PowerSwitch

From http://www.powerswitch.org.uk/forum/vie ... php?p=2535:

snow hope wrote:

DamianB wrote: "Our society is not going to collapse overnight. No-one in this country will die of starvation in the next 20 years."

Damian, I very much hope you are right. But as you know we can't predict the future especially when something that has never happened before is about to happen. In worst case scenarios, I feel that things could go belly-up much quicker than you expect. In my opinion there is a definate chance that things could get pretty nasty in large population centres especially in winter, when lack of affordable fuel will impact people's ability to heat themselves, spiralling prices of electricity will leave people in the dark, lack of commercial transport will leave supermarkets bare, lack of work will leave people with no money. Lack of money will leave people on the streets - evicted from their homes.....

No offense my friend, but it is not hard to see how things could spiral out of control quite quickly. Our society really is at a stage where it is like a deck of cards based on complex interrelationships with cheap and ever-lasting energy at the bottom.

I hope I am wrong, but I am still pretty scared about what is about to happen. We must be aware that this has never happened before and we have no mechanisms in place for dealing with the collapse that will ensue.

Overall, my own personal view is that no better or worse scenario is more likely then any other - those people that think one IS more likely than the other must have some reasons for thinking such, which I would be interested to hear.

Since we have snow's initial feeling, I would be interested to hear DamianB's reasons for optimism.

From the old thread:

hatchelt wrote:

snow hope wrote:Lack of money will leave people on the streets - evicted from their homes.....

can you really see this happening? i mean, think about it for a second, you're talking of tens of thousands, maybe hundreds of thousands of people being evicted...england would melt down in a matter of months, complete anarchy...no government is gonna let that happen, there'd be more homeless people on the streets then police!

Even tho we are never short of negativity on this subject, while we're waiting for some optimistic feedback, and without nesseccarily favouring the pessimists I would like to add a few sobering observations:

1) A slow and gental recession-style wind-down suggests an otherwise strong and stable economy that has to only deal with energy prices/availability - I do not think you can say this of the UK (or many other western) economies.

2) The Uk has personal debt at huge levels - the only thing that keeps these wheels turning is decent well-paid jobs for everyone (many households need two wage earners to keep afloat). Forgetting about PO for a minute, this whole personal debt bubble could unwind with the least bit of provocation

3) Hedge funds use LOTS of borrowed money and Pensions funds use all our hard-earned to speculate on the stock market. If ever they were to be caught unawares with a sudden downward shock then everyone's pension fund and some big banks could find themsleves insolvent.

4) Some core strands of our economy are crucial to big business interests - any UK gov would find itself trapped between the rock of doing the best for the little people and the hard place of big biz not wanting to see their model totally colapse. This could disuade any gov from taking all the actions it might in the interests of us little people

I think that I might go for a bit of a mixture:

slow-slow-quick-quick-slow


Initially, I think that we are heading towards a recession, which is not particularly PO related, though higher fuel and winter heating bills won't help. This will damp energy demand (judging by the number of housing bubbles around the world, it's likely to be a global recession), and push the peak out a bit.

In due course, we'll get a recovery, which probably will take us up to energy limits, and therefore another recession, and therefore another drop in energy demand.

We'll continue in this fashion until we don't come out of recession, then I suspect that we will fall pretty quickly (partly because all the recessions will mean that we haven't been able to do much to prepare ourselves for an oil-less economy).


Peter.

P.S. All the above is just guess-work, and I have no particular economic knowledge.

You quote me, but I didn't write that !

This is a good question.

How do they do it now?

The owners of the title to your home take you to court, who ORDER you to leave (tho most people leave before then anyway).

Threats and court-orders would get a fair few people out of their homes without any personal visits at all - don't forget people won't be thinking forwards like us, they just be doing what you do in today's paradigm when you don't pay the mortgage.

Eventually tho you'd expect people to wake up to the fact that mass "squatting" would take an awful lot to overcome.

He's where it could get tricky - in the past, gov's have setup state-entities to take on failing mortgages from the banks to prevent a banking collaspe, BUT if the number of defaults is SO GREAT, the gov might not be able to fund it.

If banks colaspe their assets usually get bought up by the very wealthy or the sharks, both of which want revenue from the homes they now own.

Since NO ONE would be able to afford a mortgage any more it's reasonable to assume that many new owners will rent out the houses, maybe even to the original and still-squatting residents.

Alas, this will signal a return to the bad old days of land-ownership in the hands of the very few and homeless millions needing to work FOREVER to pay rent in a never-ending slave-like serfery.

Work at what? Perhaps lousy manual labour in poor conditions in return for a rental credit on the house? I don't know, it's not a very appealing prospect.

What the gov SHOULD do is inact legislation giving all mortgage owners the rights to thier house outright regardless of how much they still owe, write-off the mortgages.

That would give everyone a roof over their heads no matter what.

Alas, it would RUIN many large and powerful institutions and businesses which means that it will not happen, right?

fishertrop wrote:If banks colaspe their assets usually get bought up by the very wealthy or the sharks, both of which want revenue from the homes they now own.

This is the pivotal point indeed: Which paths are available to the new "owners" to extract maximum value for themselves out of foreclosed homes? Based on the experiences from the Soviet collapse, Dmitry Orlov belive that a lot of US homes will be dismantled and sold in pieces. It is thinkable, at least if someone bought the failed loans at sufficiently low prices. Maybe the same could happen in the UK? Dismantling a house will effectively prevent squatting anyhow.

Very true, tho Uk houses are perhaps less suitable for sale as raw materials as they are all brick - many US houses are predominently timber, which I can see has other uses/values. I don't know the style of ex-Soviet houses.

True if a buyer picks them up for next-to-nothing then maybe just the bricks and tiles are worth breaking down, esp with cheap labour.

This is why paying off your mortgage seems like the NUMBER ONE absolute prime thing you can do as an individual.

I think Blue Peter has the answer (though maybe not the rhythm

It'll be messy - some things and some places and some people will be affected faster than others. For a few the 'crash' may even provide new opportunities (there will always be winners)

I think the trick may be to remain alert and flexible enough in your responses to react quickly when you need to. On the one hand it'll be about not allowing cultural stasis (sticking with now inappropriate cultural assumptions about how the new world is) to prevent you from taking necessary steps, and on the other hand it will be about preserving the things that are useful in creating your identity in relation to the world.

Fast crash/slow crash is not the question - for sure some will crash and burn more or less quickly, but others will go on and be the winners in the new post-oil world (whose shape we can yet but dimly discern).

Personally I don't think taking to the hills (or another country) is the answer. Jumping too soon could be as bad as getting stuck with your head in the sand.

RogerCO wrote:I think Blue Peter has the answer (though maybe not the rhythm

It'll be messy - some things and some places and some people will be affected faster than others. For a few the 'crash' may even provide new opportunities (there will always be winners)

I think the trick may be to remain alert and flexible enough in your responses to react quickly when you need to. On the one hand it'll be about not allowing cultural stasis (sticking with now inappropriate cultural assumptions about how the new world is) to prevent you from taking necessary steps, and on the other hand it will be about preserving the things that are useful in creating your identity in relation to the world.

Fast crash/slow crash is not the question - for sure some will crash and burn more or less quickly, but others will go on and be the winners in the new post-oil world (whose shape we can yet but dimly discern).

Personally I don't think taking to the hills (or another country) is the answer. Jumping too soon could be as bad as getting stuck with your head in the sand.

Listen up folks! This is the soul of the entire thing. Big and many cudos.

Related conversation:

- Exactly how did you go bancrupt?

- Well, first gradually. Then suddenly...

Very intersting so far.

Any of the 60% that have voted for Slow (at the time of writing) care to post some more specifics on why they favour this outcome?

Doesn't anybody remember what the fuel protests were like???

On the second day of the fuel protests I went shopping for food... NO BREAD, NO MILK, NO WATER! This was my first experience of what happens when people panic, they start hoarding and acting in a very selfish manner! All it takes is for someone to spread a rumor that the food supply is going to run out, and then because people start taking more than their fair share it does! In any crisis a few people will act in a calm manner, and the other 99% will panic and kill everyone else.

Human nature alone will cause the crash to be fast.

As I still haven't got around to writing my own slow crash essay, here's one that I'd like to have written:

Imagine the end of the world in moderation. It's hard. We tend to imagine that either the "economy" will recover and we'll go on like 1999 forever, plus flying cars, or else one day "the apocalypse happens" and every component of the industrial system is utterly gone.

I'm not ruling out a global supercatastrophe. A runaway greenhouse effect might turn Earth into another Venus and cook us all. Acidification of the oceans might kill the plankton, and with them everything that needs a lot of oxygen. An instant ice age could happen several ways, and this scenario needs more attention because some humans would survive. But what I'm focusing on here is the scenario that includes only events we're reasonably sure about: the end of cheap energy, the decline of industrial agriculture, currency collapse, economic "depression," wars, famines, disease epidemics, infrastructure failures, and extreme unpredictable weather.

If that's all we get, the crash will be slower and more complex than the kind of people who predict crashes like to predict. It won't be like falling off a cliff, more like rolling down a rocky hill. There won't be any clear before, during, or after. Most people living during the decline and fall of Rome didn't even know it. We're told to draw a line at the sack of Rome by the Visigoths, but to Romans at the time it was just one event -- the Visigoths came, they milled around, they left, and life went on. After the 1929 stock market crash, respectable voices said it was a temporary adjustment, that the economy was still strong. Only years later, when we knew they were wrong, could we draw a line at 1929.

The Slow Crash by Ran Prieur

Does anyone remember what happened the last time we had a housing crash? To start with the banks and the baliffs turned people out but because no-one was buying and there was nowhere to get rid of the property, eventually the banks just came to terms with heaps of people and agreed to let them stay in their houses and have negative equity until the householder could sell the property themselves and pay it all off. I can see this happening until the point where the banks just go "oh, oh, panic".

During the last fuel protest I was walking around a supermarket in East London that was a complete desert, people are just so irrational.

Im not sure the fuel protest 2000 is a good example/reason for a fast crash.

PO is about depletion at 3%-8% per year, not 100% in 2 weeks (as per the fuel protests)

As for panic buying. Rationing will sort that out! Either by central government or price.

As for the personal debt comment. Yes, debt is at all time highs but you must remember that the 1 trillion figure includes mortgages.

So per household debt = 45K ( 1 trillion divided by 22m households)
So per mortgage = 83K (1 trillion divided by 12 million mortgages)
So per person = 16K (1 trillion divided by 60 million)

Now consider the average houseprice is 174K, cut in half to allow for the "bubble", and assets are still > debt.

Average income is 20K-25K, so debt per household (2 workers) is equal to one years salary.

Its bad , but not catastrophic (yet? )

Call me pedantic and I know you're only doing some rough twiddling there with those figures but not every debt will include a mortgage, and so not every mortgage will have extra debt, or are you assuming these even out across the country? Oh, we could play at this for hours!