IS the global financial system still breaking down?
Given the drumbeat of news we are getting, it’s just getting started.
We see the breakdown in Europe, where Spain is nationalizing banks in a futile attempt to prevent bankruptcy and a bankrupt Greece is playing political lotto, on its way out of the Euro.
We also see it on Wall Street, where JP Morgan reported a multi-billion dollar loss due to risky bets on financial derivatives they didn’t understand. For our purposes, the news from JP Morgan was particularly interesting, because it demonstrated:
- The big banks are still making lots of risky, highly leveraged bets. Why? It’s a sure thing. If they win, they keep the money. If they lose (and they will), the public bails them out.
- Wall Street still doesn’t understand the $700 trillion derivative market (that’s 10 times the global economy!) it created. To wit: JPMorgan’s risk management software is THE industry standard and it’s supposed to make this type of loss impossible.
- The government didn’t “fix” the global financial industry at all. This article by Matt Taibi shows how the process of reform was thoroughly corrupted.
Becoming Resilient Isn’t an Option
Why did I bring this up?
I think it’s important to remember that becoming resilient isn’t merely a lifestyle choice or a neat thing to do. Instead, given what’s ahead of us, it’s an imperative.
It’s the way to protect ourselves and our loved ones against a turbulent future. A future filled with financial, environmental, resource, health, political, and economic disruptions. Disruptions that nobody can stop.
What happens if you become resilient?
Perhaps I’m being hasty with this. You do have a choice. You can either:
- Do nothing.
- Become resilient.
What happens if you do nothing? Given what’s ahead of us: You will suffer, complain, protest, stagnate, and fail.
Why? You’ve attached your future to a system in decline.
In contrast, if you choose resilience: you, your family, and your community have a good chance at prosperity.
My personal choice? I choose prosperity. I choose resilient communities that have human scale local economies and direct connections to dynamic global networks for innovation and insight.
I have too much to do to protest or complain. Too much to build. The future awaits and it looks amazing.
Your very happy to be on this journey with you analyst,
PS: If you are on the Iberian Peninsula and want help transitioning to resilience. You should connect with my good friends in the Las Indias network. They built a road map for transitioning to networked resilient communities. More on their efforts later.