Jan 10, 2010

The economic collapse of America - what the future may hold

There is evidence to suggest that some elements of all 5 stages of economic collapse have already occurred in America. The trigger that brought us to Stage 1-Financial Collapse, occurred in 2008 with the banking bail out and creation of the Troubled Asset Relief Program, known as the TARP fund.

As chronicled by Russian engineer, Dmitry Orlov, as he observed the collapse of the former Soviet Union, the 5 Stages of Economic Collapse are:

Stage 1- Financial Collapse
Stage 2- Commercial Collapse
Stage 3-Political Collapse
Stage 4-Social Collapse
Stage 5-Cultural Collapse

In drawing his comparison between the United States and the former Soviet Union, Orlov writes, “Because Stage 1 is pretty far along. Stages 2 and 3 - commercial and political collapse, are driven by financial collapse, and will overlap each other.”

“States are already experiencing massive budget shortfalls, laying off state workers, cutting back on programs, and are starting to beg the federal government for bail-out money.”

“Even though the various stages of collapse drive each other in a variety of ways, I think that it makes sense to keep them apart conceptually. This is because their effects on our daily life are quite different. Whatever constructive ways we may find of dodging these effects are also going to be different.”

There is substantial evidence to suggest that our financial crisis was, in part, due to the removal of government regulations as it relates to lending practices, and the sale of mortgages as investment securities.

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