[Editor's Note: Today we bring you a different type of article from Jeff Thomas. As International Man has grown, more and more readers have come to see Jeff as an interesting and insightful writer on what's coming round the bend from a geo-eco-political point of view. Following is a compilation of some of the questions he's received directly from our readers, formatted into an interview format. Enjoy.]
International Man: Many people today are speculating the fate of the world in the next few years – what you term, “the Great Unraveling” – the crash of the markets, the devaluation of the dollar, etcetera. However, you also comment frequently on what will happen after the unraveling, which is not being discussed too much by others. Since there is so much uncertainty as to the immediate future, why the emphasis on the period after it?
Jeff Thomas: Well, in a sense, I feel that there is certainty to the immediate future. If you were to turn on the News, you would be given the impression that either the conservatives or the liberals have the answer to rebuild the economy. I have to say that, to me, this is nonsense. Neither the conservative party nor the liberal party is going to fix the catastrophe they have jointly created. The die is cast. Greece can remain in the EU, or exit it, but it matters little which they do. It's just one domino. Ultimately, there will be default and it will trigger other defaults within the EU. A crash is inevitable. Same for the US. The bomb has already been released from the Enola Gay, it just hasn't reached Hiroshima yet. So, yes, I spend a fair bit of time analyzing the details of the Great Unraveling, as it is the foremost economic occurrence of our lifetimes, but the event itself is a foregone conclusion in my mind.
On the other hand, it seems to be my general nature to focus on the far horizon – especially in negative times. If nothing else, the prospect of a more positive time at some point in the future allows us to be more honest with ourselves regarding the mess we're presently facing.
IM: So, you see the Great Unraveling as inevitable; that, even in the unlikely event that the governments of the world reversed gears and did exactly the right thing, the situation could not be reversed?
JT: That's correct, yes. And that would be true even if the bomb was still in the Enola Gay and the bombardier hadn't pressed the button yet. At this point, the rot has set in with a vengeance in the countries of the First World. At some point in any society, the deterioration becomes similar to cancer. Once the cancer becomes systemic, the doctor just gives you something for the pain and tells you to go home and sort out your affairs. Similarly, if a nation goes down the road to entitlement, debt and all the rest, at some point, a major reversal becomes necessary to solve the problem and the voters will not accept that. They will vote instead for whoever promises “a chicken in every pot”. This, of course, seals their fate, but every seasoned politician knows that if he tells the voters the truth, he will be voted out. So, of course, he lies to them and says it's all going to be okay, as long as he is elected. If this were not the way it works, people would not vote so overwhelmingly for such empty and undefined remedies as “Hope” and “Change.”
It's the norm for people to say, “This is negative thinking. I prefer to be positive and hope for the best.” I disagree. I believe that, once an outcome is inevitable, it's foolish to continue to delude ourselves that, by some miracle, it will all work out all right. I think that the truly positive view is to say, “Right – the First World is unraveling and, after a series of collapses, in a few years, we will be looking at the rubble. So let's roll up our sleeves now and begin to plan our alternative world.” I don't consider that to be negative thinking. I consider it to be very positive thinking.
IM: When discussing the future of the world, you frequently make a distinction between the First World and the rest of the world.
JT: That's true. Most people who are asked their opinion on the current crisis are either North American or European and that means that, whether they mean to or not, they tend to think of these places as “The World”. Although I'm British, I don't live in the UK and I'm not strictly a first-worlder. I'm a product of multiple cultures and I have flags in several countries. Therefore, it may be easier for me to bear in mind that the events that are happening in the First World are not necessarily going to impact the rest of the world in the same way. Some non-First World countries will be negatively affected, some will be positively affected and some will not be affected much at all.
IM: But you do recognize that the Second and Third Worlds are not necessarily perfect examples of countries that have not been corrupted?
JT: Oh, yes, very much so. I don't know of a single country in the world, including my own, that does not have some level of government corruption, some level of entitlement philosophy, some level of corporate fiddling and all the rest of it. However, I believe very strongly in the concept of cycles in countries. For every emerging country, there is either a dormant period or a long slow climb, followed by a rise in productivity and wealth production, followed by a period of selfish behaviour, then a decline into complacency and apathy. The curve is always the same for every country's development and eventual decline. As luck would have it (bad luck, that is), most of the First World countries are in the final stages of decline, in which the process speeds up dramatically before the inevitable collapse. Therefore, in looking around the world, we should examine where on the curve other countries are. If you are young, your ideal may be a country that has just begun its upward surge, as you want to be a part of it. If you're at retirement age, you may prefer a country that is in its dormant period, as you may be seeking peacefulness and predictability with limited inflation. No one should move to, say, Costa Rica, just because a lot of others are doing so. Do your homework. Put together a chart – a wish list. Then pick the destination that most closely works for you.
IM: In the sixties, there was a TV show in the States – The Andy Griffith Show…
JT: Yes. It was a nice programme – fitting for the time period.
IM: Many people today look back at the town in that show – Maybury – as a lost ideal. There wasn't a lot going on there, but nothing seriously bad happened either. One of the main themes of that show was the essential goodness of the citizens of Maybury. Do you think that's part of the attraction?
JT: No question. But that part of it is a bit of an abstraction. There's a perennial philosophical question as to whether people are essentially good. My answer is that the question itself is too broad. Observation of mankind in general suggests to me that there are five major groups of people in every society. At the top, you have, maybe 10% of the people who will almost always do the right thing, even if it costs them. Next you have about 20% who will generally choose to do the right thing as long as it doesn't cost them too much personally. Then there is the largest group – 40%. They're like a wheat field. They blow with the wind and flow with the times. In a way, they are the most dangerous, because they can commit to something good, only to reverse their opinion without notice. They can't be counted on in a pinch. Next, you have another group of about 20% who will generally choose the selfish option, except when they are fairly certain that they will not get away with it. Finally, there are the last 10%. They will consistently act selfishly, even to their own detriment and, to my mind, this group cannot be re-programmed – not easily at least. All of these groups exist in every society.
So, if we return to your question about Maybury, they are pretty nice folks, but they are untested. Who is to say that Floyd the barber wouldn't vote for the candidate who promises an increase in social benefits? Who is to say that, if there were a food shortage in Maybury, that Barney Fife would not load up his only bullet and threaten to kill Aunt Bea for her loaf of bread? As Heinlein said, “After three missed meals, most men are willing to kill for food.”
These may seem like pointless observations, but it comes under the heading of “What if?” And this is an essential question in the time of dramatic change that we are soon to face. Wherever you live, if there were to be a stock market crash, hyper-inflation, food shortages and all the rest that may well be coming our way, how will your community handle it? The fact is, in any community, at best, you're looking at only 30% of the public being trustworthy. It only takes a small percentage to create a dangerous condition. The bottom 10% would react badly almost immediately and, if the situation continued, the next 20% would join in. The real danger is when the middle 40% swing over and decide that they no longer have much to lose. Then, if you are in the upper 30%, you realise that you're in the wrong geographic location. It's dangerous to be committed to doing the right thing when the majority have ceased their commitment.
IM: What then?
JT: Well, at that point it may be too late and, of course, this is why we discuss the subject of internationalization so much – to prepare. The best protection is to assess your community – consider the degree to which your community is at risk and, if you conclude that that degree is significant, consider creating a bolt-hole – a destination where the danger will not be as great. Then, if things start getting a bit nasty, you at least have an option to remove yourself to a prepared location.
IM: Turning to the aftermath of the Great Unraveling, do you see it as a long recovery?
JT: I see it as primarily a shift in which nations are the leaders. Whilst the First World is stumbling, trying to pick up the pieces, the remainder of the world will surge forward and increase their position. The degree to which this occurs will depend upon the degree to which the First World is trashed by the present situation. But, yes, I do think there will be a long recovery period. We can only guess right now, but I believe that we are on the cusp of the period of greatest change and would estimate that it will take roughly four years to play out. At that point, the Great Unraveling will hopefully have reached its completion and the second half of the Greater Depression – the recovery stage – will take place. I anticipate about ten years for this. But over this entire period, the rest of the world will not have been standing still. Other countries will have increased their positions.
IM: This raises an interesting question. To many people, China is in the catbird seat here, yet they have their own problems.
JT: Yes, that's exactly right. For a start, they have a real estate bubble to deal with. Also, they rely on the First World as a market for their products. A First World crash will hit them hard and, to be honest, I can't presently envision a detailed description of how this will play out, but my overall view is that they will take a hard hit, adjust, then be on their way to a very strong future. I tend to picture this situation as an old man and a child in a race. The old man may have the experience, but the child has the energy. Let's say they both trip and fall right at the beginning of the race. The old man is going to be down for a while. He can't get up quickly. The child may get a nasty scrape on his knees, but he is up in an instant, running, bloody knees and all. In the end, the sheer energy of China, the lack of a democratic bureaucracy, the lack of an overwhelming entitlement system, ensures their ability to rebound from their present problems and become one of the leaders of the 21st century.
IM: How do you see Europe in the period of, say, 2015 to 2020?
JT: I wish I had a firm answer to that. It will depend upon the degree of destruction wrought by the present condition. It will also depend upon the reaction by the populations of the various countries. I've been predicting the breakup of the EU for a long time and we're now getting close enough that this has become a common supposition. If the EU does survive in some form, it will not be a nice place to be – much more of a police state than at present. And the countries that are jettisoned along the way will not fare any better. I believe that most of Europe will decline dramatically in every way. The “recovery” can only begin after the major events have played out. It will only occur if the remaining separate states have once again turned to competition with each other – returned to the ebb and flow of prosperity as each country takes its turn at political and economic prominence, as Europe has traditionally done over time, prior to the attempt to force all the countries into one format.
There is one possible alternative to this supposition, though. There is some chance that the concept of the nation-state will become outmoded. I think this unlikely in the case of Europe, but it would be wonderful if it did occur.
IM: Why do you doubt the end of the nation-state concept?
JT: People love building fences. Not just physical fences, but conceptual fences as well. It seems to be human nature to want to create borders of every kind, in the belief that they provide some sort of security.
There was an interview on the BBC with a Yorkie years ago. He was asked how he felt about foreigners. He said he didn't trust them. He then added that, when it came right down to it, he didn't trust all Englishmen either – especially those from the south. The interviewer said, “So it's just those people from, say, Yorkshire, Birmingham, Sheffield, etc. that you trust.” He said, “Well, not those other places; really just Yorkshire. But not the city people. Mostly the people from the towns, and then, not all the towns.” By the end of this interview, he had worked his way down to only his town, only his section of town, only his street, only his house. And he wasn't sure about the other members of his family. (Laughs.)
That's an extreme example, but it does illustrate that people take comfort in creating borders – “my yard, my town, my country.” It's human nature. It takes a fair bit of imagination to think outside of that particular box. For that reason, I think we'll still see generations of politicians finding nationalism to be an easy sell to the voters. And, of course, central government control will always be the most popular concept for those who wish to be doing the ruling.
There is a basic principle that exists in the human mind: “We are the good guys; those guys over there are bad guys; let's build a wall.” This is not a healthy principle, but it is very ingrained in human nature.
IM: Do you have a picture in your mind of America after all the dust has settled?
JT: I strongly believe that it will hinge almost entirely on how much power can be retained by the Federal Government as the present situation unravels. That will be the key to America's future. The more power and control the Federal government can manage to hang on to, the less America will prosper in the years afterward. America still has natural resources, and it holds great promise, depending on the level of liberty. It has some states that are fairly independently-minded and have a good work ethic. If the central government loses its hold – if it collapses – it is possible that the various states may compete with one another, almost as separate countries do.
At present, money from all the states gets pooled in the Federal Government. This means that a state that is a net contributor, like, say, Texas, pays into the Federal system. Then, that money is shifted out to a state such as Illinois, which is a net consumer. This holds down the ability of Texas to really take off economically, while ensuring that Illinois languishes as a major entitlement state. Everybody loses.
If the central government were to lose its iron grip and states' rights were to come to the fore in America, Texas, and other net-contributing states would take off economically. States like Illinois would collapse under the weight of their entitlements. People would then leave the less productive states to find work in the more productive states.
IM: But wouldn't those people take with them their entitlement consciousness? Wouldn't they, in a sense, “infect” the productive state with demands for socialistic benefits?
JT: Yes, but I believe that they would find little sympathy. Someone, say, aged fifty, who'd been receiving entitlements all his life, would be unlikely to be able to adapt. However, someone twenty-five might have a better chance. After all, he'd be witness to the fact that people from Illinois were only given jobs if they displayed a good work ethic when they reached Texas.
It could easily take an entire generation for a full change to take place and certainly, literally millions of people would be unable to adapt and would fall by the wayside. But the states that were already the net producers would be the magnets for all the people in the failed entitlement states. The very best part of this process, from my point of view, is that there would be fifty competing states. The key would be free enterprise. The degree to which free enterprise existed in that era would dictate how quickly a return to work ethic occurred and entitlement thinking dissipated. A very healthy environment.
IM: You seem quite enthusiastic about that prospect. Are you looking forward to the possibility of a new era of expansion and general freedom?
JT: No, I expect to be in the bone yard by then, but I'm hoping that those who are younger than me will have a much more promising world to consider – one where liberty is the primary feature.
IM: Some would say that liberty is just another word for uncertainty.
JT: Yes, that's true, they would. And, really, it's uncertainty that drives all this negative thinking and behavior – the building of walls; the desire to create borders; the desire for entitlements. The truth, though, is that no promise of security will actually create security. The truth is that, if you have liberty, you can work to create relative security. To my mind, anyone, and I mean anyone who promises security through greater governmental control is someone to stay as far away from as possible. It takes courage to retain a consistent focus on and belief in liberty, but liberty truly is the answer to a better world.
If you're going to successfully internationalize – whether assets, income or personally – you'll need some good resources to do it. Join us at the International Man Network and gain access to our library of useful reports on a wide range of diversification topics from moving gold overseas or finding an international broker to getting set up on the ground in a number of different countries around the world. Click here for more information.