the current financial crisis and its meaning in the context of globalization

I think that, in order to understand the ramifications of the current financial crisis,  we should look at a much larger picture: liquidity, credit etc and their current functions. this broader outlook might also explain, why the US system didnt collapse as yet and what might happen in our future.

right now, we have tremendous global trade, at least 80% of which is in the dollar zone. this means that the currency of a single country was used to pay for most of the global trade. however, the latter is much bigger than the former, which creates such insane numbers as  $60 trillion etc, supported in fact by the 80+% of goods produced in the world, which are totally out of the US control. for a time, the dollar worked in the quality of the Petrodollar, created by an agreement between Reagan and the Saudis. then, the need in collateral was covered by the so called Internet bubble. When it, in its turn, also exploded, the need in collateral had to be covered by something else. Since nothing on this scale could be found in the US, that meant the need in creating “smoke and mirrors”, with collateral, which amplified itself after going through middlemen, the more the merrier. welcome, the housing bubble and the related SIVs, CDOs, credit swaps etc, which built $60 trillion of “value” on basically such a shaky foundation as the US housing market. this shows the systemic vulnerability of the globalization, based on unequal exchange between the sides.

however, i wouldn’t be looking for an evil intent. even though greed indeed run high as it often does, this seems to be a systemic feature experienced at this time of the lifecycle by many of the earlier globalizing empires. for example, Britain used to control most of the world trade, not allowing, for example, sales of goods with defense potential (including rubber) to such countries as the US or Germany. in 1913 however its bank assets were dwarfed by what was contained in banks of Germany. it would take three decades between two world wars and including the Great depression to get from the end of coal era, dominated by Britain, anf the start of the oil era, which would, in the future, be dominated by the US. Britain, of course, would be totally dwarfed in comparison to the US, while the shift also changed practically every facet of life.

In my works, I show that a technological, social, financial etc shift of even greater magnitude may be waiting in our future, as the US-style, oil-based economy fails in fulfilling the needs of the rapidly globalizing world, which is already much greater than it can be reasonably controlled from the US.

if you want to learn more e-mail me at 4112lucy@gmail.com.       

how to survive in the world with diminishing resources and growing appetites?

The gloomy daily news show that we are entering yet another Malthusian squeeze. As early as in 1798 the guy has found out that resources are limited (indeed), while people tend to multiply as so many rabbits. thus, the reasoning goes, sooner or later there must be a correction: people either die, of wars and famines, or stop multiplying voluntarily. and indeed we see as both of these scenarios are currently unfolding: the latter in the Western world, the former in the developing countries. So, all is gloom and there is no exit or salvation.

meanwhile, this is obviously wrong — despite occasional bloodbaths, people managed not only to greatly multiply since Malthus’ times, but also significantly improve their lot. So, there must be a solution to the Malthusian paradox, which is especially important nowadays during the crunch period, when we need to know how to escape or, at least alleviate it.

the solution can be found easily as soon as we look at historic maps. since the start of written history some 6-7 thousand years ago, civilization spread around by domesticating ever new distinct geoclimatic zones as soon as the older ones were exhausted.

We can name 6 such zones as to this date, corresponding to traditional historic periods. 1. Civilization started in the tiny area of great rivers’ deltas, uniquely suitable for irrigation agriculture. 2. Then, the center of development moved to the classic
Mediterranean, which grew rich on marketable cultures, to compensate for its soils unsuitable for wheat, but perfect for growing the olive and the vine in its arid climate. 3. After the collapse of Rome, we see the gradual rise of the medieval
Europe, which cleared its forests to till its heavy but fertile clay soils. 4. After the ecological catastrophe of the 1348 Black Death related to the deforestation of
Europe, the center of growth moved to the northern shores, with animal husbandry and fishing substituting for and stretching scarce grain. The growth of market economy led to trading in items that previously could be collected in the forest (i.e. timber) and led to the development of the sturdy “frame-built” ship able to sail the
Atlantic. As a side benefit the
Americas were “discovered” with the great influx of gold and silver specie leading to the marketing boom. 5. On the next stage,
England compensated for its lack of wood and rivers, the prime resources of the previous Age of Exploration by developing its unique model based on coal. it also pursued land improvement as the so called coppice woods (the source for renewable timber) could now be cleared off for sheep-grazing meadows. The British colonialism used this model of land improvement for the so called agrarian colonialism, with “white” settlements all over the world within the temperate climate zone. 6. The mass societies of the 20^th Century broke through the barrier of temperate climate that previously restricted the man-farmer. The agriculture in this new zone of the extreme climate, first and foremost, in the
US, was based on irrigation using the Ogallala Aquifer and an excellent system of roads to deliver its products to the market based on oil. The
USSR was less successful with its Virgin lands, presumably because of the lack of sufficient artesian water sources.

so, as we see, there is hope, even as the geoclimatic zone of the mass market agriculture dependent on oil seems to be exhausted. All we need to do is to find the next promising geoclimatic zone, with its unique resource and start domesticating it.

that wouldn’t be too easy. Domestication of a new zone is a difficult and trouble fraught process. fortunately enough, the past provides a good road map, as each zone, inasmuch unique must pass through the same stages, not unlike birth, maturity and death of a living being.

i analyzed these stages and will write about them in my future blogs. I feel that it is very important to start a wide discussion of it as we are swiftly approaching the period homologous to world war I the likes of which took place at the start of each new historic period.