APOCALYPSE NOW by Bill Bonner
"Utter piffle," is how Terence Blacker of The Independent describes it. He is the voice of Fair Reason. To him, the idea that the sky is falling now is an "insult to past generations who have faced more grievous threats with courage and calm." But that's the trouble with Fair Reason; she never looks up. Like the wife who thinks her husband 'would never do something that,' she's appalled when she finally sees what he's been up to.
Nassim Taleb has made a career out of warning people. His "Taleb distribution" describes the occasional apocalypse: usually, things happen in a respectable, bell curve kind of way…the way Fair Reason thinks they should…and then, all Hell breaks loose.
The last time the sky fell was 96 years ago. Few saw it coming; no one panicked. But panic wouldn't exist if it weren't a useful instinct from time to time. The celestial bricks came unglued in August 1914. By 1918, 40 million people had died. But that was just the beginning. WWI bankrupted or destroyed almost every major government of Europe. The plumy families that had dominated the continent for centuries - the Hohenzollerns, the Romanoffs, the Hapsburgs - were all clobbered. The Ottoman Turks fared no better. Then, scarcely 20 years later, France's Third Republic was another victim…and so was Germany's Third Reich.
But that was only the half of it. Between the two wars, came hyperinflation and destitution in Germany, America's Great Depression and something far more deadly - the world's worst plague, the Great Flu Epidemic of 1918-1920. The illness is known to us by its WWI alias, the "Spanish Flu." Propagandists didn't want the world to know how many French, American and English soldiers were dying of the disease. So they referred to it as though it only wiped out Iberians.
First spotted in young soldiers at Fort Riley, Kansas, the virus was soon found almost all over the world. Japan was the only major population center spared. Curiously, the disease killed off young adults more often than old people or children - somehow turning a strong immune system against its owner in what scientists call a "cytokine storm." How many people gave up the ghost? Estimates range from 20 million on the low side to 80 million top end - that is, at least twice as many people who had died in the war.
Before the 1914-1945 catastrophe was the 1789-1812 calamity - roughly the period from the French Revolution to the Battle of Waterloo. It not only included the collapse of five different forms of government in France - Monarchy, First Republic, Directory, Consulate, and First Empire - but also inflation, 3 currency collapses, major political debacles throughout Europe, the Napoleonic Wars, as well as the last major famine in France in 1795.
War, bankruptcy, chaos, plague and famine - when trouble comes, it comes with a mob at its back. As usual, the Greeks provided an early example. Athens must have been the Goldman Sachs of the classical world. But when these masters of the ancient universe tried a hostile takeover of Sparta, it failed miserably…leaving them as exposed Bear Stearns. Sparta counterattacked and laid siege. Then, the bugs joined the attack in 430 BC. Thousands were killed by plague - including Pericles himself. Weakened by disease, hunger and war, Athens surrendered, was enslaved, and the Golden Age was over.
Later, it was the Romans' turn. Bankruptcy, wars, stupidity - all took their toll. Then, in the 6th century, came another major onslaught: disease. Of the 80 monasteries around Constantinople in 540AD, none survived. Ghost ships, in which everyone on board had died of plague, drifted in the Mediterranean. European civilization seemed to fall apart.
Again, in the 14th century, came 100 years of war in France…along with starvation and plague. A couple of cold, wet summers caused famine in Western Europe. Young children were abandoned. Old people starved themselves to free up food for their families. Meanwhile, the Mongols attacked in the East, hoping to conquer all of Europe. And when they retreated, they left a going-away present - the plague. The Black Death of 1347-1351 killed off more people than the war or the Great Famine of 1315. Towns and fields were abandoned as a third of the population died. "So many died that all believed it was the end of the world," said Agnolo di Tura of Siena, who buried his five children with his own hands.
New Scientist magazine comments: "Many people dismiss any talk of collapse as akin to the street corner prophet warning that the end is nigh." But, more and more scientists are taking the end of civilization threat seriously, the magazine continues. Complexity - such as derivative financial instruments and "just in time" inventory systems - is making "our society…ever more vulnerable."
In his 1988 book, The Collapse of Complex Societies, Joseph Tainter argued that all societies - like all organisms - are doomed. Each challenge requires a solution. Each solution takes resources. Eventually, the solutions - and readers may substitute the word "bailout" for solution - brings more challenges and takes more resources. Eventually, the system collapses under the weight of if all.
When the stars fall, even the angels get out of town.
Enjoy your weekend,
Bill Bonner, The Daily Reckoning