ECONOMIC RIP TIDE – SECOND EDITION
NOTE TO READER: ECONOMIC RIP TIDE was initially written in 2009. It was not cohesive and it lacked continuity.
The Present Edition will explain in great detail, to the reader, why and how the U.S. and a large part of Europe entered the Great Depression of 2008.
The reader will realize that an immense structural change has occurred in the entire world, and that there is a new paradigm of economics and wealth which will make the Western countries poor and the Asian countries rich for the foreseeable future.
I have used life in the ocean as a analogy for this process.
PROLOGUE
Human Beings, as a specie, because they can communicate well with each other, and because they have technical skills, seem to think that they will survive forever, whilst other species will become extinct.
This is a totally unfounded belief.
Unfortunately, the very communication skills and technological skills may lead to the demise of humans as specie much more quickly than most of the other species on this planet.
GLOBAL WARMING EFFECTS
For example, humans are faced with the problem of nuclear warfare. There are tens of thousands of nuclear weapons spread out around the globe – in the air, in the oceans, on land – everywhere.
One mistake, and the human race disappears. Such a mistake, in terms of probability, is inevitable.
Global warming. This is happening and will make life untenable within three or four decades.
Overpopulation and starvation. Most humans do not have the intelligence to reduce their reproductive rate. Here again, we are looking at a three to four decade time frame.
However, these events are probably 20 to 30 years in the future. We are facing a disagreeable problem today: The Great Depression of 2008.
This economic tragedy will hit some countries much more intensely than others. The U.S. and most of Europe will find its living standards dropping rapidly and China and other countries will see their living standards rise.
AN ANALOGY
In order to understand what has happened to the Global Economy we should imagine that the population of humans is similar to the population sea animals in the oceans.
Both groups of animals, sea life and humans, are alive and require food to survive. They also reproduce and kill each other.
Sea animals kill in order to eat and humans kill to gain territory or wealth. Both groups have workers. The sea life workers simply seek prey to kill. They grow bigger and reproduce. The human workers seek out jobs which gives them food and they grow bigger and reproduce.
The prey for the sea life is more abundant closer to the shore. There is more plant life here, more dispersal of eggs and a greater chance of surviving.
In the depths of the oceans, life is very precarious and the predators are savage. Waves and tides frequently bring large schools of fish close to shore. These fish feed and multiply and grow more numerous.
However, there is a great risk for these water animals.
THE RIP TIDE
When the water comes to the shore it is constantly pulled by gravity back to the depths of the ocean. Every so often the sand is also pulled back, creating a deep channel. We now have gravity pulling the water into the channel and then back to the depths of the ocean.
The velocity of this flow is greater than the normal velocity because of the double gravity effect. Fish caught in the rip tide return back to the dangers of the ocean depths quickly. There they are faced with the stronger predators and a more dangerous life.
The reader might ask: How does a bunch of fish compare to a nation of people? People are like fish in that they must eat and they reproduce.
Over history some groups of people have found themselves in shallow water where the food is plentiful, the predators are few and life is good.
Suddenly, that group of people are caught in the Rip Tide and are dragged back to the ocean bottom, where food is scarce and predators vicious.
In the Ocean there are billions of fish. On the surface of the planet there are billions of humans. Both groups want food. The fish catch their food with their mouths. The humans find jobs as laborers and are paid with food.
What is important to realize is the fact that there are BILLIONS of humans – all looking for work, which is their food. For a small part of the 20th Century, the workers of the West were up by the shore and had plenty of work and hence, food.
AUTO WORKERS
This period of time only existed from 1950 to 2004. It only existed in the U.S. and Europe. Most workers in Asia, Africa, Latin America and the Middle East had no work and lived in poverty. Something happened in those 54 years that caught the Americans and Europeans in an Economic Rip Tide and is pulling them back into the depths of the ocean.
There are three major social forces that caused the Economic Rip Tide and we shall examine those three forces in Chapter Two.
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