Mar 08
1
The Great Unraveling
I read a review yesterday of a book called Counterknowledge. The premise of the book appears to be that the stuff you read on the Internet is largely the stuff of conspiracy theorists, cranks and crazies. And that people don't pay enough attention to mainstream media.
The review was in Saturday's Sydney Morning Herald. Two pages later there was a review of another book – Flat Earth News. This review goes on to discuss the fact that “newsrooms, pared to the bone to maintain profit in a shrinking market, are ever more reliant on news agencies; news agencies, in turn, are themselves pared to the bone. This leaves the news cycle exceptionally vulnerable to manipulation by PR.”
So the question is “What that we read, should we believe?”
For the last two years – but whose counting – there have been articles on line about the great unraveling of the global financial system. Here is one that I came across this morning. Very sanely stated and argued. And as scary as a Stephen King novel.
And it is backed up by this story in the Financial Times. This quotes Ben Bernanke saying that “there will be bank failures”.
We are in the period of The Great Unraveling. For a couple of generations people have been spoon fed media pablum to ensure that we all act like good consumers.
The problem is that when confidence in a system is really shattered, people start believing almost anything. And in particular stop believing anything that comes from the voice of authority.
This is exactly what happened in the 60's with drugs. The newspapers kept on pounding the people with messages about how marijuana was going to kill you, and since it clearly didn't people stopped believing the messages of big media with respect to all drugs. That was an extremely bad thing.
Who can we believe now?
Americans were used to believing that their President could not tell a lie to the American people. Bush turned that concept on its head. Will the next President be any better at telling the truth?
What about businesses? The regulators of stock exchanges have rules about telling shareholders and markets the truth. But directors and executives find ways to move debts off balance sheets in order to keep some things quiet… And that is why over the last few weeks we have seen Allco, ABC Learning Centres, and others crash and burn.
These cracks in the system are not the end by any means. If the writer of the article referred to above is right, we are going to see a continuing crashing and burning of banking stocks in the US over the coming months. They will in turn pull down a lot of companies that have been growing using debt. And that in turn will mean a vastly reduced US dollar.
Things like the value of the dollar take time to wash through the system. We are just now starting to see the impact of the increase in the price of oil over the last six months, at retail. Increased costs in food, in pharmaceuticals, in plastics…. all very inflationary.
The end of a great civilization is taking place. The big question will be whether it will be replaced by another very quickly or whether we will go through a New Dark Ages, before we can reach the renaissance.