Dmitry Orlov: The Five Stages of Collapse

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Dmitry Orlov: The Five Stages of Collapse

March 13, 2009

in Economy

Dmitry Orlov: The Five Stages of Collapse and an interview on Russia TV…

America must work on starting a new economy and not restarting the old one or it will resemble the former Soviet Union, says author and blogger Dmitry Orlov. Here is an excerpt from his blog…

Stages of Collapse

Stage 1: Financial collapse. Faith in “business as usual” is lost. The future is no longer assumed resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.

Stage 2: Commercial collapse. Faith that “the market shall provide” is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down, and widespread shortages of survival necessities become the norm.

Stage 3: Political collapse. Faith that “the government will take care of you” is lost. As official attempts to mitigate widespread loss of access to commercial sources of survival necessities fail to make a difference, the political establishment loses legitimacy and relevance.

Stage 4: Social collapse. Faith that “your people will take care of you” is lost, as local social institutions, be they charities or other groups that rush in to fill the power vacuum run out of resources or fail through internal conflict.

Stage 5: Cultural collapse. Faith in the goodness of humanity is lost. People lose their capacity for “kindness, generosity, consideration, affection, honesty, hospitality, compassion, charity” (Turnbull, The Mountain People). Families disband and compete as individuals for scarce resources. The new motto becomes “May you die today so that I die tomorrow” (Solzhenitsyn, The Gulag Archipelago). There may even be some cannibalism.

ClubOrlov: The Five Stages of Collapse

 

Here is an Interview Dmitry Orlov did with Marina Portnaya of “Russia Today”…

A little to ponder…


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Tagged as: Dmitry Orlov, Marina Portnaya, Russia Today, US economy collapse

  • Anonymous

    The problem is that most economists don’t recognize the fact that government debt of a currency issuer is not remotely analogous to household debt. Why? For starters, no one in a household is the monopoly producer of money. What exactly is it? Government “debt” of an issuer is the “savings” of the currency users as a matter of accounting. The issuers debt is simply a digital resource – a digital account corresponding to all the users’ savings in banknotes, deposits, and treasuries. The issuer’s debt creates the supply of currency, or savings, that people either spend or choose to save. A common misperception of our monetary system is that the issuer “borrows” from currency users, such as the US borrows from China. This is not only a complete misunderstanding of our monetary system but leads to catastrophic outcomes when the currency is not managed correctly – just look at our middle class. The correct interpretation of “debt” is that the US government produces the currency that China choses to save.The more China saves the more debt our government takes on. A mutually beneficial relationship with little downsides as long as the currency supply is optimized to the conditions. Most of the academic community continues to trip over itself because of their complete failure to grasp the fundamental nature of our monetary system.

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