A picture of the economic outlook in 1983, through the eyes of Woody Allen, other experts, and the MOTHER EARTH NEWS editor.
"You know, the world is at a crossroads. One road leads to utter hopelessness and despair, and the other to oblivion. I just hope we have the wisdom to choose the right course."
That's how Woody Allen puts it. Sure, I know, he's just a comedian. So you want to hear how a political scientist views our situation? Then let's listen to Professor William Withrow of Gardner Webb College . . . a levelheaded educator who farms on the side. (These remarks are reprinted with permission from the January 1983 issue of Mountain Living magazine).
"Today, when they talk about the signs of an improving economy — people are buying houses again, well, are they paying cash for those houses? No, they're using credit. People are buying automobiles again — well, how are they paying for those new automobiles? So here goes this debt. We're just propping it up a little longer, is all we're doing. I think if anyone just sat down and thought about all of this, they'd come to the same conclusions.
See, we're still thinking as we were thinking 30-40 years ago, but the world has changed, and the institutions that we set up 100 years ago (banking, farming) . . . those did a pretty good job of taking care of the problems of those times, but we're moving into the 21st century, and the institutions that we created in the 19th century just can't cope. Fifty years ago we didn't have to worry about a population problem, a fuel and energy problem, import problems.
If we continue to devote our efforts toward restoring things like they used to be, say, five years ago . . . then the question becomes: Which party do you want in power when the crash comes?
Yes, I think it's going to happen. As regards when it'll happen, we can continue propping it up for a while . . . [but] all we're doing is simply prolonging the agony .... I 'would forecast that it would come by 1985, but I have my doubts as to whether we'd survive until that time. But then when the economy collapses, what do we do? There's one thing we're going to have plenty of: Minutemen, Titans, Poseidons, Tridents...but we can't eat weapons."
All right, all right, but what's he know? Well, how would you like to scan a few quotes from a recent issue of the widely respected newsletter, Myers Finance & Energy . . . from the article headlined "Greatest Crash in History Now Building: Mass Madness Grips the World"? (The following quotes are reprinted by permission from the April 29, 1983 issue of Myers Finance & Energy.)
What we are seeing today is a phenomenon unprecedented in its scope. It will be examined and re-examined and written about over and over again in the 21st century. The subject will be the collapse of the world monetary structure. It is on its way.
The Dow Jones may go through 1200, it may go through 1300. But the higher it goes, the greater the crash will be . . . and the greater the violence of its smashing repercussions.
At last the figures have come out and now we can see the world position of the ten largest U.S. banks. This comes as a result of forced disclosure by the SEC [Securities and Exchange Commission]. The ten biggest banks with assets of a little over $26,000 million have lent out to Third World countries over $43,000 million. Three of the biggest banks have lent out more than double their total net worth to these countries. These are, most likely, non-performing loans.
Veribanc has just completed a study of 14,000 U.S. banks which leads it to draw this conclusion:
"The figures indicate a problem of considerably larger scope and magnitude than has yet been made public.
"Actions such as defaults on the part of the debtor countries, payment moratoriums or formation of a debtors cartel would cause U.S. banking chaos which could well be beyond even the Federal Reserve Board's ability to control ....
"The figure of $98.6 billion foreign exposure, reported by the Federal Reserve Board, and publicized as the total amount outstanding to non oil producing countries is far short of the Veribanc mark. Records of 14,000 U.S. banks show that the total long-term and short-term debt owed by overseas borrowers to U.S. banks is not $98.6 billion; but $235.7 billion."
The banking situation seems to be accelerating at a rate which projects the possibility of a dreaded bomb before the end of this year. No man alive can foresee the shape of the consequent disarray on every hand. That's because nothing like this has ever happened on a worldwide scale. No one knows just what to expect and so naturally no one has any idea about how to deal with it. The disorders that will arise out of this are beyond my imagination.
I hardly expect it next week or next month. But I expect the events that foretell it will be increasing. Everyone should have on hand a certain amount of greenbacks. Gold and silver coins are OK too-particularly the latter if you still happen to have them. Other than that, U.S. Treasuries are about the only thing you should own, outside your home and above your normal re quirements. Above all, shun the stock market. And watch the banks."
That does sound a bit foreboding, doesn't it? Well, believe us, the situation looks even worse when you read the entire 12 page newsletter, study its charts and data, and realize that Vern Myers has the figures to back up his rhetoric!
And — for another sort of authority — there's Robert Monroe, founder of the Monroe Institute of Applied Sciences. Our article about Bob's institute focused on the center's mind expansion program, but neglected to share the fact that Monroe and his friends are starting an entire farm, building a hydropower electricity-generating system, and planning an alcohol-fuel operation.
Why are they doing this? Well, we can't say for sure, but it might have something to do with the fact that Bob foresees a "waterfall" in the near future. Here's how he put it:
"Name me one thing that will prevent an economic collapse of our systems, say, within the next ten years . . . and that's being very, very generous. I know it's that close. You know it. And all the think tanks know it. Everybody knows it. But if you're a banker, that's your only game in town. What else can you do?
Get the picture? A lot of people these days think a crisis of some sort is inevitable andclose at hand. Are they right? Is the monetary sky falling? How fast? Will there be a crash by 1985 or — "being very, very generous" — in ten years?
We won't know for sure till it hits us, will we? And that's the rub. After all, somebody's probably been predicting the imminent demise of every civilization ever since time began! So how can you tell if — or when — the doomsayers will be right?
The fact is, you can't. But (and here's the good news) you don't really have to. Look through the articles in this magazine. Practically every one of them suggests some fulfilling enterprise that can give you a useful product — be it as tiny as a handful of worm-made com post or as grand as a 2,460-square-foot passive solar home — and increase your self-reliance as well. You can take steps to prepare for that possible gloomy future, while at the same time enjoying — in the here and now — what many people feel is the most deeply satisfying life style of all. . . the one that's based upon striving to do better for yourself, your family, and for the planet.
You see, coping with the threat of a crash doesn't have to be a gloomy, nerve-racking undertaking. It can be a joyous one. (Don't ever forget that.) That's why, out of the dozens of articles in this magazine, only this column regularly uses the "stick" to motivate you to increase your independence. The rest try to reach out and hand you the "carrot" . . . the homegrown, flavorful, fresh-picked carrot. Here. Take a bite!