currency exchange in Somaliland, an unrecognized country within Somalia, from the BBC, photographer Simon Reeve
Collapse is happening more quickly this year, but for most people it’s still happening so slowly as to be hardly noticeable. What will it take to wake people up to what’s going on? And when the next crisis happens, will it be seen as an element of a larger civilizational collapse, or merely as another isolated incident that we need to ‘bounce back’ to ‘normal’ from?
The last major signifier of collapse was, of course, CoVid-19, or perhaps more specifically our utterly incompetent and selfish response to it. Hurricanes, massive forest fires, record heat waves, financial collapses, and the political and economic collapse of individual nations are all still seen by most as ‘isolated’ events that have ‘always happened’. And already the seeming majority view of the pandemic is that it was an embarrassment that hopefully won’t happen again and is now best forgotten.
So, against a background of everything slowly falling apart, what might we see next, that can’t easily be dismissed as an anomaly, but which rather has to be viewed, at least by those paying attention, as a portent?
My reading of history suggests that major economic crises happen more quickly and more often than political, social or ecological crises, so my guess continues to be that the next major turmoil as we slide into collapse is likely to be an economic one.
I should know better than to write down my predictions for the short-term future (though I did correctly predict the Ukraine War), but it is fun to speculate, so here is my guess at the ‘top 3’ possibilities:
1. Partial collapse of the banking system:
Our fragile banking system, and all the financial and economic systems tethered to it, have never recovered from the collapse of 2008, which required trillions of dollars of taxpayer money to prevent total collapse. Having blown the budget on foreign wars, the US and its vassal states have nothing left in the till for another massive bailout.
Almost every bank is overextended with high-risk loans (needed to meet profit targets), and vulnerable to a run by worried depositors, and when banks start refusing to honour deposits to stave off insolvency, trust will evaporate and citizens will look for safer places to park their money. The banking industry’s attempt to move us to a ‘cashless’ banking system, where you cannot take any money out in cash, will accelerate their nervousness.
Without a functioning banking system, governments will have to reestablish public financial institutions, which will entail relearning from scratch how to do so. Without adequate deposits, banks can’t loan money, and they have to call in existing loans. The economic effects could be horrific, and it could take decades for the situation to restabilize.
2. Global currency chaos:
The US is furiously working to prevent the emergence of a multipolar world, because the exorbitant privilege (their adjective, not mine) given to the wildly overvalued US dollar as the global reserve currency would quickly be lost, as countries switched to trade in reasonably-priced reciprocal currencies.
That would lead to a run on the US currency not dissimilar to a run on a bank — the currency would collapse, and without a replacement (even a return to the gold standard would probably no longer work), currency chaos, with wild fluctuations as the speculators (who presently do 95% of all currency trades) desperately try to recompute what value, if any, the rest of the world’s currencies have. It may not get as bad as a return to barter and scrip this time, but for those who deal with, hold assets in, or visit foreign countries, it could be a wild ride.
3. Trade wars leading to hyperinflation and empty shelves:
The US, as part of its attempt to destabilize China and other countries that threaten its economic and (to a slightly lesser extent) political hegemony, is using economic and trade sanctions and economic blockades to try to weaken those countries’ technological, resource and other economic advantages. That plan appears to be failing, as other countries are just reorganizing their manufacturing operations and pivoting to other supply sources and trade partners.
Once the world realizes that the US essentially produces nothing of value except war materials, it may not take that long for trade agreements to be revamped to cut the US out of the picture entirely, since they have nothing to offer except threats, the world’s reserve currency, and an insatiable appetite to consume everything.
There’s even a question about how long the US’ European vassal states will put up with absurdly overpriced US gas and other resources in place of ‘sanctioned’ Russian supplies, a situation which is leading to the disastrous de-industrialization of Europe as it can no longer afford the energy to power its manufacturing industries.
This will all inevitably be hugely disruptive to global supply chains and trade patterns, so our current economies, which are based on just-in-time delivery of everything (for “efficiency” reasons), are likely to seize up. Remember those pictures of people running to the bank with wheelbarrows of cash to exchange it for new bills before inflation makes it worthless? And the huge lineups and empty shelves after the collapse of the Soviet Union? Coming soon, perhaps, to a country near you.
Any of these three crises (which are somewhat related) might easily lead to a broader economic collapse — a major depression that we may never really ‘recover’ from.
There are some other possible near-term crises that I considered adding to this list: immigration wars, cancelled elections, extended major heat waves (much greater than the one in Europe in 2003 that killed 72,000 people), more balkanization of countries as national governments become too unpopular to hold, more natural disasters (like the Indonesian tsunami that killed 250,000 in 2004, or the Haitian earthquake that killed 320,000 in 2010, except this time in a ‘western’ country), and another pandemic (this time most likely an avian flu pandemic, that will wreak havoc on global food supplies). Any of these is quite likely, but they are, I think, less certain that the three economic crises at the top of my list.
Place your bets. Rien ne va plus.