The global Depression scenario is now dominant. Here are some of the drivers:
- An utterly complete regulatory capture of the US government (the advent of the Obama administration has done nothing to change this). Regulatory capture is when the monied interests take control of the government institutions that are supposed to regulate/control them. In OODA terms, this is a loss of control over the critical orientation phase of decision making loops. A vast looting of the government's coffers is now in process.*
- The D-process (de-leveraging and deflation) feedback loop is now entrenched. This is a neat term developed by Ray Dalio of Bridewater Associates (Barron's interview). The D-process is what happens (rarely) when too much debt is accumulated. Excess debt must be eliminated before growth can return. In the US case alone, excess debt load is $20-25 Trillion. Since global governments are unwilling and/or unable to wipe out the world's creditors (they've been captured), the process will drag on and on. Stimulus and bailout packages, constructed in a way to protect the wealth of the world's creditors/rentiers (looting), won't work. It will only prolong and deepen the failure as the D-process feedback loop intensifies.
- A large number of countries from Japan to Spain to Latvia are already in depressions. These failures will serve as a drag on the entire global system, catalyzing the feedback loops of the D-process.
Nearly everyone seems to be buying into this meme, and are prepping for it by starting gardens. Personal anecdotal evidence tells me that it is so. The UK Independent has noted the trend, and several of my seed source catalogs have noted that orders may run late this year due to volume of demand. I am considering doubling or trebling my original garden plan for this year, and will be blogging my experiences in the garden this year, as well as providing an online community to exchange experiences. More on that later.