Workaday citizens must occasionally tune into the media charade and wonder what sort of crazyglue is holding this place together... and then perhaps they flip the channel and try not to think about the generational larceny that passes for government in this country.

On the surface, First World nation-states will appear to strengthen as the New World Order coagulates... but the truth is the standard of living in developed countries is falling. Power is shifting towards Asia. Outsourcing and offshoring are but two steps in a calculated process of economic migration that will trap a generation (at least) of western citizens between rising costs/taxes and diminishing income/purchasing power.

One interesting sub-current (undertow?) of the global tide has been the secession of individuals, families and entire cultures away from the decaying (western) paradigm of nation and citizenship based on geography, and towards self-determination and individual sovereignty. Five centuries of relentless globalization has produced an extranational class of corporate/cultural elites... uberwealthy corporate and banking royalty - and their ivy-educated courts - circling the globe with the latest technological wizardry. This privileged class has, ironically and quite unintentionally, created a rough template for relative economic freedom which - again catalyzed by technology - is within reach of a broader productive/salaried class worldwide. The ripening of the information age will facilitate further extranational migration among this mobile 'productive' class. The cost/benefit analysis for the tax-payer (as an accidental, geographically-determined citizen) is weakening... thus quite rationally, an ever increasing number of productive individuals will question national allegiance (and the economic serfdom it implies) based on physical boundaries and notions of patriotism. A wired world will render the physical boundaries of nations (and legal jurisdiction) obsolete... a form of extranational privatized citizenship heretofore the domain of the corporate and political masterclass will find mass appeal among the over-taxed productive class (formerly the middle class).

Even in the early days of national economic/political disintegration we saw evidence of dissent... a revival of common sense that came to question the fundamental construct of the status quo, itself a thin patchwork of accumulated mistakes and half-measures held together by a thread of fear and tradition. Beneath the predictable tax revolts and populist demonstrations was a disintegration of the rule of law (favoring the individual and self-determination). The centrally-managed, single-payer future under private/public (corporate/federal) stewardship recently sold as 'hope-and-change' will be short-lived. The state cannot afford it's promises and it will not honor them.

The citizen-as-customer paradigm will widen the gap (abyss) between rich and poor. Quite simply, those who can afford to escape imploding western nanny-states will do so. Small, wealthy, low-cost countries will compete for mobile/productive individuals and wealthy retirees... like gated communities on a national scale (and supported by citizen-centric technology). Those who remain stuck within decaying western nations will suffer a sort of martial law and financial servitude that erases the distinctions between 'first-world' and 'third-world'. Such is a world where credit, debt and collateral are measured in hard assets, not fiat currency. The relationship between the haves and have-nots will resemble feudalism, with private security enforcing an otherwise economic segregation.

Economic segregation encourages cultural and political segregation. New evidence of this phenomenon was abundant even before the economic crises of 2008 and 2010. The wealthy have already built private, gated enclaves for themselves in and around every major world city (these in addition to the exclusive island and mountaintop retreats that allow the privileged to interact with a filtered, sanitized version of nature). The real estate racket is like the cover charge at a nightclub: those without the means (or the interest) don't get in. In fact, some cities were themselves completely gentrified during the bubble years, pushing generations of middle-class and blue-collar families into a distant, unsustainable ex-urban hinterland. Self-selecting enclaves utilizing technology will manifest in a similar way in a virtual landscape, all but severing the link between citizen and soil.

--MP

There was a greater risk to consider, but few did. Both global economic and political (incl. military) systems were being tested simultaneously. The USA had accepted large-scale, indeterminate military action as a cost of doing business - a cost that was carried via issuance of debt. It barely made the news anymore. And we spent too much on all things non-military, as well.

The federal government tried to spend it's way out of debt. It didn't work. Our democracy was available to the highest bidder... namely the corporate lobby. They owned the media, too. Dissent was marginalized and left to ferment on the internet. Globalization was just beginning to reveal it's many facets: religious fundamentalism, disease/pandemics, tribalism, rampant technology, and a host of other consequences, unexpected and unintended. Looking back, it is clear that few among us grasped the aggregate risk that surrounded our lives 8 years ago.

We ran a few red lights during the political campaign season, and we didn't do any better after the elections, either. The hangover was a hopeful but foggy period. A few crises had ripened by that time, but we were conditioned to expect recovery and a return to the status quo of American hegemony. Much larger risks had already accumulated and suddenly everything that could go wrong, did. We could have asked more questions and demanded answers, but by then it really didn't matter anymore. The damage had been done.

Since then, the public discourse and vocabulary have become more serious. Stock market gyrations and the-next-big-thing have yielded to basic elements of life and survival. Employment, food, gas, water, heat. Nobody talks about global markets anymore. Supply and demand are local. Word-of-mouth amongst neighbors and the internet have eclipsed both television and hard copy press, but not radio. The farm report matters once again.

--MP

Deflation happens all the time. Within a given market, the dynamics of supply and demand can regularly cause periods of deflation - a somewhat ordinary event. However, the deflation we are now experiencing across most markets and across the globe is indeed extraordinary. It is exactly the breadth and depth of this deflation that makes it so phenomenal.

A crisis wrought by decades of credit-fueled bubbles has shocked the global economy sufficiently to cause economic contraction... Buyers are not buying. Spenders are not spending. Lenders are not lending. In other words, a decrease in demand across all sectors and continents, causing supply and inventory to behave accordingly, i.e. lower price levels. Deflation. This is no longer a liquidity problem - it is a paradigm shift. Peak credit. It's all downhill from here.

Such rampant deflation is rare enough, and we are getting this dose on a global scale. This is unchartered territory, and it terrifies the power brokers on Wall St. and in Washington D.C. They are powerless against deflation (the policies set in motion by our "leadership" and their minions have failed miserably thus far) which is exactly why they are working overtime to catalyze inflation. These same experts and power brokers believe they can 'control' inflation, thus it is preferable to all other possibilities and must be encouraged at all costs. This backdrop goes a long way in explaining many recent frauds... the bankster bailouts, stimulus checks, monetization of debt, quantitative easing, vaporous stock market rallies, federal budget spending/deficit, extension of military action... all of these things are intended (at least in part) to help trigger inflation (by somehow creating demand). Our leadership (esp. in the US) is facilitating and bankrolling evermore of the same behavior that caused the current global economic crisis in the first place.

I underestimated the severity of this current deflationary period - I had expected inflation to take root more quickly as our leaders flooded the globe with money created from thin air. But nobody is buying, and fewer can afford to be the ones selling. So this deflation is re-inforcing itself, frustrating the inflationary efforts of our short-sighted leaders. For even if inflation does come sooner than later, it will not be "controllable". Currency events go in only one direction. Thus we can expect the worst of both worlds... stubborn deflation in the short-term, and hyper-inflation thereafter.

My advice for businesses and individuals alike: minimize exposure to risk (including fiat currency such as the $USD) eliminate debt, reduce costs, shorten your supply chain (localize), and boost self-reliance.

--MP

The Pacific Northwest is a relatively self-sufficient region. Surrounded by vast swaths of high desert, rugged mountains and one very big ocean, the PNW has come to produce for it's own needs and depend on local/regional assets for economic viability. The PNW is a net exporter of both tangible goods and value-add services, a claim that few regions in North America can make. Entire industries have waxed and waned here - as everywhere - but always there is new demand (local and distant) to be met by PNW supply.

As fuel prices rise (permanently), the cost of transit and other inputs to distribution and production also increase. This fact has already begun to erode the impact and spread of globalization, as evidenced by the unfolding worldwide economic crisis. Much of the luxury and convenience we have imported so cheaply in decades past will slowly become too expensive for domestic markets to bear. Consequently, the local marketplace will adjust and provide viable alternatives to meet local demand, sans the cost of transit and international intermediary. A diverse and creative regional economy will survive this transition, and perhaps even thrive. Blessed with abundant renewable natural resources, the Pacific Northwest is already positioned to survive the coming global economic contraction, but will the PNW thrive?

If the PNW is to thrive - or merely survive - certain short-sighted trends must be reversed. What remains of productive agricultural acreage should be preserved and diversified. The penchant for selfish and inefficient rural development must end. The distance between resources & raw materials, the means of production, and the marketplace must be minimized. Industrial capacity must be preserved, as well. Like agriculture, industry will scale in a new (old?) way and be made sustainable. Education quality must match the demands of a high value-added economy and the jobs it provides. Such efficiencies, investment and sacrifice will not be optional, but necessary.

Local substitutes must be developed to replace certain imported goods and materials. Paper please, not plastic. Apple juice instead of orange. Mass transit of raw materials, finished goods, and people can diminish demand for imported oil, while biofuels produced from local resources displaces the remainder. Urban and suburban infrastructure will be re-made and remodeled to reflect efficiency and thrift. Simple, net-positive incentives should be constructed to encourage individual and collective sustainability. Those materials and goods that must be imported into the region must be exceeded (or at least balanced) by the region's own export value and capacity.

Regional self-sufficiency is a lofty goal, one that will require long-term thinking among citizens and equally long-term planning and resolve among our elected officials. The Pacific Northwest's relative isolation has already created an advantage of sorts. The region's natural resources and geography are in reasonable proportion to population. But this head-start can be easily lost against the headwinds of inflation and economic contraction. The region must also re-assert states rights and contradict certain federal authority for the sake of the local commonwealth. Can the PNW prepare itself and achieve momentum before-the-fact? Or will circumstances overwhelm Cascadia as they have Wall St. and our neighbors to the south? There is no neutral position with respect to local determination. Each of us must choose our own path into the future and act accordingly... all else will follow.

--MP

The sum total of America's national debt & liabilities through 2007 was in the neighborhood of $65 trillion. An unprecedented amount.

In 2008, our government (+Treasury, +Fed) have added another $2.5 trillion to our collective debt & liabilities... a sum that increases to $8 trillion if you count Fannie Mae & Freddie Mac's liabilities. In other words, our national debt has grown by 12% this year, and we still have Q4 to look forward to.

Long story short, the USA is insolvent. Our public officials remain in denial and dangerously reactive. This year alone, taxpayers have swallowed $8 trillion via deficit spending, purchase of private debt, and increased money supply, i.e. printing $USD "out of thin air". This election season will pass and America will be faced with a deep recession and acute price inflation. All of the horrible consequences of this crisis will be realized regardless of half-hearted promises made by lame duck politicians trying to pass desperate, ill-conceived (and pork-laden) legislation.

Last friday taxpayers were robbed of $800 billion merely to postpone truth & consequences for 32 days. Of course, markets continue to plunge and our economic weather-vane is being wrenched from it's perch. Bailouts will not "fix" anything. Our problems are complex and systemic... there is no 'easy' button.

The will of the public was measured in the House of Representatives on 29 Sept. Although nothing has changed since then, taxpayers will suffer more abuse and indignity - either by further bailouts, or inflation, or both. There's no telling how long the pain will last and pity anyone foolish enough to proffer a guess. However, some hope remains. Many 'problems' can be voted out of office, some as soon as 04 nov. It's a start.

-- MP

Here's a simple truth, one that too many organizations and individuals are choosing to ignore...

The costs of energy and resources are increasing - permanently. Thus, self-sufficiency and renewable energy are neither gun-toting survivalist nor crunchy tie-died ideas... they are just smart business practices.

So let's cut to the chase. The more self-reliant an organization or individual can be with respect to energy and material inputs, the more viable and competitive that organization and/or individual will be. Classical economics teaches us that comparative advantage will inevitably determine specialization and exchange, and this axiom certainly holds sway in a low friction, open system (abundant energy at negligible cost) environment. But our world is shedding the cheap energy paradigm, and the new reality of finite resources and closed system physics is reversing the effect of global comparative advantage. Can this point be challenged? If not, then why are non-petroleum energy initiatives ridiculed and rejected? And why is said ridicule/rejection so often coming from 'conservative' politicians and pundits?

Please forgive this brief tangent... Why are supposedly 'conservative' interests chanting, "Drill, Baby, Drill!"? The very thought of tapping and depleting our remaining domestic fossil fuel reserves is in direct contradiction to the fundamental long-term security and viability of our country... proving that the "Drill, Baby, Drill" crowd are every bit as stupid as they look and sound. Perhaps this is just more evidence of the erosion of American principles (thrift, ingenuity, resolve, independence). Thrift and independence are dead. We now buy large and often, happy to borrow for that which we can not truly afford. Our independence naturally diminishes with every dime of debt we accumulate, individually and collectively. Ingenuity is alive and well, but it is more often demonstrated by immigrants - those who have come to this country to attain education and/or a livelihood. Resolve, too, is plentiful... but usually applied to selfish ends or the execution of poor judgment and misguided strategy. In fact, modern American resolve resembles stubbornness - an inability to think rationally or compromise... we are now 'resolved' to accomplish many bad things... the wrong things. Let us hope that new american leadership behaves more like an eagle and less like an ostrich. End of tangential rant.

Yet in the midst of this national collapse of principle and sound judgment, one can find strange bedfellows and reason for optimism. When a staple hippie mantra (renewable energy) also proves to be smart life and business practice (self-sufficiency), perhaps we are closer to one another (and to our country's founders?) than we presume. It is indeed time to meet your neighbors... we may find common ground where once a tall fence (of intolerance) stood. The coming "green economy" should provide ample opportunity for americans to demonstrate some renewed ingenuity, assuming we can move past superficial red/blue stereotypes that divide people who otherwise have far more in common than they care to admit.

-- MP