It Has Hit The Fan!

Sunday, May 17, 2009

Executive Summary

• Stop waiting for "it" to happen; it already has.
• Keep the big picture in mind.
• This is a crisis of too much debt, not too little spending.
• This is a global crisis.
• The energy situation is getting worse, not better.
• It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
• Change is necessary, and we must embrace it.

If you have been waiting for further confirmation about the direction of the economy, or waiting for a sign that it’s now time to get serious about preparing for a future filled with less, this report is written for you.

My job is to provide you with a big-picture view of where we are and where we are headed, with an emphasis on clarifying the ways in which the dominant spin-cycle news machinery attempts to lure us back into the false comfort of borrowing and spending more.

At PeakProsperity.com, people often wonder about what they’ll do "when things fall apart."  A frequently-used acronym-containing alternative to this phrase is "when TSHTF," where the "F" refers to a fan and the other letters to something else hitting the fan that I will be coy about, so as not to offend anybody’s sensibilities or trigger any spam filters.

I have news for everybody:  It has hit the fan.

You are living in the midst of the collapse of western economies, which are moving from a more complicated state to a less complicated one. This is it.  Keep a journal, because it’s happening right now.

After the Great Depression, many people remarked that it was only obvious in retrospect. While it was unfolding, things steadily eroded. But 75% of the workforce remained employed, while hopeful signs of progress were constantly trotted out by various politicians, private economists, and official-sounding government agencies. It is often quite difficult to appreciate the true magnitude of sweeping change while it is occurring.

My goal here is to help you recognize the true extent of the damage in our current situation, so that you can plan accordingly and resist accepting half-baked claims that the bottom is in.