October 31, 2020
initiated a socioeconomic chain reaction
that has only begun to play out.
This story has a silver lining;
a chance to make the world a better place.
But it has to start with an honest assessment
of how we got here,
and point to a positive course of action...
Credible economists warning that a banking crisis, a sovereign debt crisis and ultimately a monetary crisis were on the horizon. Prominent researchers projecting more riots and unrest and potentially a civil war.
And world leaders warning that military conflict between the United States and China “was no longer inconceivable”.
Then of course we had the COVID-19 debacle. Though the ‘authorities' would blame the disease itself, it was their ill-conceived response that actually served as the catalyst.
Their short sighted policies initiated a chain reaction. Some consequences of this chain reaction are inevitable (like a bullet that has left the barrel of a gun). Others hang in the balance. There will not, however, be any going back to normal.
This story has a silver lining; a chance to make the world a better place. But it has to start with an honest assessment of how we got here, and point to a positive course of action.
In the winter of 2020 as COVID-19 went exponential a panic was spreading even faster.
The public accepted these policies at first because they were led to believe they would only last a few weeks.
At best they would slow or delay the spread. And at what cost?
Those who hatched this plan had made no provision for a pandemic that would linger on for months or years. They didn't even account for the socioeconomic chain reaction that the first round of lock downs would set in motion.
With businesses shuttered and movement highly restricted, millions were left unemployed virtually overnight. The scale and speed of these job losses broke all previous records. Even the great depression didn't come close.
By the summer of 2020 flash points of violence and social unrest were flaring up in cities around the world. Pent up frustrations were building, for obvious reasons. Billions of people had just spent months locked in their houses.
Most stress relieving activities had been banned: social gatherings, sports, time with friends at restaurants or bars… even places of worship were restricted. This was a powder keg waiting for a match.
Politicians obviously saw the danger in this equation. When millions of people are suddenly left hungry and homeless that's a recipe for revolution. Something had to be done, and quickly. So they did something. Boy did they do something.
When all you have is a hammer every problem looks like a nail, and the governments around the world were looking at a very, very large nail. The fiscal stimulus programs of 2020 were epic; absolutely off the charts. By June over 18 trillion had been disbursed globally.
Unemployment benefits were also expanded in many countries. In the United States for example unemployed workers were given an extra 600 dollars a week. This meant that many were earning more staying home than they had been on the job. In fact personal income in the United States soared by 10.5 percent in April; the largest monthly increase ever recorded.
Then there were the forgivable loans - via the paycheck protection program and similar schemes around the world - which were supposed to help prop up small businesses. Some of these loans ended up being extended to some rather strange small businesses.
You can't make this shit up.
These policies were obviously going to send national debts parabolic, but the reckoning would be delayed. At least for a little while.
Central banks played a critical role in this delayed reckoning.
As the historic stock market crash of February 2020 was unfolding, the Federal Reserve and their counterparts abroad were swinging their hammers in new and creative ways; injecting liquidity (aka money) into the system via asset markets.
If you've never heard of Quantitative Easing (or QE) you might want to look that up. The short version is that when central banks purchase assets new money is created.
The money that is transferred to the asset holders account is literally typed into existence. These asset holders typically reinvest this new money, causing asset prices (including the stocks) to rise. Poor people don't typically own these kinds of assets so it's basically welfare for the rich.
And while it's wonderful that we can provide a such a nice safety net for the upper crust of society it does have one little side effect: inflating markets with liquidity creates asset bubbles. It's like filling up a water balloon more and more… till its so big you can see through it. Sooner or later it always pops.
It also has the effect of increasing wealth inequality… but that's a feature not a bug.
The first round of QE started in 2009 after the housing bubble collapsed. Cutting interest rates to zero just wasn't enough. 2020 brought us round four (affectionately referred to by some as QE Infinity).
In this round the Fed would take their liquidity experiment to a whole new level; buying financial assets never touched during QE1, 2, or 3 including corporate debt and etfs.
In one month they purchased more assets than they had during the entire first year following the 2009 crisis.
By the end of May,
What could possibly go wrong?
With unemployment numbers still hovering at great depression levels and hopes of a quick, V-shaped recovery evaporating, all eyes were on governments and central banks. The question was not if there would be more stimulus and money printing, the real question was how big it would be this time.
Would it be enough? No one seemed to be asking what would happen if they went too far.
Our fearless leaders had painted themselves into a corner at this point. If unemployment benefits, mortgage forbearance and eviction moratoriums weren't extended, those in power would soon be facing millions of homeless, hungry and angry people.
With violence and unrest already smoldering in many major cities, this would be like throwing gasoline on a fire. Extending these protections however, would not be without a price.
Eviction moratoriums and mortgage forbearance programs had temporarily prevented millions from being suddenly made homeless. But with no rent coming in, landlords would soon be defaulting on mortgages en masse, as would many homeowners and businesses.
But as governments and central banks reached for bigger and bigger bailout hammers a monetary reckoning was rapidly approaching. And the Dollar's world reserve currency status was in play.
For decades the dollar's world reserve currency status had enabled Washington to run up its national debt at everyone else's expense, and punish any nation that didn't tow the line with unilateral sanctions (they even sanctioned the ICC for investigating war crimes committed by the U.S. military).
This era of exorbitant privilege, however, was coming to an end.
A growing hub of powerful countries had organizing behind the scenes for years; the groundwork for a currency insurrection was already laid.
Russia and China were the driving forces of this insurrection.
By July of 2020 China was already testing this new currency at scale.
It was only a matter of time before the digital yuan would be competing with the U.S. dollar globally.
It was this emerging threat to the dollar that motivated Washington to lash out in a series of desperate and ill conceived provocations. For example the Hong Kong Autonomy act, which the U.S. congress passed with a veto proof margin and was signed by Trump on July 14th, represented a serious escalation.
By imposing sanctions on any individual, company or bank which did business with Chinese officials enforcing the new security law, this legislation set the stage for Washington to cut China's access to the dollar; a move which would ultimately divide the world into Yuan and Dollar based currency blocs.
Spoiler alert: it doesn't end well for Uncle Sam.
These economic provocations were accompanied by multiple rounds of good old fashion saber rattling.
On July 13th, of 2020 when the Trump administration announced that the U.S. had decided to reject nearly all of China's claims in the South China Sea, what this really meant was that the U.S. was going to intentionally violate airspace and waters around the artificial islands China had built up in the disputed zone, essentially daring the Chinese to do something.
It's worth noting that by this time these islands were fully militarized and operational; complete with ports, runways and other facilities that gave the Chinese a clear strategic advantage.
At this stage the rest of the world was beginning to suspect that Uncle Sam was experiencing some form of cognitive decline. He wasn't playing four dimensional chess here. He didn't even seem to be playing with a full deck.
This was like a drunk guy poking a tiger with a stick (probably not going to end well).
The provocations would continue on multiple fronts: embassies ordered to close, Chinese companies sanctioned or banned from operating in the U.S. Anything and everything connected to China was open game.
China condemned each of these provocations but they didn't take the bait. Their response would come when was in their strategic interests. They would choose their own timing. If direct conflict could be averted long enough, the U.S. was likely to collapse on its own. The war could be won without firing a shot.
As often happens when a declining empire is faced with a ascending rival, the United States was rushing headlong into Thucydides trap.
Eeny, meeny, miny, mo...
Meanwhile back in the U.S. of A. the violence and mayhem in the streets was intensifying. Businesses, government buildings and vehicles had been burning virtually every night for months on end. Protesters and counter protesters were now bringing semiautomatic weapons to the scene.
By September there were multiple fatalities on each side.
Perception of these events was increasingly polarized. The left and the right were no long behaving like political factions of a nation. They had devolved into hostile tribes fighting for control of a territory.
A radicalized strain of thought that directly endorsed violence as a political tool was metastasizing among a new generation of activists. A growing contingent had convinced themselves that they could win in an armed conflict. This was a serious miscalculation.
(If you try to outgun the police and the military you're going to have a bad time).
Here humanity approached a crossroad. Probabilities were coalescing as the crisis progressed.
Those who saw the stakes would feel an urgency. With every moment of inaction the likelihood of a tragic ending increased. Something had to be done.
Some questions are best answered with a riddle.
Rather than predicting what comes next, let's tell a story. This story has multiple endings and you get to choose.
It's been said that every nation is three meals away from a revolution.
Never before had this principle been tested in so many countries simultaneously as it was in the 2020s.
At first many held onto the hope that everything would soon go back to normal, but as the long term realities of the decade set in, more and more people would come to the same startling conclusion: the ‘authorities' were out of their depth.
There was no exit strategy. The situation was not ‘under control'...
In the early stages of the crisis, when the first few governments were collapsing, very few realized how the conflux of economic, geopolitical and social variables were coalescing in a perfect storm.
But when G20 nations started dropping like flies the phenomenon it became impossible to ignore. Like dominoes falling, the collapse of one major economy destabilized every country connected to it. In the age of globalization very few would be spared.
What began as a trickle suddenly accelerated as the downfall of the U.S. dollar precipitated an unprecedented shock to global supply chains.
Imports ground to a halt all around the world. In countries dependent on outsourced food production and manufacturing this translated into widespread shortages and social unrest. In this environment extremist movements of all stripes flourished.
A small handful of nations would weather this storm peacefully. Rather than tearing themselves apart from within or transforming into totalitarian dictatorships, they would unify and adapt.
As economic and monetary shocks disrupted global supply chains and trade, these countries would quickly reorganize their economies to replace imports with local production - starting with food and essentials. Reducing dependence on fossil fuels was an important element of this transition.
To accomplish this feat every aspect of modern life was re-imagined.
Lawns were replaced by gardens; golf courses converted to orchards. Waste streams were recuperated to minimize losses. It wasn't easy, but these countries pulled through, and before the decade was over, they were building regional trade networks that hadn't existed before the crisis.
A lot of wealthy countries didn't do so well in the second phase of the crisis; the part where real hardship kicked in. Populations accustomed to easy living and constant entertainment had a very short fuse.
As shortages and rationing became the new normal and homeless encampments grew, protests would morph into riots, armed uprisings and civil wars.
Governments that were ill prepared for these challenges crumbled quickly; some into the hands of populist movements, others to military juntas. In most cases the replacement was more brutal and repressive that the old system.
The underlying paradigm was rarely questioned at all.
Many regimes would extend their lifespan by totalitarian means. Emergency powers established under lockdown would prove invaluable here. Policies previously justified by public health would now be implemented in the name of national security; control mechanisms adapted and repurposed to crack down on dissidents.
It was every petty dictator's wet dream: granular control over every aspect of human behavior and interaction. No one allowed to gather in public without permission. Every contact tracked and traced. If you're outside you better be prepared to show your papers.
This approach was most effective when the latent fears and hatreds of the population could be rallied against an enemy.
Regardless of which axis prevailed in these conflicts the result would be the same.
A new totalitarian order was the universal prescription; the only cure for the chaos.
The world's first truly global currency would replace the dollar. This currency would be completely digital; coins and bank notes phased out. Every single transaction conducted using this currency would be recorded on a block blockchain.
Unlike the original cryptocurrencies this blockchain was controlled by a central authority and monitored with AI. Economic privacy a thing of the past.
It was the holy grail of ruling elite, the precursor for global governance with teeth, but before they even had time to properly congratulate themselves, their house of cards was already catching wind.
As living conditions deteriorate, and fear and uncertainty prevail, certain psychological forces are always unleashed. These forces are like the incoming waves of a tsunami.
Once they gather momentum there can be no stopping them.
Throughout history there have been individuals and movements who rode these waves; channeling the tides of human sentiment towards a course of action. Though the science of crowd psychology is complex and nuanced, the application of its principles is mind bogglingly simple.
So simple in fact, that intellectuals typically recoil from them, while bonafide idiots wield them easily (and to great effect).
Like riding a tsunami on a surfboard, attempting to redirect the momentum of a society is highly dangerous.
The crowd can lift a leader to great heights, but one mistake can leave them hanging from a lamp post. Those who manage to navigate these forces usually guard the formula carefully. Failure to do so would threaten the foundations of their power.
This time around however, humanity flipped the script.
In the age of the internet the science of crowd psychology and color revolutions had been available to the public for some time now, but very few saw the utility in studying it.
However as the 2020s progressed, and it became more and it became more clear that that those in power were pushing civilization toward a dystopian nightmare, a contingent of activists would reverse engineer the tools being used against them.
The work of Gustave Le Bon and Edward Bernays would be modernized and tempered with a cultural code:
The instinctual psychology of species can be harnessed for good or for evil. In the modern era it has been weaponized by the military industrial complex for regime change, and by corporations for marketing and public relations.
The same principles however can applied to create rather than destroy. Visions and values can spread like viruses from mind to mind, and from place to place.
The contagion of a single idea can inspire generations towards a new paradigm.
To topple a government is surprisingly easy when conditions are right. Silver spoon politicians who've never served or worked a day in their life can easily lose the respect and obedience of military and law enforcement. When that happens, it's game over.
The question that always comes up in such events (usually as an afterthought) is what will you replace the old system with?
There is nothing more dangerous than armed men with utopian dreams. Sometimes the cure can be worse than the disease.
History provides many cautionary tales. To avoid the trap of oppressed rising up to become the oppressor the paradigm that facilitates this dynamic has to be questioned.
The vast majority of modern governments, businesses and organizations utilize a social structure called vertical collectivism. Vertical collectivism is top down system of organizing human groups which amplifies power by stacking layers of authority in pyramids.
The result is a highly stratified society where those on the bottom have little or no say, and are left to fight over scraps from above.
Vertical collectivism is apolitical. Capitalists companies and Communist regimes both use it without contradiction, as do republics that call themselves democracies.
The vertical model was born of military strategy. A general or warlord alone can only control a small army, but by using subordinate officers in layers of rank, a single individual, or a small ruling class can dominate millions of people and vast territories.
This is why a state is often defined as the monopoly on violence within a region.
Vertical collectivism didn't spread to every corner of the globe because it improved peoples lives.
In fact modern anthropologists acknowledge that the transition to this way of life was associated with reduced life expectancy and a decline in virtually all measures in health (up until very recently).
Vertical collectivism spread like a cancer because it is brutally effective in the in the context of war.
Every culture that it encountered was either crushed on the battlefield or forced to copy the model to survive. The dawn of civilization - as many euphemistically refer to it - is a story of conquest and colonialization that began approximately 10,000 years ago and continues to this day.
This was not however, the beginning of the human story.
For over 300,000 years - long before the first empires of Asia and Europe began to absorb surrounding tribes - humans organized themselves using a very different model.
Rather than building top down, stratified societies that concentrated wealth and power in the hands of an upper class, these cultures organized horizontally.
Organizing horizontally didn't mean that there were no leaders.
The leaders and councils responsible for group decisions were not insulated by armies and law enforcement conditioned to obey without question.
Defense and order were maintained by an armed citizenry, bound by a code of conduct. This dynamic forced leaders to be directly accountable to the population.
Their power was rooted in their ability to communicate with the people, build consensus and chart a course of action to the benefit of all.
The fact that horizontal societies required leaders to work with the public in such a personal way had one obvious disadvantage: it limited the size of the group. After all, why would someone voluntarily follow someone far away that they never met?
There is however, a way around this limitation. By forming federations horizontal societies can expand their sphere influence significantly.
An example of this adaptation can be found in the Iroquois confederacy which unified 5 tribes for hundreds of years in the region that came to be called New York.
Each member tribe in the confederacy had their own culture and and internal governance, but a set of shared values enabled them to cooperate economically and militarily. If one tribe was attacked they quickly mounted a common defense.
Many historians believe that United States federal system was based on the Iroquois model. One significant difference however, was that the Iroquois had no central government. There was a central council comprised of representatives from each tribe, but this council had no power to enforce its will.
Each representative was tasked with building a consensus that would resonate with their people.
A modernized adaptation of this Iroquois model gained traction in the mid 2020s as the gears of globalization ground to a halt. While governments proved incapable of solving the most basic problems, decentralized networks were replacing the system from the ground up.
They would start by organizing local food production in their communities and gradually expand cooperation to other sectors.
Their revolution was driven by an idea worth spreading. Not only was it possible to live on this planet without destroying it, this way of life was more abundant and fulfilling than the alternative. There was no need to wait for governments to act. Humans are perfectly capable of organizing themselves.
Those that succeeded became epicenters of a new renaissance; attracting skilled workers and artists from all around the world.
Some of these travelers would put down permanent roots.
From the ashes of dying cultures new cultures would rise.
The great collapse of the 2020s was not the end of the world.
Time to Flip the Script
Remember how we said this story has multiple endings?
We're going take one of them to a literal extreme; and we're going to do it in the real world.
Now if you're living in a crowded city center, maybe pushing the boundaries starts by planting a garden in your front yard, organizing a community compost, or speaking out against a war.
However it's important to understand that in the era we have entered the stakes are rising, and the trajectory we're on needs to be altered significantly.
This implies fundamental changes in the way we livRemember how we said this story has multiple endings? We're going take one of them to a literal extreme; and we're going to do it in the real world.
(Those who piece together the clues, get through the filters, and pass quarantine will at some point find themselves standing here. GPS COORDINATES FLASH)
Now if you're living in a crowded city center, maybe pushing the boundaries starts by planting a garden in your front yard, organizing a community compost, or speaking out against a war.
However it's important to understand that in the era we have entered the stakes are rising, and the trajectory we're on needs to be altered significantly. This implies fundamental changes in the way we live, not just gestures in right direction.
You have to decide what kind of story you and your family want to be a part of. In some cases this might involve immigrating to another country. Others will be more inclined to stay, and fight to change the outcome at home. One way or the other you'll want to be in a place where you can grow food, and you'll want to be set up to do this without agrochemical inputs or fossil fuels.
You also don't want to be reliant on the grid. Utilities can and will go down. Some will be shocked by how long they can stay down.
These aren't the kind of lifestyle changes you want to make at the last moment, or put off until you can do something large scale. Far better to start transitioning to a new way of life right now. Do what you can with what you have. Join forces with others to amplify.
The learning curve for this kind of transition can be steep. There are a lot of practical skills that we should be taught in school but aren't. Most kids when they graduate… don't know how to build a house, or grow a garden, or even how to make bread.
The best way to learn this stuff isn't really in a classroom anyway. People learn best by example, anchored with hands on experience.
That's why we built this place. You could think of it as an experiential learning center / maker space. This whole landscape is a laboratory.
Here we can put ideas to an extreme test.
Rather that just reading about this stuff or watching a presentation, volunteers and travelers from all over the world come here to do it themselves. They get their hands dirty in the field: planting plants, working with animals, building crazy structures like these.
They also get to experience first hand what it takes to self organize and live in a different way.
The experience is extreme, because the challenges we face are real. We're completely off-grid here. Our electricity comes from the sun. We have running water by pumping from the spring up to a tank on the hill. It's also up to us to us to maintain the road and drainage. Up here when there's a problem we have to put our heads together and find a way to solve it.
To put this in perspective, our first long term volunteer was here when we sustained a direct hit from hurricane Maria. He also assisted in the recovery and became part of the story.
Talk is cheap. If you really want to change the world you have to be able to show people how.
We're doing this here in the Commonwealth of Dominica cause these people are moving in the right direction, and their culture holds some of the keys to the solution.
But where ever you decide to make your stand now is the time to get serious about food security.
Our challenge in the next phase is to grow more and develop local production systems to replace imports.
Those who pay close attention and pause often will discover easter eggs; clues with consequences in the real world.
If you agree with the message, it's up to you to make it spread...