The Next Crisis No One Is Talking About

Posted on November 8, 2011 by MN Gordon

Mark Twain once remarked, “Whiskey is for drinking; water is for fighting over.”  If the convergence of water scarcity factors currently shaping up comes to pass, this could be the century of water wars.

No doubt, a devastating water crisis is approaching.  While the world once possessed a massive supply of fresh water, human mismanagement of this precious resource has resulted in an abundance of scarcity issues.  Rivers, lakes, reservoirs, and below ground aquifers are drying up…and those that haven’t are so polluted proper water treatment would cost a fortune.

Without fresh, drinkable, water humans cannot live.  Moreover, just a temporary water supply disruption would wreak havoc on the economy.  If the water supply were cut off to your city what would happen?

It’s probable that within one week the whole place would verge on disaster.  The sewage problem alone would be horrific.  On top of that, if water resources were cutoff to the vast irrigation network that supplies agricultural fields and makes the desert bloom, food production would crash and chaos would follow.

Yet no one is talking about this looming crisis… Continue reading →

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Warning Signs of a Financial Vesuvius

Posted on November 4, 2011 by MN Gordon

The Day Mount Vesuvius Blew

“Injustice, swift, erect, and unconfin’d,
Sweeps the wide earth, and tramples o’er mankind” – Homer, The Iliad

Everything was just the way it was supposed to be in Pompeii on August 24, 79 A.D.  The gods had bestowed wealth and abundance upon the inhabitants of this Roman trading town.  Things were near perfect.

Residents of Pompeii lived in large homes with elegant courtyard gardens and all the modern conveniences.  Rooms were heated by hot air flowing through cavity walls and spaces under the floors.  Running water was provided to the city from a great reservoir and conveyed through underground pipelines to houses and public buildings.

Fresh fish from the Bay of Naples were readily available in the Macellum (great food market) and countless cauponae (small restaurants).  Entertainment was on hand at the large amphitheatre.  Life was agreeable, affable, and idyllic for all…and it was only getting better.  Everyone just knew it.

By 79 A.D. Pompeii had experienced nearly uninterrupted advancement from its founding almost 700 years earlier.  That this would ever change was unthinkable Continue reading →

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The Decline of Per Capita Wealth

Posted on November 1, 2011 by MN Gordon

Yesterday was a momentous day.  According to the State of World Population 2011, published by the United Nations Population Fund, it was the day world population topped 7 billion people.  We find this to be momentous not just for the sheer size of the population, but, more importantly, for the rate at which it is increasing.

For example, at the time of Christ’s death the world’s population was around 300 million. Slowly, over the next 1800 years, the planet added 700 million more people…hitting 1 billion when John Adams was President of the United States…and causing quite a shock to the intellectuals of the day.

The world’s burgeoning population produced visions of apocalypse for English economist, Robert Thomas Malthus.  Between 1798 and 1826, he scribbled six editions of his famous treatise, An Essay on the Principle of Population, in which he predicted a massive collapse brought about by population increasing faster than the supply of food.

Of course, Malthus was dead wrong.  Just 127 years later, in 1927, world population hit 2 billion.  Then, 32 years later, in 1959, the 3 billion mark was reached.  Fifteen years later, in 1974, the population topped four billion.  Thirteen years after that, in 1987, five billion was surpassed Continue reading →

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Bringing About Our Own Special Misery

Posted on October 28, 2011 by MN Gordon

Consumer confidence laid a rotten egg in October.  The Conference Board’s index of consumer sentiment was reported Wednesday at 39.8…its lowest reading since March of 2009.  To put this in perspective, during a robust economy, consumer confidence readings are at 90 and above.

Consumer spending accounts for about 70 percent of the U.S. economy.  Hence, consumer confidence is a key indicator.  If consumers do not feel good about the direction of the economy and their income they are less likely to spend money.

Obviously, consumers don’t have much to be excited about.  Stocks have gone sideways for the last 12 years, houses are underwater, and median middle class pay has dropped 7 percent over the last decade.  According to the Conference Board, about twice as many people now expect a pay cut over the next six months as expect a raise.  Others, including recent college graduates, can’t even find a job.

For example, as reported by the Bureau of Labor Statistics, the unemployment rate for college graduates under the age of 25 is nearly 14 percent.  Considering, too, that the Class of 2009 began their career years with an average of $24,000 in student debt, there’s a good chance many of those loans will go bad Continue reading →

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