Saturday, July 9, 2011
This Time It's Dilated
It's nothing new to say that we are living in a "black hole" economy, in which productive capital is continuously vacuumed up by speculative financial structures, as we continue spiraling down a path of fiscal stimulus, bailouts and central bank monetization, with little chance of those capital "influxes" ever reaching enough velocity to escape into the real economy anytime soon. As long as we continue operating under the same structures of economic organization, nothing we do will overcome that gravitational force and we will fall towards the center until we are wholly digested. Perhaps shreds of our former system will eventually radiate back into space, detectable to future generations, but its structures will be radically different for quite awhile.
On the other hand, you rarely ever hear the analogy extended much further than that. The productive economy is essentially being dismantled and vacuumed into another dimension, but how quickly will it happen? That question brings us to two related concepts that are frequently found in Nature, and a bit too often in modern human society - predicaments and paradoxes. As we are rapidly descending into the black hole of ponzi capitalism, a critical paradox involving time reveals itself. The closer you are situated to the event horizon of a black hole, the more gravitational force is applied (less gravitational potential) and the more time is dilated .
The equivalence principle in Einstein's theory of general relativity allows even stationary bodies with relative distances from a gravitational mass to be treated as having accelerated frames of reference with respect to each other. So we are not talking about an absolute measure of time, but its measure relative to other observers situated at different distances from the black hole. If observer A is closer to it than observer B, then a clock in A's possession will tick slower than one in B's possession, and both A and B will agree that A's clock is moving slower than B's.
From an absolute perspective, the gravitational force tearing at A's tendons is an extremely violent one, but, from the relative perspective, the time over which that force is applied is smoothed out towards infinity (as A's relative frame of reference approaches the speed of light). The clock in A's possession will continue to slow in relative terms, until an entire year in the life of B is just a few short ticks of the second hand, and eventually it will appear to B that A is barely aging at all (and to A that B has barely existed for any time at all).
To see how this time paradox applies to the global economy's black hole of speculative capital, we only have to look around us. Observer A could be represented by the largest economies in the world, hosting the largest financial/equity markets (U.S., China, Japan, Western/Central Europe, Canada, Russia), while observer B is represented by every other economy that is linked into the global financial system (this ranges from the economies of Iceland, Tunisia, Egypt and Syria all the way to those of Ireland, Greece, Italy and Spain). .
The biggest economies are closest to the event horizon of financial capitalism, since they have the highest levels of unproductive debt sitting on their private and public balance sheets. Their citizenry is being systematically poisoned by excessive debt, collapsing revenues, unprecedented bailouts, subsidies, taxes, regulatory oppression, unemployment, speculative inflation, etc., but it is also a very slow death. Relative to an Observer B, such as the Egyptians, Irish or Greek, the populations of these countries do not feel that their lives have significantly changed in the last few years or even decades, despite the changes most certainly taking place.
The time dilation effect has smoothed over these changes to make them appear much less drastic. Almost all asset markets in the U.S., Europe and China are now wholly subsidized by their respective governments/central banks, but the taxpayers fail to recognize that the bill was drafted in their names and will come due well within their lifetimes. Millions of people have lost their jobs, retirement savings and employment benefits in the West, but millions of them are also collecting welfare benefits such as food stamps, Section 8 housing, medicaid, medicare and/or unemployment insurance (or the equivalents in Western Europe).
Meanwhile, the clocks in North Africa, the Middle East, South Asia and the EU periphery are ticking much faster, as a new financial or sociopolitical "crisis" in those regions seems to erupt every other day of the week. While the size of their individual economies are relatively small and are capable of being partially backstopped with imaginary capital generated by the alchemy of Observer A, the rate at which their respective populations experience economic deterioration still renders it a very painful process. That is especially true when the pace is relative, and the people are forced to watch local economic and political institutions "age" much faster than their counterparts in larger economies.
The amount of suffering experienced by the average Tunisian, Egyptian, Libyan or Greek in one day generally equals the amount the average American, Canadian, Brit or German will experience in a year or more. The fundamental reasons we suffer do not differ, since we are all a part of the same economic system and are being consumed by the same black hole of debt, but the temporal schism makes that shared reality difficult to see. This dilation of time for the central economies of our world may not be fair or just, but it's a fact of our existence, and it behooves us to now use it to our advantage and the advantage of those we can reach.
For some, that might mean undergoing extensive financial and physical preparations and working towards 100% self-sufficiency, by learning how to grow/preserve food, access/purify water, generate renewable energy, use weapons for self-defense, develop community ties, etc. For others, it may not mean much more than getting out of debt, gathering knowledge and speaking their minds whenever others will listen. Regardless of one's specific strategy, it should be remembered that a dilated time frame does not mean the economy is recovering or the status quo will persist.
Our frame of reference may be relatively slower and more drawn out, but we are still being digested by the financial black hole of global civilization. In fact, we are positioned closest to its event horizon, and there will come a time when we can no longer afford to linger in the relative safety of its boundaries, but rather must cross over to the other side. When that happens, our relatively slow clocks will synchronize with all of the others and quickly make up for the time that was lost before. This time may be dilated, but, in the end, it's really no different.
Posted by Ashvin at 9:29 AM