GLOBAL FUTURE ANALYSIS
PROBLEMS | NO VISION
Vision is in dire straits. The endless growth focus, has narrowed our continuity focus and surrounding view, like a biker that must go on if he want not to fall. A situation that only is focused in growth is due to collapse if resources runs out and thereby gets more expensive. Time for a time out. Discover a vision on these new situation. There are only a few who have a post carbon prosperity vision. Doomsday preachers have no vision: they just had the current system while profiting tremendously from it, even from it's coming under siege and it's defaulting. We have no vision. None of us. It's a shame, but it's the unfortunate the truth. Vision grows not in being busy with consuming, nor in narrow minds of reactionary people. Vision grows under pressure. So vision will come to surface when our lives get changed/affected by the Credit Crisis and the Energy Crisis. Therefore the no vision winter regardless the Energy Crisis is over: it's vision spring (as the Credit Crisis and the Energy Crisis start to have impact on our lives/businesses/banks/households/governments. The certainly a no total vision winter concerning the Credit Crisis. Only the IMF is very clear about the further decline of the US real estate market prices (and thereby about the deepening and widening of the Credit Crisis). Nobody has any answer, all hoping -against all odds- for the best, because if this recovery not will happen (and it will not: the gap is too big, balance sheets must first been cleaned up) the consequences are severe. Collapsing both the financial system as governmental budgets (and the funding of these). In the US if some more banks go, the FDIC (Federal Deposits Insurance Corporation) will be out of insurance funds. Than the state has to tap in, this will 1) wreck the USA brand in the world, 2) increase the interest rate on new Treasury Bonds (regardless how heavy the Open Market Committee of the FED used printed dollars to trade in the Treasuries to keep the trade alive: something they do for quiet a long time yet: printed money attracts foreign investments by an alive trading floor), 3) lead to skyrocking interest rates, 4) will force the dollar to collapse, 5) will end the Federal Government system of the USA (not by choice, but by dried up funds) and 6) this will take other governments, currencies, companies, pension funds around the world down to. The US financials have show the world that they don't can handle much cheap credit wisely. If the dollar felt and Treasury Bonds become worthless the USA loose it purchase power in the world completely. It's not the '70ties where Nixon could say to foreign (Bretton Woods) governments: 'sorry the half of the gold we should have purchased we didn't or we sold it, anyway it's away, but we have new printed money to give to your country instead'. The USA is not longer the protecting and credit giving nation, but has become a parasite nation the rest of the world: foreign central bankers will not increase their dollar 'backing' any more further. The only thing governments can do as last option to contaminate the Credit Crisis when it goes really wrong is seizing their own currencies and the central banks who run them and abandon the debt/loans issued based fractional banking as form of money supply and replace it with a by governmental assets/orders backed system of money supply and bailing out the saving deposit holders, sanctifying the shareholders and bondholders. If they can save their currency by this is based on the size of the former US assets of the currency, companies and pensionfunds. The tough choice is supporting the own current currency by this of letting it fall also and use the new coverage/supply system for a brand new currency (lead by the BIS: Bank of International Settlements). Mixing old in new (making new more acceptable but instant burdened) of just initiating a new value with mixing old values. The new international currency will be energy. Not the Joule but the kWh, because measuring the Joule is difficult and the kWh is simple, electricity is transportable and warmth much more difficult, there is already an infrastructure for electricity and because kWh is based on electricity and electricity is the most common appearance of energy in the future. A currency that can not be inflated artificial and gain value during time (till the energy problem is solved by a new cheap and abundant way of harvesting oversupply of energy). Fractional banking in energy can be avoided by legislation that forbid that as can artistic behaviour and be assured by legislation that forbids contracts longer than 1 year (giving fractional banking less space) and legislation that demands online database publishing of contracts and auditing of the calculation software by external auditors and by local credit energy/water credit record databases (preventing over credit). The energy currencies will also compete on local level with the new (local) state originated cash currencies, because governments can tap budgets from it or banks can inflate it, because each company and household will be able to produce some energy surplus (by the right investments). The energy utility services will be the new banks of the world (limited by within a year delivery legislation that prevents bubbles and ensures fixation with real values: we don't want a new Enron, and certainly not an uncountable number of new Enrons all around the globe) and they will cooperate with the mobile telco's for a cheap payment structure where GSM or IMEI number is than the bank number (owned by the owner, serviced by a provider). Digital non-fractional gold money also will gain popularity, but it has it's not all the benefits that energy currency has. For example: the pureness of the gold is disputable and not just measured available in the gold currency. The same applies to water, cereal, coal, oil and other commodity based currencies. Of course the USA will try to take a lead in a new (global) gold/energy dollar, but any government in the world will no longer be pleased to cooperate with the USA Federal Administration (as that equals being robbed in free choice) and then the US Federal Administration structures will be ended as all their former ways of financing will dry completely out. The USA will become a bad brand and the senators of all the 50 states (and 1 district) will leave Washington DC with the first flight out. The federal USA structure will burden their foreign contracts and leave them with no (energy and resources) purchase power overnight. All states will introduce their own currency (first digital, but within weeks also cash). The damage caused by the US mortgage debts, the US federal debts and the US municipal debts to the rest of the world will be severe. Being American will be equal to spending other peoples savings/pensions. America will face what Russia has faced more than 10 years since 1989. A global desolation and a global bad imago for a decade. China will be hit by this: money away, currency down and main export market that lost it's purchase power. The USA will passed away on it's own made politic/economic/military/moral overstretchiness, based of both debt that could grow and foreign demand for the dollar. The balloon could handle air, it was part of the concept, but the balloon is overdone inflated and by this its structure is damage. Leaks can not be fixed by some Paulson generated fixes. The problem is overstretchiness, not some leaks, much severe than just some leaks. The overstretchiness has damaged the future perspectives of the system. The next President of the USA will be the last one, who only can shut down the store. It's a major pity: the USA was a nation with a remarkable foundation by Constitution and Bill of Rights not many other nations have. The separated states will survive: the US states have all some good resources, they have enough space to feed their people and yes, they will have in some States severe water shortages and yes the major cities will bleed to dead. Amsterdam has faced such a period also, but when times change (read as a new cheap and abundant source of energy can be harvested) the cities will have a second life.
Author: Gijs Graafland
Back to Problems Index
Download the full Global Future Analysis report in PDF