Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (21 page)

This is social tinder every bit as combustible as that in North Africa and the Middle East, where street rebellions lit a fuse under governments from Libya to Syria. Rather than let it ignite, China's leaders would much prefer to deflate the U.S. economy.

Note that the two most populous countries, India and China, are both on course to require significant food imports. China is rapidly urbanizing, a trend that is bound to reduce agricultural output, now the world's largest, in the decades ahead. The poor quality of China's freshwater resources also tells against a continuation of China's lead in farm output. Many experts believe that China's acute shortage of fresh water is its most pressing limit to growth. With some 350 million peasants expected to migrate from the countryside to urban settings that are still to be built, there is no obvious means to supplement degraded water supplies. China's largest waterway, the Yellow River, has been declining in recent years. In some months, its flow dribbles out before reaching the Pacific Ocean. Worse, according to Christina Larson, reporting for Yale University, “the river is now an estimated 10 percent sewage by volume.”
48

Meanwhile, in the past half century (from 1961 through 2007), while India's population tripled, its arable land per capita has been halved, from 0.35 hectares to 0.14 hectares. Agricultural productivity increased due to much higher energy inputs in farming, and increased irrigation from fossil aquifers. Neither of the world's two most populous countries is in a position to expand food production, quite apart from the likely consequence as Little Ice Age temperatures slash arable land worldwide. Now India, like China, is actively acquiring farmland abroad.

The debt-saturated advanced temperate-climate countries, are falling behind in this preparation for the future. I could be wrong, but I suspect that we're in the midst of one of history's biggest transition crises. If the advanced economies are flushed deeper into the solvency abyss in part because climate shifts us into Little Ice Age conditions, you can expect a global Malthusian resource panic, followed by a slow, protracted adjustment period that could prove fatal to hundreds of millions of people.

Now is the time for you to think about the fact that cold kills—in more ways than one. Unlike periods of warmer climate, like the Roman Warming and the Medieval Optimum, which were three to five degrees warmer than today, with plentiful food, colder periods are times of famine, want and more rapid extinctions. They are times of greatly increased war and struggle over decreased food and other resources.

Forget Global Warming. Global Darkening is upon us.

1
Xenophon,
Oeconomicus
, translated by Aubrey Stewart (Cambridge: J. Hall & Son, 1886).

2
Thomas Carlyle, “Occasional Discourse on the Negro Question,” originally published in
Fraser's Magazine for Town and Country
, 1849.

3
See David Colander et al., eds.,
Race, Liberalism and Economics
(Ann Arbor: University of Michigan Press, 2004).

4
Paul Krugman, “Seeking the Rule of Waves,”
Foreign Affairs
, July/August 1997,
www.foreignaffairs.com/articles/53234/paul-krugman/seeking-the-rule-of-the-waves?page=show
.

5
David Roberts, “Some Thoughts on Economists and Climate and So Forth,” Grist, February 22, 2009,
www.grist.org/article/Rhetorical-diseconomies-of-scale
.

6
“Solar Physicists Believe Last Ice Age May Happen Again,” MyTechVoice.com,
www.mytechvoice.com/solar-physicists-believe-last-ice-age-may-happen-again-719.html
. Accessed June 2011. Also see “Solar event that may have caused last ice age happening again?” IB Times Los Angeles, June 14, 2011,
http://losangeles.ibtimes.com/articles/162919/20110614/solar-flare-ice-age-global-warming-sun.htm
.

7
Joseph A. Tainter,
The Collapse of Complex Societies
(Cambridge, UK: Cambridge University Press, 1988), 146.

8
Charles Emil Strangeland,
Pre-Malthusian Doctrines of Population: A Study in the History of Economic Theory
(New York: Columbia University Press, 1904), 106.

9
“Thomas Robert Malthus,”
The Concise Encyclopedia of Economics
,
www.econlib.org/library/Enc/bios/Malthus.html
.

10
Walter Russell Mead, “Doing What Comes Naturally,”
American Interest
, April 7, 2010.

11
Joseph A. Schumpeter,
History of Economic Analysis
(New York: Oxford University Press, 1954), 579, n. 1.

12
Martha C. Nussbaum,
The Fragility of Goodness: Luck and Ethics in Greek Tragedy
(Cambridge, UK: Cambridge University Press, 2001).

13
Brian Fagan,
The Long Summer: How Climate Changed Civilization
(New York: Basic Books, 2004), xv.

14
“Bernanke: All but One Major Firm at Risk in 2008,” Reuters, January 27, 2011,
www.reuters.com/article/2011/01/27/financial-regulation-fcic-idUSN2713264020110127
.

15
Donella H. Meadows et al.,
The Limits to Growth
(New York: Universe Books, 1972), 53.

16
IRIN Global, “FOOD: Is There a Crisis?” IRIN, January 21, 2011,
www.irinnews.org/Report.aspx?ReportID=91683
.

17
For more on the connection between droughts and floods and waning solar output, see “Never Mind the Heat, Climate Change Is Hoax by Gravy-Train Scientists,” YouTube, August 9, 2010,
www.youtube.com/watch?v=eEmUS7PAWFw&feature=related
(an English language interview originally broadcast on
Russia Today
).

18
Wesley J. Smith, “Global Warming Hysteria: Mini Ice Age on the Way?” Secondhand Smoke (blog), December 21, 2010.
www.firstthings.com/blogs/secondhandsmoke/2010/12/21/global-warming-hysteria-m
.

19
Smith, “Global Warming Hysteria.”

20
Piers Corbyn, “The Role of the Spotless Sun,”
www.weatheraction.com/displayarticle.asp?a=6&c=1
.

21
Willie Soon, “We Are Being Brainwashed” (interview),
http://itsrainmakingtime.com/2009/climate-part2/
.

22
David S. Van Dyke, “The CFC Ban: Global Warming's Pilot Episode,” American Thinker, February 4, 2010,
www.americanthinker.com/2010/02/the_cfc_ban_global_warmings_pi.html
.

23
For more information about solar output and sunspot cycles, see Timo Niroma, “One Possible Explanation for the Cyclicity in the Sun,”
http://personal.inet.fi/tiede/tilmari/sunspots.html
.

24
Lewis Page, “Earth May Be Headed into a Mini Ice Age within a Decade,”
The Register
, June 14, 2011,
www.theregister.co.uk/2011/06/14/ice_age/
.

25
“Long Range Solar Forecast,” NASA Science News, May 10, 2006,
http://science.nasa.gov/science-news/science-at-nasa/2006/10may_longrange
.

26
Willie Soon and Steven Yaskell, “Year Without a Summer,”
Mercury Magazine
32, no. 3 (May–June 2003): 13f.

27
“Frost Destroys The Wheat Crop in Coahuila” [in Spanish],
Vanguardia
, February 13, 2011,
www.vanguardia.com.mx/acabaheladasconeltrigodecoahuila-650012.html
.

28
Ibid.

29
Ian Plimer,
Heaven and Earth: Global Warming: The Missing Science
(Lanham, MD: Taylor Trade Publishing, 2009), 180.

30
Paul A.T. Higgins “Climate Change in the FY 2011 Budget.” In: AAAS Report XXXV, Research and Development FY 2011, (Washington, DC: The American Association for the Advancement of Science, 2010), 171-178. Available at
www.aaas.org/spp/rd/rdreport2011/11pch15.pdf
.

31
AAAS Report XXXV, Research and Development FY 2011, Chapter 15, available at
www.aaas.org/spp/rd/rdreport2011
.

32
See “Hockey Stick Studies,”
www.climateaudit.org
.

33
Terry Macalister, “Carbon trading could be worth twice that of oil in next decade,”
The Guardian
, November 29, 2009,
www.guardian.co.uk/environment/2009/nov/29/carbon-trading-market-copenhagen-summit
.

34
Mark Schapiro, “Conning the Climate: Inside the Carbon-Trading Shell Game,”
Harper's Magazine
, February 2010,
www.harpers.org/archive/2010/02/0082826
.

35
Schapiro, “Conning the Climate.”

36
Matthew Carr, “EU Needs Quick Action on New CO2 Fraud, Barclays Says,” Bloomberg, February 5, 2010,
www.bloomberg.com/apps/news?pid=newsarchive&sid=avLf2LqR6Szs&pos=13
.

37
Jeff Goodell, “As the World Burns,”
Rolling Stone
, February 27, 2010,
www.rollingstone.com/politics/news/as-the-world-burns-20100106
.

38
David S. Van Dyke, “The CFC Ban: Global Warming's Pilot Episode,” American Thinker, February 4, 2010,
www.americanthinker.com/2010/02/the_cfc_ban_global_warmings_pi.html
.

39
Van Dyke, “The CFC Ban.”

40
Tainter,
Collapse of Complex Societies
, 207.

41
Tainter,
Collapse of Complex Societies
, 195.

42
Nir J. Shaviv, “The Milky Way Galaxy's Spiral Arms and Ice-Age Epochs and the Cosmic Ray Connection,” ScienceBits, March 30, 2006,
www.sciencebits.com/ice-ages
.

43
Peter Christie,
The Curse of Akkad: Climate Upheavals That Rocked Human History
(Richmond Hill, Ontario: Annick Press, 2008), 67.

44
Brian Fagan,
The Little Ice Age: How Climate Made History, 1300–1850
(New York: Basic Books, 2000), 155.

45
For more information, see Gavyn Davies, “China Is Bigger than You May Think,”
Financial Times
, February 15, 2011,
http://blogs.ft.com/gavyndavies/2011/02/15/china-is-bigger-than-you-may-think/
.

46
“Build a Wall,”
The Economist
, February 3, 2011,
www.economist.com/node/18065655
.

47
“Average Price of Food in 50 Cities, January 21–31, 2011,” National Bureau of Statistics of China, February 9, 2011,
www.stats.gov.cn/english/newsandcomingevents/t20110209_402701782.htm
.

48
Christina Larson, “Growing Shortages of Water Threaten China's Development,” Yale Environment 360, July 26, 2010,
http://e360.yale.edu/feature/growing_shortages_of_water_threaten_chinas_development/2298/
.

There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

—Ludwig von Mises

One of the least understood consequences of the abandonment of gold in the U.S. monetary system is its effect in transforming the United States from the world's most dynamic capitalist economy into a predatory system of debtism. As I defined in Chapter 2, debtism is the corrupt and pathological perversion of capitalism in which the greater part of the purchasing power of the country is diverted into the pockets of bankers and their best customers. Let's take a look at how this shift changed the world.

Not to be vain about it, but I probably had a better grasp of the big picture twenty years ago than all but a few persons on the globe. Working with Lord Rees-Mogg, we correctly anticipated the fall of the Berlin Wall, the collapse of the Soviet Union, the rise of Islamic terrorism, and the failure of the state socialist experiment. It was precisely these insights that led to the founding of Anatolia Minerals (now Alacer Gold) and its stablemates among junior resource companies. Unlike most other analysts, we did not swallow the conventional wisdom that depressions were a thing of the past that had been superseded by clever manipulation of fiat money. I knew that another depression was likely in my lifetime. In addition to that, I knew from my eccentric research into past financial crises that they are inevitably bullish for gold.

What I failed to grasp, however, was that the onset of depression would not just entail a cyclical recurrence, but could represent a disastrous transformation of the whole nature of the economy. This was part and parcel of the little-noted transformation of the capitalist economy of the United States and other developed nations into debtist systems.

Why do I call the current economic system
debtism
rather than
capitalism
? For the simple and compelling reason that debt rather than capital lies at its heart. If you peel back the layers of the onion that shroud the dynamics of the current U.S. economy, you see that capital is no longer central. It is all about debt and the almost desperate angling by authorities to keep the debt aggregates expanding. All their policies aim toward stimulating private debt expansion. And failing that, things get messy.