Economist Richard Duncan: Civilization May Not Survive 'Death Spiral'
By Terry Weiss
Richard Duncan, formerly of the World Bank and chief economist at
Blackhorse Asset Mgmt., says America's $16 trillion federal debt has
escalated into a "death spiral, "as he told CNBC.
And it could result in a depression so severe that he doesn't "think our civilization could survive
it
."
And Duncan is not alone in warning that the U.S. economy may go into a "death spiral."
Since the recession, noted economists including Laurence Kotlikoff, a
former member of President Reagan's Council of Economic Advisers, have
come to similar conclusions.
Kotlikoff estimates the true fiscal gap is $211 trillion when unfunded
entitlements like Social Security and Medicare are included.
However, while the debt crisis numbers are well known to most
Americans, the economy hasn't suffered a major correction for almost 4
years.
So the questions remain: Is the threat of collapse for real? And if so, when?
A team of scientists, economists, and geopolitical analysts believes
they have proof that the threat is indeed real - and the danger
imminent.
One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:
"We found an identical pattern in our debt, total credit market, and money supply that
guarantees
they're going to fail. This pattern is nearly the same as in any
pyramid scheme, one that escalates exponentially fast before it
collapses. Governments around the globe are chiefly responsible.
http://moneymappress.com/pro/Pyramid0712MMR2Y.php?code=PPYRN851&n=PYRAMIDMMR12EADMMP&utm_source=outbrain&utm_medium=ppc&utm_term=top&utm_content=small%2Bvideo&utm_campaign=death%2Bspiral
"And what's really disturbing about these findings is that the pattern
isn't limited to our economy. We found the same catastrophic pattern in
our energy, food, and water systems as well."
According to Martenson: "These systems could all implode at the same time. Food, water, energy, money. Everything."
Another member of this team, Keith Fitz-Gerald, the president of The Fitz-Gerald Group, went on to explain their discoveries.
"What this pattern represents is a dangerous countdown clock that's
quickly approaching zero. And when it does, the resulting chaos is
going to crush Americans," Fitz-Gerald says.
Dr. Kent Moors, an adviser to 16 world governments on energy issues as
well as a member of two U.S. State Department task forces on energy
also voiced concerns over what he and his colleagues uncovered.
"Most frightening of all is how this exact same pattern keeps appearing in virtually every system
critical
to our society and way of life," Dr. Moors stated.
"It's a pattern that's hard to see unless you understand the way a
catastrophe like this gains traction," Dr. Moors says. "At first, it's
almost impossible to perceive. Everything looks fine, just like in
every pyramid scheme. Yet the insidious growth of the virus keeps
doubling in size, over and over again - in shorter and shorter periods
of time - until it hits unsustainable levels. And it collapses the
system."
Martenson points to the U.S. total credit market debt as an example of this unnerving pattern.
"For 30 years - from the 1940s through the 1970s - our total credit
market debt was moderate and entirely reasonable," he says. "But then
in seven years, from 1970 to 1977, it quickly doubled. And then it
doubled again in seven more years. Then five years to double a third
time. And then it doubled two more times after that.
"Where we were sitting at a total credit market debt that was 158%
larger than our GDP in the early 1940s... By 2011 that figure was
357%."
Dr. Moors warns this type of unsustainable road to collapse can be seen
today in our energy, food and water production. All are tightly
connected and contributing to the economic disaster that lies directly
ahead.
Keith Fiz-Gerald: Germany's
military held a secret investigation into this unsustainable pattern
and concluded it could lead to "political instability and extremism." Details here
According to polls, the average American is sensing danger. A recent
survey found that 61% of Americans believe a catastrophe is looming -
yet only 15% feel prepared for such a deeply troubling event.
Fitz-Gerald says people should take steps to protect themselves from
what is happening. "The amount of risky financial derivatives floating
around the globe is as much as 20 times size of the entire GDP of the world," he says. "It's unsustainable and impossible to unwind in any kind of orderly way."
Moreover, he adds: "People can also forget that the FDIC can only cover
a fraction of US bank deposits. It's a false sense of security. Just
like state pensions, which could be suspended at any time. A collapse
could wipe out these programs. Entitlements like Social Security and
Medicare are already bankrupt and simply being propped up."
We can see the strain on society already.
In two years, Congress won't have any money for transportation, reports the Washington Post.
Cities like Trenton, NJ have layed off one-third of their police force
due to budget cuts. And other cities like Colorado Springs, CO removed
one-third of streetlights, trashcans, and bus routes, reports CNN.
Fitz-Gerald also warns of a period of devastating inflation. A recent survey, reports USA Today,
notes that in the coming years it could take $150,000 a year in
household income for a family to afford basic living expenses - and
maybe go out to a movie.
Right now, in fact, "52% of Americans feel they barely have enough to afford the basics."
"If our research is right," says Fitz-Gerald, "Americans will have to
make some tough choices on how they'll go about surviving when basic
necessities become nearly unaffordable and the economy becomes
dangerously unstable."
"People need to begin to make preparations with their investments,
retirement savings, and personal finances before it's too late," says
Fitz-Gerald
http://moneymorning.com/ob/economist-richard-duncan-civilization-may-not-survive-death-spiral/
