Surviving Financial Apocalypse Now

Image via Wikipedia

Doug Casey on Surviving Financial Apocalypse Now
"One of the disturbing facts of history is that so many civilizations collapse," warns anthropologist Jared Diamond in Collapse: How Societies Choose to Fail or Succeed. Many "civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power."

Now, Harvard's Niall Ferguson, one of the world's leading financial historians, echoes Diamond's warning: "Imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice." Yes, America is on the edge.

Dismiss his warning at your peril. Everything you learned, everything you believe and everything driving our political leaders is based on a misleading, outdated theory of history. The American Empire is at the edge of a dangerous precipice, at risk of a sudden, rapid collapse.

Ferguson is brilliant, prolific and contrarian. His works include the recent Ascent of Money: A Financial History of the World; The Cash Nexus: Money and Power in the Modern World; Colossus: The Rise and Fall of The American Empire; and The War of the World, a survey of the "savagery of the 20th century" where he highlights a profound "paradox that, though the 20th century was 'so bloody,' it was also 'a time of unparalleled progress.'"

Why? Throughout history imperial leaders inevitably emerge and drive their nations into wars for greater glory and "economic progress," while inevitably leading their nation into collapse. And that happens suddenly and swiftly, within "a decade or two."

You'll find Ferguson's latest work, Collapse and Complexity: Empires on the Edge of Chaos, in Foreign Affairs, the journal of the Council of Foreign Relations, a nonpartisan think tank. His message negates all the happy talk you're hearing in today's news – about economic recovery and new bull markets, about "hope," about a return to "American greatness" – from Washington politicians and Wall Street bankers.

'Collapse of All Empires:' 5 stages repeating through the ages

Ferguson opens with a fascinating metaphor: "There is no better illustration of the life cycle of a great power than 'The Course of Empire,' a series of five paintings by Thomas Cole that hangs in the New York Historical Society. Cole was a founder of the Hudson River School and one of the pioneers of nineteenth-century American landscape painting; in 'The Course of Empire,' he beautifully captured a theory of imperial rise and fall to which most people remain in thrall to this day. Each of the five imagined scenes depicts the mouth of a great river beneath a rocky outcrop."

If you're unable to see them at the historical society, they're all reproduced in Foreign Affairs, underscoring Ferguson's warnings that the "American Empire on the precipice," near collapse.

First. 'The Savage State,' before the Empire rises

"In the first, 'The Savage State,' a lush wilderness is populated by a handful of hunter-gatherers eking out a primitive existence at the break of a stormy dawn." Imagine our history from Columbus' discovery of America in 1492 on through four more centuries as we savagely expanded across the continent.

Second. 'The Arcadian or Pastoral State,' as the American Empire flourishes

"The second picture, 'The Arcadian or Pastoral State,' is of an agrarian idyll: the inhabitants have cleared the trees, planted fields, and built an elegant Greek temple." The temple may seem out of place. However, Cole's paintings were done in 1833–1836, not long after Thomas Jefferson built the University of Virginia using classical Greek and Roman revival architecture.

As Ferguson continues the tour you sense you're actually inside the New York Historical Society, visually reminded of how history's great cycles do indeed repeat over and over. You are also reminded of one of history's great tragic ironies – that all nations fail to learn the lessons of history, that all nations and their leaders fall prey to their own narcissistic hubris and that all eventually collapse from within.

Third. Consummation of the American Empire

"The third and largest of the paintings is 'The Consummation of Empire.' Now, the landscape is covered by a magnificent marble entrepôt, and the contented farmer-philosophers of the previous tableau have been replaced by a throng of opulently clad merchants, proconsuls and citizen-consumers. It is midday in the life cycle."

Read the rest of the article