What sort of event could trigger an absolute economic collapse?

[arcadian]

A Black Friday type event. Something in the economic tapestry that has been unnoticed or overlooked, that would trigger a one day meltdown. Or some other sort of event, natural disaster, war etc.

[Greyhound]

1. There are so many, what do you have in mind? n/t

[Truth2Tell]

2. Even a small dirty nuke anywhere in the Western world

would be game over.

[safeinOhio]

3. Summer heat wave making

a modern day dust bowl out of the midwest ag belt.

[DoBotherMe]

46. Yes, ag is the only market in

Which we can depend on for income and sustenance... We just need to wrestle it away from the exploiters. Dana ; )

[leftstreet]

4. The economy is, and has been, collapsing for millions of people

It's the authentic 'trickle down'

[arcadian]

6. Yeah but I mean a day like Black Friday.

Where people in the future would point to it and say, "That was the day" Or such a scenario not likely to happen?

[leftstreet]

9. Doubtful the powers that be would let that happen

They'd be afraid we might actually react as a group

[sendero]

27. The powers that be..

.. .have already let it happen. What they haven't done is told the hoi polloi.

As for what could happen to make it undeniable to the hoi polloi, that is wide open and most likely the event that sets off the next leg down will be something that no one saw coming.

But for easy possibilities I'd include:

1) the failure of the Euro
2) another round of serious job losses
3) another pronounced downturn in housing prices causing massive defaults both strategic and actual
4) further CRE meltdown leading to more bank bailouts
5) bond market getting spooked at all the bailout debt and forcing short-term rates up, game over

[leftstreet]

32. Americans will stay in denial until the last Kohl's store closes

Not bashing Americans, just acknowledging the POWER behind the myth that 'You, too can become wealthy!'

[dixiegrrrrl]

25. China is in meltdown, they say.

Any of the "big" and/or EU nations declaring debt default would do it.

Seems like Goldman Sachs has its dirty paws in the Greece debacle, btw..
I suspect one day soon all fingers will be pointing at GS.

The definitive event may be
"On March 1, 1999, countries accounting for more than 90 per cent of the global financial services market signed onto the World Trade Organization's Financial Services Agreement (FSA). By signing the FSA, they committed to deregulate their financial markets.

For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA."

details:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x75715

[Political_Junkie]

42. December 12, 2000

Bush vs. Gore: http://www.law.cornell.edu/supct/html/00-949.ZPC.html

[CynicalObserver]

49. In retrospect, I think it will be when Lehman went under and the Fed took

over AIG. Some more informed people might point at when Bear was virtually given to JPM rather than let it fail.

[iceman66]

5. An attack on Iran,

leading to the closing of the Strait of Hormuz.

[DJ13]

7. The threat of a dissolution of the EU due to several countries near default

[Don Caballero]

8. Another war

[niceypoo]

10. Republicans take the whitehouse

...and reimplement Reaganomics

[stillwaiting]

18. The Democrats seem to be doing a pretty good job ensuring Reaganomics continues

albeit a slightly milder version I suppose.

Emphasis on slightly.

[lunatica]

11. It would have to make people afraid to travel or shop

Another airplane incident that's successful. It would bring air travel to a virtual stop. The rest of the dominoes would fall soon after.

[vadawg]

12. honestly it would have to be a massive outbreak of the undead

that would rent society apart, or a nuke going off though that might actually bring everyone together to melt the entire part of the globe that detonated the nuke..

[arcadian]

13. zombie apocalypse

:thumbsup:

[vadawg]

15. yup, and im afraid none of you would survive, for my family it would just be a typical friday

as my old man used to say if we are moving its friday...

[exboyfil]

17. That assumes you can figure out who really did it

[vadawg]

35. yeah they wouldnt have much trouble, they could tell were the radioactive source came from

and im pretty sure if your a nation that gave it to someone then you are going to be quickly talking before you get nuked...

[hatrack]

14. EMP nuke

That would be pretty much it for whatever continent it exploded over - failure of millions of computers, phones, electronic systems of all kinds.

[MercutioATC]

50. Bingo!

Three could take out pretty much the entire U.S.

Another 2 for most of Europe.

You'd have to waste another one just to get Japan, but you'd get a good deal of SE China, too.


6 EMP nukes would essentially bring the world to a standstill.

[On the Road]

16. There are Probably Many Different Scenarios

Generally, unexpected events such as Black swan scenarios require more than one thing to go wrong to bring them about. There are always possibilites floating around, most of which never happen. Modern economies are kind of a tightrope act anyway -- there is no such thing as a safe economic situation short of returning to preindustrial conditions.

Right now, the most likely trigger would be a credit default by Greece and perhaps one other country. A natural disaster would have to be a couple of orders of magnitude larger than the Haiti quake to cause a collapse, since rescue and restoration efforts cost money and are economically stimulative.

[givemebackmycountry]

38. WOW Road--- just followed your link

Read this:

Taleb enumerates ten principles for building systems that are robust to Black Swan Events:<9>

What is fragile should break early while it is still small. Nothing should ever become too big to fail.

No socialisation of losses and privatisation of gains.

People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

Do not let someone making an "incentive" bonus manage a nuclear plant – or your financial risks.

Counter-balance complexity with simplicity.

Do not give children sticks of dynamite, even if they come with a warning.

Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence".

Do not give an addict more drugs if he has withdrawal pains.

Citizens should not depend on financial assets or fallible "expert" advice for their retirement.

Make an omelette with the broken eggs.

Holy Shit.
Recognize any of those ten things?

[sendero]

43. I love Taleb's ideas...

... he's got it nailed.

[On the Road]

44. Yeah -- Taleb Was All Over the Place

on the financial channels after the meltdown 16 months ago. His book became a bestseller, partly as a result.

Meltdowns like the one we're living through now are driven by overconfidence and underestimating the liklihood that something will go wrong. Although it's often used for making accusations, it's human nature and very difficult to counteract, especially in a large group or network.

People tend to think of random events as being distributed along a bell curve or normal distribution, but many kinds of statistics are not distributed that way. Bernard Mandelbrot, who invented fractal mathematics, wrote
a paper early in his career about the misapplication of bell curves to markets, showing that bubbles and crashes are much more common in practice than predicted. It's an example of what statisticians call kurtosis risk.

[Toucano]

19. According to Elizabeth Warren

40% of banks are over exposed to commercial real estate.

1000's of community banks will have to tighten lending or go under.

Could undo the positive impact of TARP bailout.

[ldf]

20. guarantee wallstreet be held accountable for

all the crap they have done, and they would PURPOSELY cause the collapse. that would certainlly teach us....:sarcasm:

:shrug:

[mix]

21. A series of prolonged internal economic collapses, such as has occurred in our country

since the Reagan years, which have unfolded along class lines.

First, it was the economically and socially weakest among us--as the jump in poverty numbers show us since 1980: low-wage earners, factory workers, etc.

Now, it is the middle class who are crumbling: professionals and property owners.

[HysteryDiagnosis]

22. Greed squared. We can almost sustain the greed we have now

but squaring it would probably push things over the edge.

[reformist2]

23. China's economy could collapse

I've been reading that their banks have a lot of bad debts too - mainly from constructing too many apartments and factories.

[ensho]

24. a train of super storms would do it

nt

[slackmaster]

26. Explosive eruption of the Yellowstone Caldera

[flamingdem]

28. how 'bout unexpected simultaneous massive explosions of bowel gas ? nt

[OHdem10]

29. Economists have said the unemployment if not turned around can

lead to a double dip recession--no one would agree to call
that a Depression but I think we all know it would be.

Unless serious reform including the Volker Rule is imposed
on Banks, it is a matter of time until Wall Street Gamblers
repeat the crisis. As long as they have Main Street's money
to cover their back, they are human, they will over gamble
again. Why the Democrats do not hang this around the GOP
neck, I cannot understand. They are blocking Banking Reform.
They have to get down to the nitty gritty, not some generality
like--The Republicans are blocking. The GOP are protecting
the Banks and using Taxpayers money to do so.

These two would take a little time, not a sudden crash but
when it arrived we would all feel it.

[UTUSN]

30. Just about anything that IS manageable with some COMMON SENSE, instead of wingnut PANICKING!1 n/t

[readmoreoften]

31. Nothing. Capital can always regroup itself because it owns the material conditions of production.

There can be no natural disaster, war, or crash that can hurt it as a system, barring a physical, cataclysmic global event that sends us back to the middle ages. Until an event like that occurs (Day After Tomorrow, 2012), capitalism will only thrive off misery and devastation ("shock doctrine", etc.) The only thing that can stop capitalism, is a global working class that rises up and takes hold of the means of production (the factories, the armies, the transportation industry) through a series of strikes.

The one value we have isn't as "consumers". We can't stop eating, buying heaters and snow shovels and pens--and through planned obsolence, the latter three items will break within 10 uses. We also can't boycott EVERYTHING. The reason why Cesar Chavez's grapes boycott worked is because it was limited.

The only effect we can have is as workers. The capitalist class can't run their factories, design their iPads, pick their food, mine their diamonds, kill their enemies, drive their trucks, deliver their packages in armored vehicles, make their lattes, build their houses, operate their trains, pilot their aircrafts, debug their code, teach their kids, grow their coffee, fix their cars, pasture their butter, massage their backs, market their widgets, print their catalogs, wire their ceiling fans, or bottle their wine.

Capitalism will collapse when we stop doing all this for them and we say: we'll run the factories for ourselves, make our iPads, pick our food, make our lattes, build our houses (or take the 'surplus houses' that they plan to demolish to 'correct the market'), operate our trains, pilot our aircrafts, debug our code, teach our kids, grow our coffee, fix our cars, pasture our butter, and wire our own ceilling fans. You can join in and earn your keep, or you can starve. Sounds harsh? That's how the rest of us have been living all along, deal.

Or we can wait until we bomb ourselves back into the middle ages.

[leftstreet]

33. +1

:applause:

[alittlelark]

37. +10

Very good answer.

[tama]

39. Capitalism as we know it

is very fragile and is allready collapsing because of it's own impossibility. Capital investments don't create any more fossile energy capital in the ground than the biosphere has formed or economic growth based on growing use of fossile energy capital.

What strikes me very odd is why the critics of capitalism from the Marxist materialistic orientation fail to see the material limits of growth and the impossibility of a growth dependent system like capitalism as we know it to continue beyond the limits of growth. Sure, the system can pretend to grow for some time when it's allready in overshoot, but those are just minor details.

Of course during the collapse phase capitalism can mutate into even more terrible beast, but then it would be something else than capitalism as we know it.

PS: my hypothesis why it is so hard for Marxists to understand and recognize material limits of growth is because of the fools dream of a socialist revolution taking over the capitalist state system and with minor adjustments running a socialist state of (industrial) workers paradise that satisfies all the material needs that industrial workers and politbyro technocrats can imagine. What history of revolutionary processes like Cuban and Bolivarian revolutions teaches is that a socialist revolution cannot take over the capitalist state machine and turn it into something benign, what they can do most is to keep the capitalist state structures under control while building new parallel structures or destroying the capitalist state and rebuild a socialist state. And to make situation even more gloomy, all that can really happen only on global level according to the Marxist theory. :)

[mix]

40. humans created it, humans can change capitalism

+1

[jtuck004]

34. Anything that causes a large, upward, and sustained spike in

the price of oil, a powdered virus let loose on the population, a naturally occuring mutation of a virus such as the hiney (h1n1), China deciding that their strategic interests would be served by dumping the debt we owe them, followed by at least Japan, our government becoming convinced by so-called conservatives that we need to stop spending - none of those as dramatic as a nuke, but certainly just as effective.

As a person in ill health is much more susceptible to any illness that a healthy body could have resisted, our economy could be described as moderately fragile at the moment, so it might not take as much as it would have in other years.

Were you speculating, or just trying to decide if you should stockpile beans and water? ;)

[JustABozoOnThisBus]

36. The passage of universal single-payer health care

... oh, wait, no, that's the Republican view.

:hi:

[JVS]

41. Populist faction of Chinese Communist Party gains power in Politburo, starts spreading wealth to...

Chinese workers or decides to invest its tax surpluses into China instead of lending it to the US, and takes a harsher stance to international companies' activities within China. The day that shift in the Politburo happened would be remembered.

[Coyote_Bandit]

45. An economic collapse?

Well, since we have an economy largely built on wealth creation and consumption it wouldn't take much. Too bad our government isn't willing to institute policies that would move us toward real economic productivity.

[Union Yes]

47. China decides to stop borrowing to fund our deficit spending. nt

[H2O Man]

48. The reduction in rates for

third-class mail.