Why the Economy's Cratering, Or Welcome to the Great Extinction Depression
See That? That's an Industrial Economy Dying Because It Killed the Planet
Stock market crashing. Currencies cratering. Prices skyrocketing. Right about now, you're probably wondering: what the aitch is wrong with the economy? And how am I going to make it?
I'm going to teach you what's wrong with the economy, and it's not going to be pretty. We'll cover, by the end, though, a few tips to help get you through this. It's going to be a difficult time — and it's only just begun. No, it's not magically going to go away — and what our institutions are doing to fight it is a cure worse than the disease itself, unfortunately, as I'll gently explain.
You might be wondering what's happening to the economy. This is what happens when an industrial economy runs out of planet. Of life to consume and exploit and degrade. It begins to die, right along with everything else. That's what's really happening to ours, behind the oft superficial headlines.
Welcome to the Great Depression of the Age of Extinction. Or, if you like, the Extinction Depression.
This economic era — the one now suddenly, viciously dawning — is beginning with stagflation. What's "stagflation"? You've heard the term bandied about casually, I'm sure, but few really understand it well. Stagflation — the deadly combination of inflation plus stagnation — is like what we used to call, not so many years ago, "freak weather." Tornadoes, where they'd never happened before, megastorms, megafires — strange and novel catastrophes befalling us. But of course "freak weather" is abjectly ordinary now — how hot is it where you are? In parts of Europe, it's going to be 45 degrees Celsius.
Stagflation is like that. It is here to teach us that a new economic age is now dawning, and it's not going to be a pretty one. It may well make the Great Depression look like child's play. Why do I say that? (Do I "exaggerate"? LOL. Sigh. Go ahead, read the archives, and find a single time my economic forecasts have been wrong. They're not, because I've studied this stuff to death. When I said America would collapse, a decade ago, that too was called exag…you know the story.)
Stagflation isn't just "inflation plus stagnation." It's the deadly spiral of them both. Inflation feeds into stagnation, stagnation feeds into inflation. And before you know it, economies are caught in a deadly spider's web: prices are rising, but real incomes aren't, at least not nearly fast enough to keep pace. How bad is it already? In the US and UK, real incomes have fallen about 4–5% just in the last year. Now imagine that stretching out over five years. Ten. You begin to see how deadly stagflation really is.
So what's the cause? Many people imagine they know the cause. They read these dumb articles in the WSJ or whatnot by people who don't actually know economics, and so this chain of ignorance is created. You know how every dude of a certain kind will lecture you about "free markets" and "wealth trickling down"…just because some crackpot, some pundit, who doesn't know any actual economics either, said so? This isn't economics, these are fairy tales in disguise.
Many people think they know what's going on here, and they blame it on "increased demand" now that the "pandemic's over." LOL — neither of those things are true. It's hardly as if people are going out and suddenly buying Maseratis with all the jackpots of money they suddenly have. They're just trying to make ends meet, and they're spending more than ever, because basics — food, water, energy — cost more than ever. The cause of stagflation isn't some glorious spike in demand — have you seen how little money everyone under the age of 45 or so has? LOL — give me a break. So what is it?
Let me put it to you so simply that even a child could grasp it. Here's a civilization. It consumes too much, so much that its planet is now dying. The planet which supplies it with all its basics, the daily necessities of life. See? Simple.
What happens to that civilization, economically? Stagflation does. To begin with. And then depression does.
Why? Well, just think of what happens as basic resources run out — water, food, medicine, clean air, as systems break down, and can't provide necessities anymore. Like, say, baby formula and tampons. Prices skyrocket — and shortages are their accomplice.
That's simple economics 101.
It's what called a "supply shock." And we are currently about to experience the greatest supply shock in human history. Imagine the little jolt you get opening the door on a hot day, sometimes — and then imagine the massive shockwave that rips the earth apart after tectonic plates shift. It's that different from what we're used to.
Our Planet Is Dying. I don't mean that in the childish sense — "everything will die forever, and Earth will be Mars!!" Nope. But our planet — the one made of a set of ecologies, systems, chains of life, oceans, rivers, forests, entire taxa of species which have existed since we human beings emerged from a rift in a valley 300,000 years ago — that one is most certainly dying. We are in the sixth mass extinction in all of deep history — hundreds of millions of years of it. The last few took thousands of years, sometimes tens of thousands of years, for the planet to warm up by just a few degrees. We've done that much in about twenty five.
You can see how insanely, crazily dangerous the course we're on is, maybe.
We are at the leading edge of the greatest economic shockwave in human history. The only parallels are premodern civilizations which suddenly faced small-scale ecological shifts. They overgrazed their livestock, or cut down all their trees, or maybe, thanks to five seasons of drought in a row, just couldn't survive. Humanity as a whole has never experienced what is beginning to happen now. Extinction.
What does extinction mean in economic terms? It's simple, grim, and should fill any sane person with a sense of grief, too. As life on our planet continues to die off, so too the very necessities we depend on become scarcer and scarcer. Not just the examples I've already given you — water, energy, food, all of whose prices have already skyrocketed. But everything. Paper. Steel. Plastic. Rubber. Sugar. Coffee. Cotton.
Go open a cupboard, a pantry, a closet. Take a careful look at everything in it. Everything you take for granted. Think of how varied and disparate all those raw materials really are. Think of the fertilizer and water and oil and gas it takes to grow those crops, or how much it takes to nourish all that livestock — right down to the cotton hanging in your wardrobe, or the leather shoes below it.
All that stuff. All of it. It comes from what we call the "commodities" of a dying planet. That's how careless, cruel, and indifferent we really are as a civilization. How little respect we have for the world which created us, and still gives us life. Commodity.
Why is the stock market crashing? Is it just one of those sudden random scares? Nope. On a dying planet, it makes a whole lot more sense to own commodities than it does to own stocks, at least if profit is your goal. That's because commodities are starting to become scarcer, and that trend will never stop. At least not until much later in human history, when civilization reinvents itself.
If you think I'm kidding, check out this chart we used a few days ago. It explains how rising prices aren't driven by "supply chain issues" or any such thing anymore, really. They are happening because our systems are failing, as our planet is dying . And as a result, things as basic as harvests for coffee, sugar, cotton aren't what they used to be.
And they never will be again. We have changed the planet permanently. The new one that's emerging will have far, far less habitable landmass — and zones of fertility. It will be ringed by Fire Belts and Flood Belts and Drought and Famine and Plague Belts. The harvests are never coming back. At least not until we figure out how to live well again on the planet we killed, or whatever we call the scorched one rising from its ashes.
Let me give you another example of why this will be the greatest shockwave in human history. I read a very, very interesting article recently about…slime. LOL, no, I'm not four years old. The researchers discovered that one way mass extinctions accelerate themselves is that huge blooms of slime emerge. They cover oceans and rivers. They make them anoxic so no life can survive. They literally poison the waters of the earth. What triggers these…killer slime blooms? Rising temperatures do.
It's a certainty that this will happen again at some temperature — we just don't know when, exactly. But imagine that it does happen. What happens to…all the stuff we depend on oceans and rivers for? Drinking water, water which cools our factories, water for manufacturing stuff with. All the marine life we consume. Which happens first — a river that nourishes a hundred million people dries up, or it turns toxic with slime?
Now think of the economics of all that. The river irrigates the plants which grow the cotton that makes up the…sheets on your bed, the clothes in your wardrobe, the bandages in your medicine cabinet, the filters in your coffee machine, the…tampons nobody can suddenly get. Bang. Prices skyrocket.
And this is just one "commodity" I've given you an example of. We could keep going. What happens if…but I think you grasp the point.
What happens to a civilization that's consumed so much, without replenishing or nourishing enough, that it killed its planet? Caused the fastest extinction in all of deep history? Let me put that another way. What's the economy of a civilization on a dying planet?
Depression is. The stagflation we're experiencing now is a precursor. It's just the warm-up for the main event. Where this ends is depression. The Greater Depression.
Again, it's not hard to imagine why. What happens as the planet goes on dying? Well, huge, huge numbers of people have to flee, as habitable landmass shrinks. Flee drowning, burning countries, famine and drought, war and disease. They will head to richer nations or highlands or both. But of course when nations burn and sink and drown…their economies go up in smoke, too. All those jobs, livelihoods, careers — poof, suddenly gone.
And as raw materials become harder to attain, harvest, distribute, source, get — bang, there go wave after wave of jobs, too. Who's a cotton farmer when the soil is dead? Who farms livestock when the river runs dry? Cattle are already dying in the thousands in Kansas because of heat and humidity. Farmers are killing themselves in droves — for a brutal and terrible reason. Their future has run out. But their deaths are a warning to us about what is come for all of us. Our future is running out. They just lived it first.
A huge, huge hole is created in the economy this way. Factories shutter, and centralized down to the last few viable locations. Entire sectors vanish. Jobs are hard to come by — and good ones are like winning the jackpot in the lottery. Unemployment and underemployment become the new normal. How many young people do you know — talented, highly educated ones, whose lives are going nowhere? Meanwhile, the rich and ruthless find ways to monopolize what's left of a dying planet's dwindling resources — and profiteer in psychopathologically insane ways from it. How much richer did Bezos and Gates and etcetera get during the pandemic? Enough to have ended…you pick..world hunger…educate every child on earth…cancel everyone's student debt…give everyone on this planet healthcare…an endless list. Guess what they did?
Keep the money.
LOL.
A civilization on a dying planet — a civilization that's killed its planet — it doesn't go on merrily booming. This is a weird delusion that pundits labour under — and seem to have transmitted to the average person, who appears to be shocked that things are going terribly economically. It's not some kind of coincidence.
Dying planet? Dying economy. Civilization on dying planets run out of resources, and resources are what we use to make, produce, manufacture, distribute, eat, drink, breathe, learn, live. Fewer and fewer resources means everything from fewer and fewer jobs to fewer and fewer opportunities to less and less savings to littler and less happiness, social bonds, trust, the democracy that's built from them, to more and more frequent crashes and recessions, to greater and greater risk borne on the shoulders of the average person, to less and less real income for everyone. Until all of that is all there is left. And just like "freak weather," we now live in a world where more and more people have never known anything else.
The economics of extinction? Simple. Shock. Depression. Like never before in modern history. Doesn't it feel like we're moving in backwards in time now? That's because, my friends, we are getting poorer. And when people suddenly grow poorer, this is what happens. Fascism, war, superstition, hate, rage. This is what we wrought.
We didn't just kill a planet. In what our progeny will remember as the ultimate act of folly…we took our civilization with it.
Umair
June 2022
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