After almost two months of enforced lockdown and no income or work (other than blogging and earning cryptocurrency), not only my life but almost the entire planet has entered what some analysts are calling the Greatest Depression since 1929. Our ability to earn a living or trade has dried up, for some more than others and for some irrevocably and permanently. We may have to reinvent ourselves. Let’s take a look at some stats to compare our current situation to the past 100 years, thereby gaining more insight into our condition.
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The end of globalism and the return of nationalism
If we look at global trade, we can see that in 1913 it stood around 28% of global GDP. Then came WW1 and it collapsed, unable to recover, despite the “roaring twenties”. By the end of WW2 it bottomed out at only 8% of global GDP. Thereafter it slowly climbed and by 1989 was back at 28%. Then came the rise of China to the World Trade Organization (WTO) around the turn of the century. Fueled by them, global trade peaked in 2007 at 62% of global GDP. Those were the heady days which led to the global financial collapse and the last recession, with the bankruptcy of Lehman Brothers, Bear Sterns, and the sub-prime housing bubble bursting.
Many took a big hit back then. Global trade fell to 42% of GDP, and although rebounding somewhat, it never returned to those ATHs (all time highs). And this is where globalism started to experience push back and a return to nationalism. Concepts like “Make America great again” became the flavor of the day. Nations saw the folly of outsourcing manufacturing to the east, particularly China, as well as the folly of the just-in-time delivery supply chain. And this was before the pandemic arrived. The global lockdown that followed simply reinforced this realization and pushed the swing back to nationalism more swiftly. Post pandemic and lockdown, this trend will certainly accelerate.
In other words global trade via outsourcing any manufacturing or reliance on delivery along the shipping trade routes will shrink. China will feel this particularly hard, as the rest of the world wakes up to how dependent they are on China for everything, especially medicines or pharmaceuticals, as this lockdown showed. The pulling out of manufacturing from China, by USA, Japan and many other top trading nations, will perhaps be one of the shifts that actually slows down China’s rise to world domination, but that rise to power is not going away and China is hell bent on taking over the world, if not by soft power - buying you out or saddling you with unpayable debt - then by all other means.
Capitalist inequality
Now let’s look at the earning capacity of the top 0.1% compared to the bottom 90% in the current world leader, America. In 1928, the system of capitalism allowed those top 0.1% to earn 205x the average wage of the bottom 90%. That is the way the system was designed unfortunately. Most of us will scrape by while a small few live like royalty in ostentation and debauchery, in my opinion. By the height of WW2, those same 0.1% were only earning 50x more, and by 1975 the ratio had fallen to 35x.
But then it picked up, perhaps driven by President Nixon’s crime of removing the gold standard for the US dollar in 1971, which destroyed any last vestiges of morality in the fiat currency and real wealth of USA. Because after that there was no standard, and the Fed could simply print paper notes backed by nothing and buy any physical assets worth something. That was one of the greatest financial crimes in modern history. That is what helped push USA artificially to the top of the heap and caused the following financial collapses and economic suffering for millions of people globally. But that crime is for another article.
By 1989 the top 0.1% were earning 90x the bottom wage earners, and that peaked in 2007 at a sickening 220x. Then came the global financial collapse, which is inevitable with this system of capitalism, and is baked into the equation, to occur like clockwork without fail. That is how capitalism based on Keynesian speculation philosophy is designed. There will be booms and busts and you will be destroyed by them so get used to it peasants. Even after trillions of dollars of free money bailouts to the top elite, massive tax cuts just for them, still they never quite recovered to that gaudy peak of 2007.
This implies that inequality peaked back then and is a thing of the past. Like in the 1930s, just before Hitler and the Nazi party, and WW2, populism is on the rise as the masses feel hard done by with those former inequalities. There is certainly no labor union in America today. It has been crushed deliberately and suppressed so that big industry can abuse the worker to the max. Get used to it peasants, that’s your lot and no right to complain for you. Or so it was.
The rise and demise of the Baby Boomers
Now those 0.1% and in fact the entire generation that emerged post WW2, called the Baby Boomers, grew out of the Great Depression and knew hardship and the need for frugality. They went through a world war and survived. As a result it appears as if they also became the most selfish generation, according to some. They knew only prosperity, although they did protest injustices like the criminal Vietnam war, where USA killed millions of innocents with toxic deadly chemicals in a torturous way that matches the Dark Ages in brutality and senselessness. So much for an enlightened, mature and civilized world.
The tragedy is that the Baby Boomers also protested for another cause – themselves. They demanded entitlements for the aged, cutting investment in the youth, and other such whims. But they are now dying off naturally, and the new generation - the Millennials – have just overtaken the Boomers in 2019. And they have quite a different world view, thanks to the world left to them by the selfish Boomers. And the Millennials have now experienced the equivalent of the Great Depression and the global Spanish flu pandemic right now today.
Conclusion
And so the future will not resemble the past. Unless you’re talking about 100 years in the past because we are in the midst of that bygone age and its crises all over again. Will we end up collapsing still further into WW3 this time around? That is a big possibility. China, Russia and Pakistan against USA, Japan and India for a start. The troops are lining up as we speak. The economy is entering the Great Depression now, and will continue its slide for the coming years. How many years is anybody’s guess. The global dollar hegemony is dying. USA is losing its unipolar global domination. That era is over. The 21st century is the era of China and her emperor will dictate to us all, as they do already in subtle ways, like controlling the WHO narrative and this very pandemic right now. We are at a turning point in history, the fourth turning. One empire is ending and another rising. Life will never be the same again.
Ref: https://www.zerohedge.com/markets/eric-peters-real-test-only-just-beginning-and-everything-about-change
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