Urgent but Short Economic and World Stability Tutorial

I'll start with recent headlines and some facts:

Obama calls for new Atlantic, Gulf oil drilling
GM’s China Sales Exceed U.S. for Third Straight Month*
China Central Bank Sees Dollar Strength, Global Inflation
Obama: U.S. starting to "turn the corner" on jobs
March yields first solid growth in jobs since recession

*Business Week- April 2 - China GM sales up 68%; Other Gains: Toyota up 33%; Hyundai up 47%; GM (US) up 21%.

Things are getting better ... right? Before the analysis, let's have a look at some charts:






Despite the EU, Russian and US economies crawling sideways like crabs and putting mechanisms in place to increase consumption and production ... There's more of course, like GDP data: India clipping along at 7-8% growth. Japan, Taiwan and South Korea are not far behind. Turkey is undergoing 10% growth.

Here are the serious problems: These are not political, emotional or ethical issues... These are brute, common sense, documentable facts.

1. The world's economic engines and politicians are addicted to growth. They need it as a benchmark of success ... Otherwise, the multi-national CEOs get fired and the politicians get voted or thrown out of office.
2. Economic growth, especially at current, accelerated levels, is completely unsustainable. China and India are the poster children for reckless growth, evidenced by pollution, water shortages and their increasing, bimodal distribution of wealth, which is an impending cultural train wreck. These two countries alone
represent over 1/3 of the world's population.
3. We are all running out of resources ... oil, water (particularly for crop irrigation) minerals, trees, fish and so on. The supposed hundreds of years' worth of coal in the US is a myth, and the lead times and problems
with nuclear energy render them a non-solution to meet near-term energy need projections.
4. We live on a razor's edge of just in time inventory on every supply chain, with virtually no reserves.

Now before you dismiss these facts by saying ""Ive heard it all before." ... Consider an analogy: Question: if a species of water lily is introduced into a pond, and it doubles in size daily, and will choke the pond in 30 days... when will the pond be half full? Answer: One single day before it is completely choked.

One problem with the world's economy is that while it is in difficulty, and resources are dwindling, half of it is cranking along at or near 10% growth. While less than the lily pad analogy, this growth is still a logarithmic curve and remember that economies are compelled to grow rapidly or they will suffer instability.
Another fly in the ointment: The world's largest economy by far is still the US ... beyond the EU and Japan. However, the US cannot possibly repay it's existing debt. This is a classic logarithmic example of a compound interest curve .



For a real time thumbnail of US Debt, see a brilliant website: http://www.usdebtclock.org/

Common sense tells us that as world production and consumption go up, finite resources must go down. Absent some technological energy miracle and major advancements in material science, the world is headed for serious trouble very soon. With apologies to pro economic chart theorists, have a look at my trend schematic:


The Proof of an impending disaster is simple arithmetic. I will ask you invest your time in viewing an 8 year old old on line, YouTube lecture from a geriatric professor you never heard of. Unfortunately, the lecture is chopped into parts, but I include the links to the individual bits in order. This is dry viewing, but in ordinary language and makes the point about the perils of growth. After the lecture, you will be equipped to make your own calculations about what the future holds for you and yours.

Lecture Sections:
One Two Three Four Five Six Seven Eight

The real problem is not dwindling resources, but the instability and chaos that results as resources get scarcer. Both China and India (3 billion people) will need all of the energy and material resources they can get if their socio-political systems are to survive. These are typical plutocracies ... rule by the wealthy irrespective of the espoused brand of politics. Disinclined to give their wealth to the multitudes on the lower end ... they are compelled to provide jobs and the promise of growth to keep order at home. (The same goes for most of the rest of the world.) Worse, plutocracies are also compelled by resources to be expansionistic. Germany and Japan are examples which caused WWII. Venice, England, Spain and Greece are earlier models.

Many material resources are essential for both manufacturing and the modern military. The way that God made the earth, these resources are scattered. ALL plutocracies, whether European, Asian or American are completely dependent on these resources for survival. ALL modern supply chains are vulnerable to single points of failure and we are dangerously close to having some plutocracy or other "corner the market" on supply chain pressure points.

If you take this blog seriously and want to investigate more, there is an excellent free book online from the National Academies Press: Managing Materials for a Twenty-first Century Military. http://www.nap.edu/catalog.php?record_id=12028

The Chinese now have the US held hostage economically. They don't need military conquest to, for example, take US coal. They can simply buy it. They already, de facto are the world's largest shippers. They control the Port of Los Angeles, the Panama Canal, and the world's largest shipping port in Freeport, the Bahamas, controlling the East Coast of the US. The net has been cast.

It isn't rocket science to figure out that we are headed for a near-term resource and economic disaster. If you have taken the time to see the video lecture, you will have concluded that it is basic arithmetic and irrefutable. The world's plutocracies certainly figured out the problem years ago and the US Bailout with the resulting debt problem is a new can of hot chili powder in the soup.

Whom is at risk in particular beside everyone on the planet? Certainly any country with strategic resources.

The fractionated Middle East is certainly a target. Weak militarily, they are long in energy and, they are an obvious survival target for both India and China ... (Nuclear-equipped Pakistan and soon-to-be nuclear armed Iran are in the way of course. ) The current US Obama Administration is unlikely to threaten to use
nuclear weapons to protect the Middle East and the EU has an ineffective military armamentarium.

Currently, I am 260 pages into writing a comprehensive book: "Integrated Security Concepts and Solutions". Topics range from the ballistics of building materials through computers to economic survival. Especially the latter is becoming increasingly important and the time to consider both personal and economic survival is now. While I can't offer methods to fix the world, I do have some solutions for individual and small group survival. I think smart and capable individuals will still have some time to prepare.

I can tell you who the survivors won't be: New York, London and Hong Kong securities brokers and bankers or iPad-equipped computer geeks or ivory tower economics professors, or lawyers with cash in "the bank" or big city apartment dwellers ... And ... even large midwest US farmers that only plant genetically-produced, inedible crops like GM corn requiring industrial processing for . (These large farmers are incapable of feeding themselves even with 10,000 acres!)

My eBook will be done in a month. If you would like to be placed on a mailing list for Integrated Security Concepts and Solutions, send me an e-mail: po at posaunders.com In appreciation for your interest, by return email, I will send an annotated Table of Contents and samples from chapters.

References:

http://en.wikipedia.org/wiki/Economy_of_the_People%27s_Republic_of_China
http://www.nytimes.com/2009/12/01/business/global/01rupee.html
http://www.businessweek.com/news/2010-04-02/gm-sales-gain-in-china-on-government-stimulus-update1-.html