Dmitry Orlov: Predicting Collapse

Military, economic prowess can't stop America's inevitable ...

Below is a link an extremely informative podcast interview with Russian-American engineer and writer Dmitry Orlov.

After living through the Soviet collapse, Orlov identified five aspects of collapse for people to use as signposts to identify when the process had begun.*

Orlov clearly believes the collapse of the US empire has already begun. He asserts most Americans aren’t aware of it because they only believe what the TV tells them, ie that current problems of US are only temporary.

Orlov, who predicted imminent US collapse nearly a decade ago, points out the fulfillment of each of his predictions.

  1. Financial Collapse – early signs of runaway hyperinflation, with skyrocketing levels of money creation disguised as debt that will never be repaid. He also points to growing unwillingness of various countries, especially Russia and China, to accept the US dollar as currency.
  2. Commercial collapse – total unwillingness of businesses to invest in new factories.
  3. Political collapse – total corruption (and incompetence) of executive branch of federal government. This is reflected in major recent military losses (the interview preceded the hasty and undignified US exit from Afghanistan). At 10.00 min, he points to a recent announcement the US isn’t going to the moon (and never did, according to Orlov).**
  4. Social collapse – total breakdown of community and civil society, ie the networks and groups which ordinarily look after people who slip through the “safety net” of government welfare programs.
  5. Cultural collapse – loss of faith in the goodness of humanity.

Orlov believes the US collapse will be more catastrophic than its Soviet counterpart (at 21 min) because the Russians had stronger family and community ties. Absent in the US, these resulted in a strong moral obligation to help one another survive the life-and-death struggles Russian people faced in the early 1990s.


*See also https://www.resilience.org/stories/2013-04-11/the-five-stages-of-collapse-by-dmitry-orlov-book-review/

**According to Orlov, the US never possessed the rocket technology to carry off a moon shot.

 

Where Money Comes From and Why They Don’t Teach It in School

Money Puzzles: A Film About Money and Debt, Austerity, Solidarity and Alternative Solutions

Directed by Michael Chanan (2016)

Film Review

This film starts by examining the history of money, which developed in all civilizations except the Incan civilization (the Incas had gold but didn’t use it for money). The first coins seem to have appeared independently in China, India and Ionia* in the 6th century BC.

Our current system of money creation, sometimes referred to as “fractional reserve banking,”** began in the Netherlands and the Italian city states in the 17the century. It came to Britain (and most of the British colonies) with the formation of the Bank of England in 1694.

Contrary to popular belief (and most economic courses), 97-98%*** of the world’s money isn’t created by government (or central banks), but by private banks when they issue loans. The money banks loan out doesn’t originate from reserves or savings accounts. Banks create it out of thin air.

The documentary’s main focus is the debt crisis that collapsed the Greek economy in 2015. Unfortunately the film mentions, but fails to explain clearly, that governments also create money by borrowing from private banks. At times, when banks stop making private loans, governments are forced to increase borrowing to ensure there is sufficient money in circulation to keep the economy going (ie to prevent recession and/or economic depression).

What many people fail to realize, is that most governments have the constitutional authority to create money. Their decision to borrow it from banks (rather than create it themselves) is purely political.

The film explores the collapse of the radical Greek party Syriza when its leadership  ignored a 2015 popular referendum rejecting the EU’s austerity bailout proposal. 61.3% of Greek citizens opposed the bailout, essentially opting for Greece to default on their debt and withdraw from EU.

The filmmakers also explore the Argentinian decision to default on their debt in 2001. Although UN General Assembly passed a resolution in support of the Argentinian default in September 2015, a new Argentinian government took out new IMF loans in 2016 to resume debt repayments.

The documentary concludes with a number of innovative grassroots alternatives Greek citizens have initiated to support each other in meeting post-collapse survival needs (see Debt and the Economic Colonization of Greece), Spain, and Argentina have adopted in the face of extreme economic austerity. These include local currencies, squatting and a variety of community-based mutual aid cooperatives to ensure people don’t go without food, clothing or other basic necessities.


*Ionia was an ancient civilization in the western part of modern day Turkey. It consisted of the northernmost territories of the Ionian League of Greek settlements.
**Under fractional reserve banking, banks are required to hold in reserve a minimum percentage (10%) of loan’s face value. In reality, most central banks discarded reserve requirements at least a decade ago, essentially allowing private banks to decide how much money to create.
***The other 2-3% of the money supply is issued by central banks as notes and coins.  97-98% is electronic money created via computer entries.

Extinction Rebellion: How Our Modern Economic System is Killing Life on Earth

XR Money Rebellion – Tackling the Root of the Problem

Extinction Rebellion (2020)

Film Review

This documentary focuses on the role of our present economic system in the destruction of our ecosystem. It specifically highlights the role of our monetary system, in which 97% of our money* is created by private banks (out of thin air) when they issue loans. Money is also created when governments borrow to fund fiscal deficits.

Our only hope of repaying this ever increasing debt is via continuous economic growth, which requires ever increasing resource extraction (mining, oil and gas drilling, etc).

The choice to allow private banks to create our money is a political one. It hasn’t always been that way. In colonial America, the government of each colony created the money necessary to ensure ongoing economic activity. King George III tried to force the American colonies to abolish their sovereign currencies for British pounds created by the (private) Bank of England. This would be a major factor in the call for independence.

Likewise government has the power to issue money directly into the economy to cover deficits. When governments incur debt by borrowing from private financial institutions, this is a political choice.

The film describes a number of possible alternatives to our current debt-based economic system.


*2-3% of the money circulating in the economy is issued by central banks as notes and coins. 97-98% of circulating money is electronic money issued by banks when they make loans. Both banks and governments promote the popular misconception that private banks only loan money they hold in reserves and/or customer’ savings account. This is a fallacy. In fact, the only way money can come into existence in the modern economy is if someone goes into debt. See 97% Owned

 

The Delusion of Perpetual Economic Growth

Fairy Tales of Growth

Directed by Pierre Smith Khanna (2019

Film Review

This documentary is about the urgent need to abolish the mindset that measures human progress in terms of economic growth. It also emphasizes the price we pay for growth in terms of heavy resource extraction and even heavier human exploitation.

The filmmakers begin by referencing Limits of Growth, published by the elite round table group Club of Rome published in 1973. Relying on MIT computer modeling, it predicted unrestrained growth would lead to economic and ecological collapse in the early decades of the the the 21st century.

The film makes many of the same points as Michael Moore’s recent documentary Planet of the Humans (see The Corporatization of the Climate Movement). Both depict the notion of “Green Growth” as a corporate scam. Politicians and environmental NGOs who claim that a switch from fossil fuels to renewable energy will allow unlimited economic growth without causing irreparable harm to the planet are either deluded or deliberately lying to you.

Both films films assert our only option, at this point, for preventing environmental collapse is  to significantly reduce consumption and to prioritize human welfare and the environment over the continual acquisition of more stuff.

The filmmakers cite an interesting study revealing that every new purchase gives people an average of 15 minutes of happiness. In fact, a growing number of psychologists and sociologists believe improve if we focus away from material possessions to to improve health care and education, spending more time with our families, and rebuild our communities.

For me, the high point of the documentary is the link it makes between our debt-based system of money creation and the pressure for ever increasing economic growth. Contrary to public belief, at present 97% is created, not by government, by by private banks when they issue loans. (See We Need to End Money Creation by Private Banks – Urgently)

Because money only comes into existence when someone borrows money, the only way to keep enough money circulating in the economy is to continually increase (both private and government) debt. The cost of repaying this exponentially increasing debt is a continual increase in resource extraction, environmental degradation and pollution, and exploitation.

 

Greeks Fight Back Against Austerity and Fascism

Love and Revolution

Directed by Yannis Youlountis (2018)

Film Review

Love and Revolution is about the growing anarchist movement fighting Greece’s deepening austerity cuts (which have cut salaries and pensions in half and ended health care access for a million patients). The film consists mainly of interviews with anarchists over the specific projects they are organizing. The documentary emphatically challenges the recent announcement by the IMF and the European Central Bank that Greek austerity has ended. After years of brutal austerity resulting in thousands of deaths, the Greek government is further than ever from repaying its debt to European bankers.

Among the projects that most impressed me are

  • a social kitchen that regular provides free meals on the street.
  • an anti-eviction movement that has been by occupying and shutting down eviction hearings at the District Court.
  • an ongoing squat that has provided accommodation to more than 6,000 refugees in the last five years.
  • an antifascist campaign that has shut down Golden Dawn* offices in Athens and established Exarcheia, a fascist-free zone that also effectively excludes Greek police.
  • a campaign to block the construction of a new airport in a pristine rural/agricultural area.
  • a YouTube channel dedicated to Greek news from the viewpoint of anti-austerity activists, rather than police and banks.

*See Greek Austerity and the Rise of Fascism

In Debt We Trust

In Debt We Trust

Directed by Danny Schechter (2006)

Film Review

The main selling point of this 10-year old documentary is that it foretells the 2008 global economic crash. It quite accurately paints the enormous debt bubble that had developed by 2005 and which triggered a massive global recession when it burst in 2007.

Schechter mainly focuses on aggressive marketing efforts by banks to addict young people to debt and living beyond their means. College students can easily rack up $10,000 in credit card debt by the time they finish graduate, on top of $50,000+ of student loan debt.

The film also addresses predatory check cashing and pay day loan stores in minority communities, tax preparation services like H & R block that offer high interest tax return loans as part of their service, and predatory mortgage schemes that played a role in the 2007 housing bubble that crashed the global economy.

The only glaring inaccuracy is a claim that attributes the American Revolution to the colonists’ desire to end their “enslavement” to European banks. Unfortunately the War of Independence didn’t end US enslavement to European banks. The first Bank of the United States, founded by the first Secretary of the Treasury Alexander Hamilton, was a private central bank largely funded by European banks which imposed crippling interest charges on the fledgling US government.

Contemporary historians are more inclined to identify the British ban on seizure of unceded Native lands as the main trigger for the US War of Independence (see Voice of Sanity in the Gun Control Debate).

Overall the major weakness of the film is its failure to highlight the root cause of the present debt crisis – namely that we continue to allow private banks to issue (out of thin air) 97-98% of the money used to run the global economy (see The Battle for Public Control of Money )

How Arrogance Blinds the West to Their Historic Decline

Peter Frankopan – The Silk Roads

Directed by Justin Hardy (2017)

Film Review

This documentary, based on historian Peter Frankopan’s best selling book Silk Roads, explores the Western trait of putting their own interests at the center of their world and possessing no interest or capacity to understand other cultures.

Typically both Europeans and Americans believe they have a monopoly on “goodness” – that only they can save the world from darkness and suffering. Their ruling elite uses these beliefs to justify invading and occupying third world countries and are surprised when other cultures regard us as smug and arrogant.

According to Frankopan, Europe and the US presently find themselves at the wrong end of global trade routes. Asian countries, especially China, that used to be poor are rich now. Asia provides the vast majority of Western consumer goods and owns most Western debt. Over the last 40 years, there has been a vast transfer of wealth from the West to Asia. These new centers of wealth (especially China) have become the hub of scientific, technological and intellectual progress. However owing to their self-centered navel gazing, most Westerners are totally unaware this is happening.

Frankopan also maintains Europe has never had much to offer in the way of natural resources or intellectual innovation (Christianity has always suppressed knowledge and progress). In 800 AD, Mesopotamia was the wealthiest region in the world, with Baghdad viewed as the global center of trade and learning. During this period, Europe’s most important resource was slaves, with Dublin, Mainz, Utrecht and Venice serving as major trafficking centers for kidnapped women and children.

All this changed with the conquest of the New World, the enslavement of Native Americans and Africans, and the flow of silver and gold back to Europe. This illicit capture of mineral wealth and human beings enabled Europe to developed highly specialized skills in violence and conquest. They no longer needed to produce their own wealth because they could use their military prowess to steal it from other regions.

Over time, the economic decline of the West has eroded their military capability to the point they can no longer win wars.

As in Rome, obscene income inequality is one of the main indicators of an empire in decline.

 

Portrait of a Homeless Philosopher

Martin

Directed by Donal Moloney (2018)

Film Review

Martin is a profoundly moving portrait of a homeless man befriended by Irish filmmaker Donal Moloney. Martin Holt, who lives under a bridge, considers himself much better off than people who live in houses – mainly because he has no debt, obligations or stress.

He maintains happiness is an illusion. Life, for him, is the simple pleasures of feeding pigeons, reading books at the library and enjoying seasonal changes.

The cinematography is stunning.

Oil Privatization: NAFTA and the Rape and Pillage of Mexico

Crude Harvest: Selling Mexico’s Oil

Al Jazeera (2017)

Crude Harvest is about a controversial law Mexico has enacted that puts its publicly owned oil industry up for sale to foreign corporations. The law also grants foreign oil companies the right to override the wishes of Mexican farmers if oil is discovered on their land.

Following a massive popular uprising, Mexico nationalized their oil industry in 1938. It’s the last nationally owned oil company to be opened to foreign investment. US oil economies are extremely excited as Mexico is an extremely corrupt country that makes no effort to regulate oil production. They will be allowed to pollute Mexican water and air as much as they like without consequences.

The documentary goes on to reveal how NAFTA has systemically “raped” the Mexican economy and forced the government to sell their oil industry to pay off Wall Street debt. By flooding the Mexican market with cheap (subsidized) American food, the US has wiped out most small Mexican farmers and ranchers and turned many small indigenous villages into ghost towns. Left with no way to support themselves, these former farmers can only survive by turning to organized crime or illegally entering the US.

Once that their lands are to be turned over to foreign oil companies, yet more farmers will lose their livelihood. Meanwhile Mexican debt will only increase as the government loses oil profits that currently comprise 40% of government revenue.

 

The End of Capitalism

The End of Capitalism

David Harvey (2016)

In The End of Capitalism, geography and anthropology professor Anthropology David Harvey makes the case that economic crises and inequality are part and parcel of capitalism and can only be ended by dismantling the capitalist economic system.

He begins by examining the cumulative “perception control” by the corporate media that has made it virtually impossible (except perhaps in Iceland) to look at any alternative economic systems despite the deplorable performance of capitalism since the 2007 global economic crash.

Quoting from Volume 2 of Marx’s Capital, he goes to demonstrate that growth and debt are structural components of capitalism – how the amount of debt created always equals the amount of capital growth created. In fact, repaying all government debt (as many conservatives advocate) would end capitalism faster than a workers revolution.

He also quotes Reagan advisor David Stockman and former vice president Dick Cheney to demonstrate how the Reagan and both Bush administrations deliberately ramped up the deficit (on unfunded wars) as a strategy to force future administrations to cut social spending.

For me, the most interesting part of his talk is his discussion of the Chinese economy, specifically how their willingness to employ Keynesian tactics (of government deliberately spending money into the economy) to generate 10% economic growth and save the global economy from total collapse.

In elucidating a viable alternative to capitalism, Harvey quotes from volume 3 of Capital, where Marx defines capitalism as a “class relation between owner and worker such that the owner extracts surplus value (profit) from the worker’s labor.” Thus in his (and Marx’s) view, the only viable alternative is a system of worker self-management of our own productive process (ie worker cooperatives). He believes such a system would coordinate production via a Just in Time networking strategy similar to those used by Wall Street corporations.

The video has an extremely long introduction and Harvey starts speaking at 8.00.