A cheery time for doom-mongers
By
Bill Bonner Jul 27, 2007
Print this article
Our old friend Dr Gary North was – and still is – a master of the Armaggedon genre. The turning of the millennium seemed to cry out for a catastrophe. Gary came up with a suitably disastrous scenario – Y2K. Remember that? It sounds like a joke now, but it was no joke then. Computers are set up to do things at certain times. Gary guessed that when the world’s computers got to the year 2000 they would freeze up. They hadn’t been programmed to go beyond 31 December, 1999. Even if most computers made the transition gingerly, there were so many computers, handling so much data, some were bound to go haywire. It wouldn’t take many errors, he figured, and the whole data system would collapse. People wouldn’t be able to use credit cards. The government wouldn’t be able to send out retirement cheques. The railroad yards and truckers would lose control over freight. Stores wouldn’t be able to restock their shelves. Municipal water systems would shut down. Deprived of food and water, city dwellers would go on a rampage and many would die.
But then the big day came and nothing happened. As far as we know, not a single computer-controlled system in the entire world failed because of a date-related malfunction. Poor Gary. He had moved his family to the backwoods of Arkansas in order to avoid the urban riots, starvation and lawlessness he saw coming. He staked his reputation on Y2K trouble; but the trouble never came. Those of us who knew him felt sorry for him. We were afraid he was depressed. So we called him up.
“Too bad about that Y2K,” we would say. “No collapse, no panic in the streets, no mass starvation. That’s too bad. But don’t worry. There will be plenty of other crises. Maybe this global warming thing will catch on. Maybe the whole planet will fry – so cheer up.”
But the trouble with this modern world of ours is that there isn’t enough trouble. There used to be more. That’s what made the good old days so good. When people had trouble, they really appreciated it. Now, they just toss it off. When we were young, we fully expected never to be old. Nuclear war or runaway population growth would see to that. The former threat was very real. “We will bury you,” said the leader of the Soviet Union, in the chamber of the United Nations one day. We thought he meant it. And during the Cuban Missile Crisis, the world was probably only an upset stomach away from annihilation. If either Kennedy or Kruschev had been in a really bad mood, we might never have lived long enough to enjoy this great economic boom.
As to financial matters, the average family was only a paycheck or two from total disaster. Losing a job could be catastrophic. No one had credit cards. There was no EZ mortgage finance available. Besides, adults back in the 1950s and 1960s were deeply suspicious of debt. It was the lesson they’d learned during the Great Depression. That generation knew trouble – real trouble. In the 1930s, one out of every four American workers lost his job, with no unemployment insurance – and no welfare system – to fall back on. And then came World War II. Britain was bombed for months. Italy and France were both battlefields. There were severe financial shocks too. Britain went broke. France had to form two new governments and replace its currency – twice. But imagine the time of it your parents and grandparents would have had had they lived in Russia, China, India, Germany, Argentina or Japan. War. Hyper-inflation. Starvation. Police repression. Mass arrests. Occupation. Bolshevism. You name it; they lived it.
But for the last quarter century, trouble has taken a holiday. Every warning has turned out to be a false alarm. There was a crash in 1987, but it didn’t seem to matter. Stock prices rebounded, and rebounded again after the slump in 2001-2002. There was a property slump in the early 1990s, but that too soon recovered – and look what has happened since! And compared to the Luftwaffe, terrorists’ bombs have turned out to be duds – with no significant attacks in North America and only a couple in Europe.
But when you don’t have enough trouble, you have to go looking for it. That is probably what drew Britain and America into Iraq. And it is the lack of financial trouble that’s tempting people to do strange, troubling things. Despite the crack-up of Bear Stearns funds, the FT reports that investors continue to put record amounts into hedge funds. And from Miami comes word that 20,000 new condos are under construction – even as the US property market sinks. Savings are at a record low, debt at a record high. Trouble must be right around the corner.
Published in
Economics
| More
articles
by
Bill Bonner
Related articles
-
By Bill Bonner, Jun 29, 2011
-
By Bill Bonner, Jun 28, 2011
-
By Bill Bonner, Jun 27, 2011
-
By Bill Bonner, Jun 24, 2011
FREE - MoneyWeek's daily investment email
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.