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-- Posted Wednesday, 25 August 2004 | Digg This Article
The title of Leo Tolstoy’s epic tome "War and Peace" encapsulates in just three words, two of the great polarities of human existence. Periodically, nations or ethnic or religious groups find an excuse to go to war with other nations or ethnic or religious groups, the result of which is a reduction in the population and widespread destruction. Economic, social and technological advance, which might be thought to improve matters, and break mankind out of this cycle do not, because the primal nature of man remains the same as it has been for thousands of years – biological evolution is a slow process. The argument that technological advance makes wars less likely is demonstrated to be a fallacy by the occurrence of the 2nd World War, which happened not long after the development of the aircraft, radio and television, among other things. These new technologies were simply exploited in the war effort, the aircraft being used to bomb cities flat and even nuke them, and the radio being used to disseminate propaganda. The great Russian economist Nikolai Kondratieff developed a theory which illustrated that the cycles of war and peace synchronize with and are related to the inevitable boom and bust cycles that occur in capitalist economies, and to the collective psychology that prevails among the population during different stages of the cycle. A graphic of the Kondratieff cycle is shown below. 
On this chart we can see that the lows in the Kondratieff cycle occur about every 50 to 60 years, and are accompanied by a deflationary depression. These cyclical lows are then followed, after an interval of some years, by major wars, which, although resulting in the death of millions, appear to have a stimulating effect on the economy. As is plainly obvious on this chart, we are now due - overdue - a cyclical trough, meaning a deflationary depression.
Although we have not yet plunged into the trough of a depression, it is fascinating to observe the changes in collective psychology, particularly in the United States, associated with the down part of the cycle. The United States is already in the grip of a collective psychosis over terrorism, and, as the economy deteriorates, this promises to get a lot worse. What’s going on? Why the apparent mismatch between the economy (here we are referring specifically to the United States) and the prevailing psychology of the nation? The answer is simple. The economy is on steroids. Greenspan and the Fed have decided to attempt to override the natural economic cycles by means of an unprecedented expansion of credit and explosion of the money supply, which are already manifesting as inflation that is expected to worsen considerably, possibly developing into hyperinflation, before the inevitable deflationary implosion. There can be only one outcome resulting from such hubris – financial disaster. Since one has to assume that these people have the intelligence to realize that this is so, it begs the question "Why are they doing this – what are their motives?" The straightforward answer is that they are propping up the economy long enough to get the Republican Neocons re-elected, but even if that were true would they really want to have to be the ones to sort out the mess resulting from all this? It’s an unanswered question – but I know that some writers are of the view that the reason that they are doing it is to deliberately collapse the economy, mop up all unsecured assets on the cheap, and snare an indebted population, who will thereafter effectively be indentured serfs. We have just lived through a “golden age”, and by this I am not referring to the metal. The years since the 2nd World War have been an era of unprecedented growth, prosperity, quality of life and standard of living for many millions of citizens of the western world especially. Many older readers will be able to reflect on decades of "the good life", certainly compared with what our ancestors had to put up with. Sadly, all that is starting to change, ironically just as the fruits of technology reach their zenith. Already we are seeing the “blood and treasure” of the United States being siphoned off for the pursuit of military adventures. Over 500 young soldiers have died in Iraq. About 20,000 people in Afghanistan and Iraq, most of whom were not guilty of anything, have been killed. American readers no doubt remember Bush asking Congress for another $87 billion for the War on Terror some months ago. When I watched him on television I immediately interpreted his words as "I am going to take another $87 billion of your hard-earned money, and take it out into the street and stuff it straight down the drain". The folks in Middle America, many of whom have a fairly simple outlook on life, love it, to judge from the opinion polls. An external enemy has been identified, the terrorists, on whom they can project all their own negativity, and this enemy can now be wiped out. Bush’s black-and-white "You’re either with us or against us" mentality strikes a chord with these people. Be honest, isn’t it fun, when you’re sat on a bar stool in some small mid-western town with a Bud or a Coors, the old country music playing, watching things exploding in the mid-east on the telly in the corner? The only problem is that, given the stage we are at in the cycle, these conflicts promise to get a lot worse, and, with conscription already in the pipeline for after the election, some folks you know, friends, neighbours, maybe even family, are going to be coming back in body bags. How are you going to feel about Bush and the Neocons then? About a week ago there was an announcement that the military bases in Germany and South Korea are to be closed. I thought it was a nice touch, especially ahead of the election, when Bush appeared on TV and said that it would "enable servicemen to spend time with their families". All I can say is "enjoy your time at home lads, and while you’re there, get the old school atlas down from the bookshelf and find Iran and Saudi Arabia – you may notice that they’re even further away than Germany and South Korea." It is sad though, the loss of income to Germany, and the soldiers will lose out too, chatting up the Frauleins and perfecting your table tennis sure beats dodging sniper fire in temperatures of 120°F. If you are an intellectual in the US don’t think your vote is going to make any difference. Bush doesn’t need your vote - there are plenty of clods around to cancel out the votes of anyone with even a glimmer of original thought. I had to laugh, there was someone jumping around on the box with a placard that read "every vote counts". Oh sure it does, in a two party duopoly where the same plutocrats control both parties and are in the driving seat whoever gets in. Perhaps that is not entirely true, however, since apparently some 45 million voters will have the possibility to vote electronically in the forthcoming election, opening up the opportunity in marginal states for their votes to be toggled "en masse" to the other party – this is surely more efficient than manually barring an individual voter from voting for having a conviction for sleeping on a park bench in the 1950’s, as happened in Florida in 2000. There was a highly amusing story in the Rocky Mountain News some days back about a company involved in the manufacture of electronic voting machines making sizeable donations to the GOP - it’s amazing what you can do with software these days, isn’t it? Let’s see now, who else could you vote for apart from the two main parties? Well, there’s Ralph Nader. I don’t know if he’s still around, but his principal purpose last time appeared to be to weaken the Democratic vote, to great effect, as it turned out. It’s a free country, right? – so why not run for President yourself? – if you’re thinking of it you’d better get moving – all you need is a spare $200 million for negative advertising campaigns and to jet you and your entourage around the country, and the backing of at least 50 large corporations, easily obtained by promising, only verbally of course, to route large contracts in their direction. Nothing I write, or anyone else writes is going to stop what’s coming. These major cycles are unstoppable because, collectively, human beings do not learn from history. All those who experienced the depression of the 30’s and the build-up to the 2nd World War, with the rise of the Nazi regime, and who have for years acted as a guiding and moderating influence, are now dying off through old age, and it would appear that succeeding generations are going to have to learn about these things not from history books, for they don’t read, but from direct experience. The military-industrial complex of the US, awesome in its power, which controls the country, owns both political parties, and manipulates the limited thought processes of the masses through a centralized, syndicated media, stands to make colossal amounts of money out of the forthcoming mess and mayhem. Anyone who has read the Isaac Asimov classic "Nightfall One" is well placed to understand the grim inevitability of what’s coming down the pipe. In this story, a civilization self-destructs every twenty thousand years. The planet has a double star and once every twenty thousand years the moons of the planet line up in such a way as to eclipse both suns, which is the only time the planet experiences total darkness. This drives the citizens crazy with fear and they go berserk and wreck everything. Towards the end of one cycle a lone astronomer in an isolated observatory discovers that it’s just an eclipse and tries to tell the population that there’s nothing to worry about, that it will pass, but it’s to no avail – they go berserk and wreck everything. What would have been a deep recession, or a run-of-the-mill depression in the US, and has been staved off until now, threatens to assert itself, with devastating force, as a full-blown depression within the next 3 years. Things are expected to go downhill fast next year and especially in 2005. The effects of this on other countries around the world will vary, depending on the structure of their economies. Countries such as Britain, which is a debt-wracked, credit driven economy like the US, will be among the hardest hit. Some people reading this may think that I am a pessimist, or even a cynic, but this is not so. I consider myself to be a realist. In actual fact, you could even call me an optimist, a REAL optimist because I try to look for the good in any situation. In the scenario I have painted there is something to be optimistic about, at least financially speaking, and that is the potential of precious metals and PM stocks as investment vehicles. On the social level, when people are stripped of their assets, they will have time to chat to their neighbours and will get together to help each other out. There will doubtless be some wonderful social interaction at the soup kitchens. If you are a reader in the US my advice to you is as follows: get out of debt as quickly as possible, accumulate precious metals and PM stocks on weakness, enjoy the good times while they last – the party is still going on for many, even if it is on credit, be vigilant and don’t take things at face value, and lastly, try to keep a sense of humor. In the next essay we will be looking at the real reasons for the War on Terror. The Kondratieff Wave chart used in this article was obtained from the website www.kwaves.com where it illustrates an informative and well-presented page about Nikolai Kondratieff which is recommended to interested readers.
-- Posted Wednesday, 25 August 2004 | Digg This Article
Web-Site: CliveMaund.com
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