2008 Was The Most Serious Financial Crisis since the 1929 Wall Street Crash. When viewed in a global context, taking into account the instability generated by speculative trade, the implications of this crisis are far-reaching. The financial meltdown will inevitably backlash on consumer markets, the global housing market, and more broadly on the process of investment in the production of goods and services.
Monday, 5 January 2009
Tom Whipple: "We are likely to have concrete examples, shortly, of what happens in the 21st century when civil order breaks down . . ."
Written by Tom Whipple
Wednesday, 31 December 2008 13:49
Before grappling with 2009, it might be useful to remind ourselves that there is a dark side to what lies ahead.
There was a little flurry in the news last week when it was discovered that the Army War College had released a report talking about preparing for civil unrest in the U.S. When you read the report, it turns out to be yet another warning about generals preparing for the last war. It devotes only three pages to the idea that the Army might soon find itself so embroiled in helping local authorities cope with civil unrest that international commitments, such as the war on terrorism, could become secondary concerns.
Since the close of the Civil War, America has enjoyed nearly 150 years of domestic tranquility. There were, of course the Indian wars, some labor disputes and a handful of urban riots in recent decades, but these were isolated and did not last for long. Even during the great depression of the 1930's America's social fabric stayed largely intact. Signs that these idyllic decades may be coming to close are starting to arise. In the last few weeks the deteriorating economic situation has seen serious disturbances in Greece and Thailand. We are beginning to read of disturbances in Russia and China.
Most realists foresee that 2009 will be a bad year with stock markets declining, unemployment rising, real estate values falling, government bailouts continuing, deflation morphing into inflation, the dollar falling, and oil prices rising. Thus far the economic downturn has not had a serious social impact. However, food banks are running short, shoplifting and other property crimes are on the rise, child neglect is increasing as is infant mortality. However, considering the pace at which people have been thrown out of work during the last year most seem to be getting by - so far.
Of all the world's nations, America is probably the worst prepared to deal with deep, prolonged economic hardships, for more of us have disconnected from 19th century, rural, somewhat self-sufficient, lifestyles than in most other countries. In the 1930's many found that they could still return to the family farm, where food, shelter, and meaningful work was available. In 2010 that option exists for very few; we have become dependent on a complex infrastructure fueled by oil for our food, water, clothing and warmth. Start reducing the flow of oil and increasing numbers of us are going to become increasingly desperate.
There are too many turns in the twisting paths that the current economic and oil depletion crises could take to speculate on the details of what is likely to happen. However, there are many potential "failed states" around that we are likely to have concrete examples, shortly, of what happens in the 21st century when civil order breaks down.
It is clear that we are already seeing the opening ripples of what might turn out to be the major social problem of the century - caring for large numbers of destitute people. Most of the social nets in America such as unemployment insurance, charities or shelters have strict time or limited resources. Already charity and religious contributions are starting to drop.
As the situation worsens, it is going to be much cheaper for governments at all levels to provide essential food, shelter and other services, rather than wait for desperate people to start stealing and become ensnared in the criminal justice system. One of the key benchmarks of the next few years is how quickly governments will redeploy resources away from 20th Century priorities such as space travel, expensive weapons systems, and highways towards simply getting people through the decades of transition from current lifestyles. The change will not be an easy one.
Before we get to mobs in the streets, we are likely to go through a time of increasing petty crime and the ensuing pressures on the criminal justice system. Somebody is going to have to think through the appropriate response to major increases in shoplifting and burglaries by people who are trying to feed children after having exhausted all other avenues of assistance.
It is likely that who is kept in prison and for what is going to have to be rethought. State and local revenues are already dropping rapidly and the day is not far away when choices between funding school systems and maintaining vast prison systems will need to be addressed. Alternative forms of deterring criminal behavior and forms of punishment will need to be devised. Indeed the economic situation could deteriorate so rapidly that some of these changes may need to be made in months rather than years.
It is likely that part of the of the solution to getting hundreds of millions through decades of shortages will involve increasing infringement on what many now consider their civil liberties. Better forms of personal identification will be necessary. It is likely that rationing of many things we take for granted such as fuel, food, medical services and travel and even places of residence may become necessary. Other societies have found such measures necessary in times of crisis.
America has not faced a serious domestic crisis for 150 years. We have never faced a situation where 300 million of us bound up in a complex and interdependent society has had to make major involuntary changes in our lifestyles.
Sunday, 4 January 2009
Consumer cash crisis turns the screw on the high street
Sunday, 4 January 2009
A quarter of all British families will have no disposable income in 2009, dealing yet another blow to the beleaguered retail sector.
In November, a survey by Nielsen, the market research firm, and trade body the British Retail Consortium (BRC) found that 21 per cent of families had no spare cash left after essential living expenses. However, sector insiders expect this to grow to at least 25 per cent by the spring.
A PricewaterhouseCoopers (PwC) survey last week showed that six in 10 people believe they will have less disposable income in 2009 than they had last year. Those in the lower socio-economic DE classifications were particularly gloomy, with nearly 70 per cent convinced they would have less money to spend on the high street.
Stephen Robertson, director-general at the BRC, said: "A fifth of all families had nothing left to spend [after core expenses] and I think that will get worse during 2009."
A leading retail figure predicted that the next Nielsen/BRC survey, due in May, will show at least 25 per cent of families lacking the cash needed for minor luxuries.
Andy Garbutt, director of retail at PwC, added: "The increase in unemployment and the falling level of bo-nuses mean it would be no surprise that about a quarter of families would not have disposable income."
Food retailers are believed to have been almost as hard-hit as fashion stores over Christmas, according to Mr Robertson, but the supermarkets have come out fighting this month.
Asda cut the price of 1,000 products to £1 each on Friday, with chief executive Andy Bond admitting that "2009 is going to be a very difficult year" for its customers. But he added that Asda had enjoyed one of its most successful-ever festive periods.
Morrisons will follow Asda's tactics tomorrow, with selected fresh fruit and vegetables, including six-packs of Golden Delicious apples and 1.5kg of onions, selling for £1.
On New Year's Day, Tesco reduced its petrol by 3p per litre, and it is now considering which products it should discount in response to Asda's move.
Sainsbury's, widely acclaimed last year for the price strategies led by chief executive Justin King, plans to expand the number of its low-cost "Basics" products to around 630, from 550, by the end of this month. About half the goods in this range are priced at £1 or less. Sainsbury's is also expected to issue strong third-quarter results this week, while fashion chain Next and department store giants Marks & Spencer and Debenhams could show depressed sales figures.
Retailers have suffered a miserable two months, with a number going into administration. The highest-profile casualty has been Woolworths, with around 200 shops due to close yesterday and the last stores expected to be shut on Tuesday, marking the end of a 99-year trading history in the UK.
Adams, the children's clothing retailer, appointed PwC as administrator on New Year's Eve, putting more than 3,000 jobs at risk across 271 stores.
Experian, the market research firm, has estimated that 1,600 UK retailers could shut in 2009, of which some 230 would be food sellers.
Is the Super Volcano Beneath Yellowstone Ready to Blow?
The Yellowstone Volcano could erupt with 10,000 times the force of the explosion at Mount. St. Helens in 1980. (Photo Courtesy of USGS and Alan Post)
About 4 miles beneath Yellowstone National Park's beautiful scenery is a forty-mile-wide chamber full of molten rock under incredibly high pressure. This magma is what powers Yellowstone's fantastic geysers and hot springs, but is it about to erupt in a cataclysmic explosion that will decimate the western United States and push mankind to the brink of extinction?
Yellowstone is the crown jewel of the United States national park system. Its mountain vistas, wildlife and geographic features are visited and admired by people from around the world. More than any of those, however, it's the park's thermo-geological features that make it unlike any other part of the globe. No place on earth has as many steam vents, hot springs and active geysers as Yellowstone.
To create these features requires two elements in abundance: lots of water and lots of heat. The water is provided by the generous rain and snow the region gets. The heat comes from deep inside the earth: volcanic heat. Though you might not be able to tell from just looking at it, Yellowstone National Park is built on an ancient volcano. Not just a regular volcano, either. It lays on top of what some people have started to call a "super volcano."
Super Volcanos
There is no exact definition for a super volcano, but the term is often used to refer to volcanos that have produced exceptionally large eruptions in the past. When one of these large eruptions occurs, a huge amount of material is blasted out of the super volcano, leaving a giant crater or caldera. Such a caldera can be as much as forty or fifty miles wide. At Yellowstone, the caldera is so big that it includes a fair amount of the entire park. In fact, it is so big that scientists confirmed that the region had a caldera by looking at photographs from space.
Since there is no firm definition of what a super volcano is, it's hard to say how many of them are found on the earth. Usually people list Long Valley in eastern California and Taupo in New Zealand as super volcano sites along with Yellowstone. The last known explosion of what might be considered a super volcano was Toba in Indonesia. Toba erupted with a titanic explosion about 74,000 years ago. The force of the explosion was estimated to be 10,000 more powerful than the blast that destroyed Mount St. Helens, in Washington. Tremendous amounts of rock and ash were ejected into the air, blocking the sun for months. The temperature around the globe was thought to have plummeted as much as 21 degrees. Perhaps as much as 75% of plant life on the North American continent may died out.
| Old Faithful geyser, as well as Yellowstone's other geothermal wonders, is powered by the heart of one of the most powerful volcanos on Earth. (Copyright Lee Krystek, 2000) |
A super volcano differs from a regular volcano in that there is often no mountain peak associated with it. In a regular volcano hot magma under pressure flows up from the depths of the earth. A hole forms in the surface and the magma, now lava, pours out. As it cools, it forms a cone that eventually builds up into a mountain. If the passage is blocked off, the pressure can build up in the mountaintop and explode with a monstrous force. That's what happened at Mount St. Helens. The pit formed by the explosion becomes the new caldera.
In a super volcano the magma is blocked from ever reaching the surface. Instead, the pressure just builds and builds until more and more rock in the area melts and becomes magma too. The area under the surface becomes one huge underground sea of semi-molton rock. Finally, the pressure becomes too much to hold back and the entire surface above the underground chamber, which can be many miles wide, is blown away by a titanic explosion that can be thousands of times more powerful than that of a regular volcano.
Yellowstone's Catastrophic Eruption
This last happened at the Yellowstone volcano approximately 650,000 years ago. The caldera that it left is 53 miles long and 28 miles wide. In the area surrounding Yellowstone, 3000 square miles were subjected to a flow of pyroclastic material composed of 240 cubic miles of hot ash and pumice. Ash was also thrown into the atmosphere and blanketed much of North America. It can still be identified in core samples from as far away as the Gulf of Mexico.
Since this occurred more than a half million years ago this is all ancient history, right? Not quite. Yellowstone continues to be geologically active even today. Smaller explosions caused by hydrothermal activity (water or steam heated in an underground chamber until the top blows off) have been much more common and recent in Yellowstone's history than the massive caldera-forming eruptions. One of these happened as recently as 13,000 years ago, creating a three-mile wide crater that is now a portion of Yellowstone Lake called Mary Bay. Also, smaller volcanic eruptions with flows of lava, ash and pumice have occurred. Flows like these have filled in much of the old caldera since its creation.
Another catastrophic eruption is also possible. The effects of such a disaster are hard to even comprehend. Bill McGuire, professor of geohazards at the Benfield Greig Hazard Research Centre at the University College of London told the UK Daily Express, "Magma would be flung 50 kilometers into the atmosphere. Within a thousand kilometers virtually all life would be killed by falling ash, lava flows and the sheer explosive force of the eruption. One thousand cubic kilometers of lava would pour out of the volcano, enough to coat the whole USA with a layer 5 inches thick." He adds that it would once again bring "the bitter cold of Volcanic Winter to Planet Earth. Mankind may become extinct."
Reasons to Worry?
Scientists have known about Yellowstone's explosive history for quite some time, but events in the fall of 2003 suddenly had people concerned about the possibility of another massive explosion.
| Areas of the Norris Geyser basin have been closed due to unusual activity. |
In August of 2003 a new high-resolution sonar map of the bottom of Yellowstone Lake showed a bulge, or "inflated plain" there that was 2000 feet long and 100 feet high. Was it being pushed up by hydrothermal or even volcanic forces?
At about the same time there were some unusual changes at Norris Geyser basin some 20 miles north of the lake. Areas formally dry suddenly had hot springs. Other hot springs dried up. A long dormant geyser became active and forced the closing of some of the trails through the basin.
Rumors also spread that the land near the center of the Yellowstone caldera has been rising, perhaps a sign that the humongous magma chamber below was about to blow.
Some amateur geologists connected these events with the history of the Yellowstone volcano and came to some troubling conclusions: The catastrophic caldera making eruptions have occurred. at 2.1 million, 1.3 million and 650,000 years ago. Was another one about to happen? Was the next explosion overdue?
Interest in these developments quickly mounted. Several Internet sites sprang up predicting another explosion very soon and suggesting that the only way to avoid such a disaster was to drill holes into the magma chamber to release the pressure.
Conditions Normal
As fascinating as the history of Yellowstone volcano is, however, most professional geologists who study the site are not concerned that the park is on the brink of a catastrophic eruption. The bulge on the bottom of the lake may have been there for thousands of years, but not noticed until the recent survey. Changes in the geyser activity is not unusual. New geysers have appeared throughout the history of the park, while others go dormant. Rangers often shut down parts of trails or alter them as needed.
The land near the center of the caldera did rise more than three feet between 1923 and 1985. However, between 1985 and 1992 it actually subsided six inches. Studies of the shorelines of Yellowstone Lake have led scientists to believe this is a regular phenomenon. The caldera floor has risen and fallen at least three times in the last 10,000 years, moving as far as 65 feet.
The idea that Yellowstone may be "overdue" is also faulty. With only three catastrophic eruptions and two intervals between to go on there is not enough data to say that another one should be occurring in the near future.
Even if there was, there is little mankind could do about it. Drilling into the magma chamber to release pressure, as some have suggested, would be impractical and ineffective. The material in the chamber has the consistency of a sponge and any "hole" opened up to the surface would quickly seal as the molten rock crept up and cooled.
The Sleeping Dragon
That doesn't mean that there isn't (as one scientist put it) a proverbial giant dragon sleeping under Yellowstone. It may well one day awake and lay waste to much of the western United States. The Yellowstone Volcano Observatory, however, watches the park carefully and analyzes the continuous geological changes occurring in the region. It is likely that the imminent threat of another catastrophic explosion would not go unnoticed by their modern instruments. So far, however, activity is business-as-usual at the park.
Still, the super volcano at Yellowstone, and its kin around the world are a credible threat to man. Even the United States Geological Survey, usually conservative about such matters, admits that should a major eruption occur the results would have "global consequences that are beyond human experience and impossible to anticipate fully."
| |
A Partial Bibliography
Yellowstone: Restless Volcanic Giant, by Daniel Dzurisin, Robert L. Christiansen, and Kenneth L. Pierce, USGS Report, http://vulcan.wr.usgs.gov/Volcanoes/Yellowstone/OFR95-59/OFR95-59.html, 1995.
Yellowstone Volcano Observatory Future Volcanic Activity FAQ, http://vulcan.wr.usgs.gov/yvo/faqs4.html, 1995.
A Monster Awakens?, by Ian Gurney, Online Journal, http://www.onlinejournal.com/Special_Reports/091103Gurney/091103gurney.html. September 11, 2003.
Scientists' Interest Bubbling, by Scott Canon, Knight Ridder News Service/Philadephia Inquirer, November 27, 2003
Saturday, 3 January 2009
In pictures: Conflict in Gaza
Israel has intensified its military offensive against Hamas in Gaza, a week after launching air strikes on targets across the territory.
As air strikes on Gaza continued, more buildings were damaged and at least 10 people were killed when a mosque was hit, local medics said.
Here, a Palestinian photographs an unexploded Israeli bomb, which landed in a house.
The continuing violence has prompted anti-Israeli protests around the world. In central London demonstrators symbolically threw shoes at the British prime minister's residence...
... while in northern Israel, thousands of Israeli Arabs marched in protest against Israel's military action.
However, at a demonstration in Tel Aviv, Israelis waved their nation's flag and chanted anti-Hamas slogans.
Israeli troops 'move into Gaza'
Israeli ground troops have started to enter the Gaza Strip, Israeli military officials have confirmed, a week after the offensive against Hamas began.
against launching a ground offensive
An Israeli military spokeswoman said the intention was to "take control" of areas from which Palestinian militants have been firing rockets into Israel.
A BBC reporter in Gaza says it appears to be a limited operation with 10 to 15 vehicles crossing the northern border.
Earlier, Israel intensified air and artillery attacks on the territory.
In one raid, at least 13 people were killed when a missile struck a crowded mosque in Beit Lahiya, Palestinian medics said.
Witnesses said more than 200 people had been inside the Ibrahim al-Maqadna mosque for evening prayers when it was struck.
Palestinian medics and Hamas officials said they believed dozens were injured. At least one child was among the dead, they added.
Militants in Gaza meanwhile fired more rockets into southern Israel on Saturday, one of which hit the port of Ashdod, injuring two people.NY Times: Business Owners Hiring Mercenaries as Police Budgets Cut
In Oakland, Private Force May Be Hired for Security In a basement office that serves as a police headquarters and community center, Oakland ...
-
ABC News Israeli air strike on Gaza kills Palestinian AFP - 54 minutes ago GAZA CITY (AFP) - Israeli forces have killed one Palestinian and...
-
In Oakland, Private Force May Be Hired for Security In a basement office that serves as a police headquarters and community center, Oakland ...
-
The British government faces an excruciating choice. It cannot let Royal Bank of Scotland and its fellow mega-banks go to the wall. Yet ...