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Friday, June 26, 2015

Collapse Part 3 : No Institutional Path To Contraction

There is however a path to destruction - and America is firmly on it  

WASHINGTON'S BLOG
06/25/2015

One poorly understood source of collapse is the lack of pathways to contraction and a reduction of complexity/cost. 


The only pathway that is clearly marked is the one to expansion–of production, debt, credit, government, income, benefits, costs and complexity: more agencies, more regulations, more committees, more staff, more of everything.

The path to less complexity, less debt, less production and a contraction of the entire system doesn’t exist in most institutions.


Many dismiss any talk of collapse as mere fear-mongering. 

This is a legitimate issue to discuss, for if we focus exclusively on the lurid horrors of being killed by a shark in open water (for example) while ignoring the much higher risks of being killed by falling off a ladder at home, we have distorted the risks of accidental death and done a disservice to our understanding of various risks.




But collapse is not an event, it is a process. As a result, systemic collapse doesn’t lend itself to statistical calculations of probability. Processes are driven by dynamics, not odds.

So those dismissing any discussion of collapse as mere fear-mongering are doing a disservice to our understanding of processes–or lack thereof. One interesting feature of collapse is that it can result from either a choking over-abundance of complex, costly processes or a complete lack of essential processes, conceptually and practically.


One interesting feature of collapse is that it can result from either a choking over-abundance of complex, costly processes or a complete lack of essential processes, conceptually and practically. 

Which  brings us to the process that is lacking virtually everywhere–the process of contraction: shrinking the system, income, headcount, complexity and being productive with less of everything.


The corporate world offers many examples of what happens when the process of contraction and reducing complexity does not exist: companies buckle, fold and go bust. 

The world’s corporate darling Apple experienced this precise death-spiral in 1996-1997 before the company’s board brought Steve Jobs back as CEO. (So tentative was the board that Jobs was appointed “interim CEO.”)

Apple had only one path: expansion. More fiefdoms, more staff, more product lines, more models, more sales, more profits. The reversal from profits to losses marooned the company, for there was no institutional history of a vast reduction in products, fixed costs and organizational complexity.




Not only was there no institutional history of downsizing, there was no conceptual or practical pathway from unprofitable bloat and institutional failure to a leaner, flatter more productive system. 

Without an emergency infusion of cash from Microsoft and the appointment of a manager empowered to slash and burn fixed costs and re-set priorities and product lines, Apple would have collapsed.


The same can be said of the European Union. 

The bylaws of the EU (as I understand them) define the pathway of expanding the EU but not the pathway of forcibly shedding members. Member nations may elect to leave the EU of their own volition, but there is no mechanism in place for the EU to eject member nations such as Greece.

In other cases, systems are structured so any contraction leads to collapse. 


This is the nature of our debt/leverage-based financial system: any contraction in debt, credit or inflation will bring the system down because the system is predicated on the permanent expansion of collateral to support more debt and the expansion of income to service debt.

If either collateral or income declines, the system implodes:




This is not an event, it is a process. If debt and leverage expand while collateral and income decrease, the system becomes systemically more fragile and prone to destabilization. The financial system is dynamic and has multiple inputs; on its current setting, the system will become increasingly fragile. If alternative policies were put in place, it could become increasingly resilient.

Systems with no conceptual or practical pathway to contraction and reduced complexity/fixed costs are more at risk of collapse than systems with institutional pathways for successful reductions in debt, credit, income, fixed costs and complexity.




How many institutions have proven pathways for becoming smaller, leaner, and flatter in organizational structure? Very few, as the default setting for the past 60 years has been expansion and more of everything. Less of everything does not compute.



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ANDREW KREIG: EXPERTS REJECT FIRE AS CAUSE FOR 9/11 WTC COLLAPSES

The real truth on 9/11 slowly continues to bleed out

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Technical experts are mounting major challenges to official U.S. government accounts of how three World Trade Center skyscrapers collapsed in near-freefall after the 9/11 attacks 15 years ago.

Many researchers are focusing especially on the little-known collapse of

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The Geopolitics Of The United States, Part 1: The Inevitable Empire

The Empire and the inevitable fall of the Obama criminal regime

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STRATFOR Editor’s Note: This installment on the United States, presented in two parts, is the 16th in a series of STRATFOR monographs on the geopolitics of countries influential in world affairs.

Like nearly all of the peoples of North and South America, most Americans are not originally from the territory that became the United States.

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Geopolitics Of The United States Part 2: American Identity And The Threats of Tomorrow

A look back at 2011 predictions for the future in order to put events of today into perspective

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We have already discussed in the first part of this analysis how the American geography dooms whoever controls the territory to being a global power, but there are a number of other outcomes that shape what that power will be like. The first and most critical is the impact of that geography on the American mindset.

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By Robert S. Finnegan

This e-mail outlines and confirms the acts of espionage against Indonesia and Indonesians by Akiko Makino and the others involved both in Kobe University and in AI Lab at University of Airlangga, Surabaya; Bahasa Indonesia original follows English translation...

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UPDATED 01/07/2015 : New Analysis Challenges Tamiflu Efficacy; Hong Kong Corona Virus Outbreak

UPDATED 01/07/2015 : FOX NEWS CORPORATE PHARMA SHILL MEGAN KELLY AND FOX NEWS QUACK DOCTOR NOW PUSHING TAMIFLU FOR PREGNANT WOMEN AND CHILDREN;

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THE 5TH ESTATE UNEQUIVOCALLY WARNS THE PUBLIC NOT TO TAKE OR GIVE THIS PROVEN DANGEROUS, INEFFECTIVE DRUG TO ANYONE

Obama criminals now resulting to biowarfare in quest to destroy Chinese and ASEAN economy; "novel virus substrain" points directly to a Kawaoka / Fouchier / Ernala-Ginting Kobe lab virus weaponized and genetically altered to specifically target and infect the Asian population: Ribavirin...

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The 5th Estate has just purchased a library on H5N1 "Novel" virus pandemics, there are dozens of PDF and Exel documents we feel will assist you in saving lives following intentional releases of the H5N1 and now MERS viruses; we will begin by printing those that appear to be extremely relevant here: H5N1 Kobe-Kawaoka-Ernala series continues soon with more "Smoking Gun" e-mails from Teridah Ernala to The 5th Estate . . .

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By Robert S. Finnegan

On October 12, 2002 the Indonesian island of Bali experienced a terrorist attack that rocked the world. It was unquestionably well-coordinated and executed, the largest in the country's history.

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