that's the stage we're in right now;  the accelerating decline from "gradually" to "suddenly" in the economy - the world's, and our own nation's.

Many commenters appear to agree.  For example, Sovereign Man warns:  "We’re done with “gradually”. We’ve now reached the “suddenly” part".

The idea behind logarithmic decay is that something declines very, very slowly at first. But, over a long period of time, the rate of decline becomes faster… and faster… and faster.

If you look at it on a graph, logarithmic decay basically looks like a horizontal line that almost imperceptibly arcs gently downwards. But eventually the arc downward becomes steeper and steeper until it’s practically a vertical line down.

Logarithmic decay is like how Hemingway famously described going bankrupt in The Sun Also Rises– “Gradually, then suddenly.”

In fact logarithmic decay is great way to describe social and financial decline. Even the rise and fall of superpowers are often logarithmic in scale. The Kingdom of France in the 1700s infamously fell gradually… then suddenly.

We can see the same logarithmic decay in the West today, and specifically the United States.

The deterioration of government finances has been gradual, then sudden. Social conflict, censorship, and the decline in basic civility has been gradual, then sudden. Even the loss of confidence in the US dollar has been gradual… and is poised to be sudden.

. . .

Is it any surprise? The US government is weeks away from defaulting on its national debt over the latest debt ceiling debacle. And yet the guy who shakes hands with thin air refuses to negotiate a single penny in spending cuts to help reduce trillions of dollars in future deficit spending.

The whole world is watching in utter disbelief at the astonishing level of incompetence that has infected the highest levels of America’s once hallowed institutions, including news media, big business, and the government itself.

America– and the West by extension– really are on the precipice of that logarithmic decay curve… the part where the horizontal line becomes a vertical line down.

It has taken years… even decades to reach this point, gradually. We’re now at the “suddenly” part.

There's more at the link.

John Michael Greer agrees.

In simple terms, the US imposed a series of arrangements on most other nations that guaranteed the lion’s share of international trade would use US dollars as the medium of exchange, and saw to it that an ever-expanding share of world economic activity required international trade. (That’s what all that gabble about “globalisation” meant in practice.) This allowed the US government to manufacture dollars out of thin air by way of gargantuan budget deficits, so that US interests could use those dollars to buy up vast amounts of the world’s wealth. Since the excess dollars got scooped up by overseas central banks and business firms, which needed them for their own foreign trade, inflation stayed under control while the wealthy classes in the US profited mightily.

The problem with this scheme is the same difficulty faced by all Ponzi schemes, which is that, sooner or later, you run out of suckers to draw in. This happened not long after the turn of the millennium, and along with other factors — notably the peaking of global conventional petroleum production — it led to the financial crisis of 2008-2010. Since 2010 the US has been lurching from one crisis to another. This is not accidental. The wealth pump that kept the US at the top of the global pyramid has been sputtering as a growing number of nations have found ways to keep a larger share of their own wealth by expanding their domestic markets and raising the kind of trade barriers the US used before 1945 to build its own economy. The one question left is how soon the pump will start to fail altogether.

When Russia launched its invasion of Ukraine in February 2022, the US and its allies responded not with military force but with punitive economic sanctions, which were expected to cripple the Russian economy and force Russia to its knees. Apparently, nobody in Washington considered the possibility that other nations with an interest in undercutting the US empire might have something to say about that. Of course, that’s what happened. China, which has the largest economy on Earth in purchasing-power terms, extended a middle finger in the direction of Washington and upped its imports of Russian oil, gas, grain and other products. So did India, currently the third-largest economy on Earth in the same terms; as did more than 100 other countries.

. . .

Today, the sanctions are hurting the US and Europe, not Russia, but the US leadership has wedged itself into a position from which it can’t back down. This may go a long way towards explaining why the Russian campaign in Ukraine has been so leisurely. The Russians have no reason to hurry. They know that time is not on the side of the US.

For many decades now, the threat of being cut out of international trade by US sanctions was the big stick Washington used to threaten unruly nations that weren’t small enough for a US invasion or fragile enough for a CIA-backed regime-change operation. Over the last year, that big stick turned out to be made of balsa wood and snapped off in Joe Biden’s hand. As a result, all over the world, nations that thought they had no choice but to use dollars in their foreign trade are switching over to their own currencies, or to the currencies of rising powers. The US dollar’s day as the global medium of exchange is thus ending.

. . .

In short, America is bankrupt. Our governments from the federal level down, our big corporations and a very large number of our well-off citizens have run up gargantuan debts, which can only be serviced given direct or indirect access to the flows of unearned wealth the US extracted from the rest of the planet. Those debts cannot be paid off, and many of them can’t even be serviced for much longer. The only options are defaulting on them or inflating them out of existence, and in either case, arrangements based on familiar levels of expenditure will no longer be possible. Since the arrangements in question include most of what counts as an ordinary lifestyle in today’s US, the impact of their dissolution will be severe.

Again, more at the link.

Brandon Smith brings it back to the root of the problem - the US-dominated international financial system.  It has to be reformed, but current efforts to do so are predicated on a socialist world order and the undoing of rights and freedoms we've long taken for granted.  (See here for an interesting discussion on that issue).

We just saw the beginning of the end with the latest banking crisis involving companies like SVB, First Republic and Credit Suisse – It’s not just US finances, but banks around the world that rely on liquidity injections from the Fed to stay afloat. The central bankers addicted the system to cheap easy debt and now they are taking away the drugs.

. . .

I believe we are fast approaching another engineered singularity, a controlled demolition of existing systems to make way for a cashless society, a one world currency and global governance. I believe this because it’s all the globalists can talk about these days; it’s not as if they’re trying to hide it anymore.

The BIS and IMF are actively fielding one-world digital currency mechanisms right now; structures that would combine all national CBDCs under one umbrella. In the meantime, globalist think-tanks like the WEF (World Economic Forum) are ranting excessively about the coming era of an AI controlled economy and a “4th Industrial Revolution” in which you will “own nothing, have no privacy” and will be forced to adapt to a cashless socialist sharing system.

All they need is a scapegoat to complete their crisis formula. War seems to work well in distracting the masses from the true culprits behind any financial calamity, and numerous institutions are hard at work to convince the public that countries like Russia are to blame for ongoing stagflation problems ... However, foreign conflagrations will not be enough for the establishment to keep the American public from scrutinizing the narrative. They need a domestic enemy, a frightening threat that lives right next door. That is to say, they need to find a way to blame conservatives and liberty activists for the impending crash that they caused.

More at the link.

I'm going to let Peter Ziehan have the last word.  I know some don't trust his forecasts and views, but I think he offers some genuine insights that too many discount or ignore.  In this short video clip, he points out that "Global Economic Growth is Collapsing".

Please follow the links provided and read the articles in full, and then consider them in the light of Ziehan's comments.  Putting them all together, we're not in a happy place, economically speaking.

I'm not trying to preach gloom, doom and disaster here.  I'm simply pointing out that the whole of the Western world, and to a certain extent the entire world, is facing economic decline, possibly (probably?) precipitously.  We need to take that into account in planning our own futures, and structuring our possessions, plans and supplies accordingly.  That way, at least, we can be as prepared as possible to face what's coming our way.

Peter