De Leverage

[gurusid]

Hi Folks,

Leverage? What Leverage? Oh, De Leverage…

If anyone has been wondering where all that deleveraging went this graph I think shows it clearly:
From Of Two Minds via Zero Hedge
$179,000 Each – In Debt, Submitted by Tyler Durden on 06/05/2013 13:53 -0400

…That which is unsustainable will go away. That includes debt, malinvestments, currencies, deficits and yes, entire empires.

In other words it hasn’t happened… yet.

L,
Sid.

[Variable81]

I have a bit of a sick curiosity what Europe is going to look like once the real deleveraging starts… :dry:

[gurusid]

Hi V81,

Actually there are plenty of places already at or near to what it may look like:

The main thing is it will not look like a Hollywood movie. Thus mad maxian contradictions aside (an apocalyptic road movie? Think very carefully about that whole premise – just how far does your ‘vehicle’ get on a gallon of gas?), after a bit of unrest and rioting/looting, once the hunger sets in most of the ‘rougher’ elements having looted the bling will have been either cowed into submission by starvation/thirst or (the smarter ones such as the drug dealers) will have organised themselves into the new black market mafioso. Drink, drugs and antisocial behaviour will suddenly become the extreme liabilities that they historically always were having only recently been papered over by a benign and forgiving welfare system, as supplies of everything dry up and people will be thrown together into situations in which they will have to co-operate to survive or perish. Martial Laws with ‘shoot on sight’ rules of engagement will quickly thinout any trouble makers.

As Dmitri Orlov (he had insider info on the Soviet ‘collapse’) points out;

What tends to collapse rather suddenly is the economy. Economies, too, are known to collapse, and do so with far greater regularity than civilizations. An economy does not collapse into a black hole from which no light can escape. Instead, something else happens: society begins to spontaneously reconfigure itself, establish new relationships, and evolve new rules, in order to find a point of equilibrium at a lower rate of resource expenditure.

Note that the exercise carries a high human cost: without an economy, many people suddenly find themselves as helpless as newborn babes. Many of them die, sooner than they would otherwise: some would call this a “die-off.” There is a part of the population that is most vulnerable: the young, the old, and the infirm; the foolish and the suicidal. There is also another part of the population that can survive indefinitely on insects and tree bark. Most people fall somewhere in between.

To be honest it could all end up looking like anything from a Dad’s Army style civilian defence core to the current Syrian crisis only without the UN, but that’s the problem with uncertainty… :unsure:

Edit: actually this extraenvironmentalist pod caste is worth an ear if you have one to spare! Especially about 18mins in about alternative experiments in living vs. neo-fuedal Orwellianism… :whistle:

L,
Sid.

[Smarty]

Thank you for sharing this information.

[Author]

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