Sunday, August 7, 2011

Watching for Storms

Well, wasn’t that an interesting week? Major drops on stocks across the world, a downgrade of the US bond rating from AAA to AA+, and the continued debt crisis in Europe. Is it the end of everything? Is the shit hitting the fan? Should we bug out now?

Not hardly. By and large, the crises gripping the financial world haven’t come home to roost quite yet, although I would guess that some are winging our way. The sheer size and inertia of the world banking system means that a lot of the crud happening now may take days, weeks or months to have an effect on Mr. and Mrs. Average Canuck.

In fact, while analysts wring their hands about the US downgrading by Standard & Poors, the ‘slack’ may already be out of the stock market and little more may happen. On the other hand, Monday may see a bloodbath in financial circles. No one really knows for certain. Not that it will cause an immediate collapse of any kind.

The problem is that it’s one more straw. Events keep loading up, and we are looking at a possible confluence of events that might cause more problems than the sum of the parts. It’s not like this hasn’t happened before in history. A little reading will teach you that this has happened before. Economic collapse plus crop failure plus Mother Nature have combined countless times in countless variations to cause hardship for the human race somewhere. We’ve always bounced back.

The problem now is that where once a disaster in one part of the world left the rest of us unaffected, that is no longer the case. Epidemics are no longer constrained by distance, economic collapse by isolation, or political unrest by indifference. In our highly globalized and interconnected world, what happens there sooner or later has an effect here.

No need to panic, but there is a need to watch out for a number of problems combining to cause one that one perfect storm of events. Keep prepping, don’t obsess over the perfect plan, just keep working at getting better prepared. As I’ve said elsewhere, don’t get so caught up polishing the handrails that you forget to launch the life boat.

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