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perils of the 21st century

Perils of the 21st century

Several of the greatest perils facing average people in many parts of the world are economic in nature.

Many people have been caught off guard against economic starvation, and many more who still have jobs don't realize that it's a dangerous possibility. Globalization means that practically everyone is competing with everyone else worldwide for jobs, and instead of warning citizens of the western countries that this was the plan, the think-tanks promoted college educations? that for the most part failed to deliver promised economic benefits. Overvalued currencies in the western countries make the cost of living in those counties much higher than in countries like India and China, where workers can live well on dramatically lower wages than their counterparts in the USA, Canada, Australia, New Zealand, and Europe can. This has resulted in conditions under which it is difficult for people in the high-price countries to compete for jobs.

Another economic hazard is a breakdown in the monetary system. The current global monetary system is a fiat credit system, meaning that the units (dollars, yen, euros, etc) have no intrinsic value (fiat), and they are created on demand whenever money is borrowed through the financial systems. Compounding interest accrues on the money that is borrowed, at a rate that is roughly exponential. This results in a system that tends to become ever more unstable, as either the debt becomes unsustainable and leads to cascading defaults, or else the attempt to create enough money to roll over the debt results first in chronic inflation, then eventually in runaway inflation and finally hyperinflation. Contrary to a common misconception, the two possibilities are not mutually-exclusive. On the contrary, chronic debt repudiation and inflation are the norm.

Since it is money that makes multi-party trade possible, if the monetary system breaks down, so does the division of labor, with catastrophic results. It is impossible to maintain a civilized level of existence through complete self-sufficiency. As an alternative, we advocate mutual self-sufficiency.

Fiat credit makes leveraged speculation? possible. "Leverage" in this context refers to multiplying profits typically by speculating with borrowed money. Leveraged speculation is an economic hazard in its own right, because leverage not only multiplies profits, but losses as well. The use of leverage, typically by "hedge funds", has grown dramatically in recent decades.

Dishonest money makes it hard to make an honest living. Politicians who can't make an honest living turn to corruption?. Ordinary people who can't make an honest living turn to crime?.

Resource depletion causes two major problems. One is rising prices for necessities of life. The other is resource wars?. Young people who are shut out of employment opportunities might try joining the military out of desperation, which increases their risk of death or disability. Contrary to popular belief, they are unlikely to learn skills in the military that are marketable in a civilian economy. Since resource depletion is a problem that will not be going away in the near future, resource wars are likely to continue and escalate.

Resource wars increase the frequency of terrorism. There has been some confusion regarding who, precisely, carries out the acts of terrorism. The point of view of this website is that it doesn't matter much in terms of risk to life and property; it's not worth spending time pursuing issues over which we don't have control.

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