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For about a decade now, some fairly solid predictions have been floating around. They’ve included skyrocketing prices for oil and natural resources, hedge fund bubbles bursting and a general increase in chaos and turmoil. They’ve been everywhere on the fringes – anarchists, environmentalists, peak-oil nuts, conspiracy theorists, internet addicts and urban critics have been catching on for years, but many in the mainstream still deny it. As so many of these predictions began to come true, though, many have taken notice. Behind the scenes, there’s a growing awareness that things are not right, and that big trouble is coming if they do not change.

Jeremy Grantham is a co-owner and founder of one of the world’s largest asset management companies. Since the mortgage meltdown he’s become increasingly critical of why some saw it coming while those in charge did not. Recently, he’s taken this a little further and published a lengthy treatise on what’s going on. The message? We now have too many people, using too many resources, and the markets can no longer grow. Business Insider has compiled a slideshow of his argument, and the amount of high-quality data he’s providing is truly frightening. It’s not that Grantham’s argument is original – every word of it reads like a (slightly financial) Mathew Simmons or James Howard Kunstler rant from 2004. He bemoans exponential growth, refers to Malthus and talks about the role of petrochemicals in fueling all this. What is unique, though, is the quality of his data – all what you would expect from a cutting-edge investment firm. He illustrates how much prices have skyrocketed over the last decade for everything from fuel to food to metals. In one example – in order to see if these prices were the result of random market changes and speculation – for beef the chance is about 1 in 2. For Iron, it’s one in over two million.

Other examples of this kind of thing are beginning to abound. Those working in the financial sector have the data, and the truth is becoming increasingly clear. Here’s another recent article on Business Insider which basically comes clean about the nature of corporate “efficiency“, and another from Dailyreckoning about “peak profits” and the total unsustainability of current all-time-record-high corporate profits.

Capitalism is failing – even the capitalists are waking up to that fact. The question is, what comes next?

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Yestderday saw further falling stocks and oil price rises, in what has become a far too normal day of news. Leading the crisis was the failure of recent OPEC talks. Though price are skyrocketing (Brent Crude is now around $120/barrel), oil producing nations have been unable to increase output.

The world has been faced with a lot of economic bad news lately, and yesterday was no exception. The TSX is now down 7 days in a row. The Americans are reaching their legal “debt ceiling” and many are talking of a default. Obama is now planning for “one last stimulus” – a payroll tax cut which hopes to change sagging employment figures. There’s also big layoffs in the works at many of the largest financial institutions in the world – such as JP Morgan and Bank of America. Fears about the stability of the American, European and Chinese economies is causing many people to worry heavily about the globe as a whole.

Two key stories have come forward in the past few days that really illustrate how rotten things have become, and on what kind of scale. There’s the exploding scandal around Sino-Forest, a Chinese forestry firm listed on the Toronto Stock Exchange. It appears to have been using a convoluted web of subsidiaries and a lot of imaginary trees to bilk investors for millions. Another brewing story involves the enormous African land grab by hedge funds, unearthed by a new Oakland Institute study. In 2009 these hedge funds bought up 60 million hectares of land – an area the size of France – displacing millions to grow cash crops for export.

Faith in the global economy is fading fast. With all the talk of a failing recovery and “double-dip recession”, it’s starting to become clear that this is not just like the recessions of the past. This isn’t just another correction or recession. When markets failed in the past (something that’s happened at least once a decade for most of our lifetimes), they could always turn to expansion. They could open up new foreign markets, pump more fossil fuels or take on more debt. These aren’t long-term solutions, though, and we’re running out of band-aids. Many fear that another market crash is in the near future, but the real threat is a long, grinding decline in our fortunes. What do we do if endless, perpetual growth is no longer an easy option?

Japan’s nuclear crisis at the Fukushima nuclear plant has now been officially upgraded to a “level 5” incident by international standards, a “disaster with broader effects”, much like Three Mile Island. Passengers arriving at the Dallas Airport from Tokyo have reportedly set off radiation alarms. Workers at the site are now being described by news sources and others with terms like “sucide squads” and “death sentence”. There’s even been talk of bringing in retired workers. These workers, now reportedly rotating through 15 minute stays to limit exposure, are now all that stands between Japan and a total meltdown of multiple reactors. Unbelievable heroism, without a doubt, and we can only hope it will be enough.

People are becoming far less resistant to now drawing comparisons with Chernobyl. In many ways, it’s scarier. Fukushima is one of the world’s largest nuclear power plants, and has four simultaneous reactors in crisis at the moment. Chernobyl was far smaller, and only one. whether we’ll see a cloud of radioisotopes released that goes on to cut a swath across a continent, we sadly don’t know. In the end, Chernobyl was buried in sand and encased in concrete as an emergency solution. This is now being raised as an option.

The American Government has also continued its work in the last few days undermining the statements of the Japanese Government and IAEA, presenting a much grimmer picture. On the home front, though, they’re still refusing to revisit their vast array of nuclear subsidies in the light of this unfolding disaster. Still hoping to kick-start a “nuclear renaissance”, they expanded their plans in 2009, to include tens of billions in loan guarantees. For next year, there’s $36 billion budgeted for such loans – roughly ten times Wisconsin’s budget deficit. Other subsidies include a tax credit, $853 million to help develop nuclear waste strategies and a further continuation of the industry’s limit on liability for any disasters.

Where will things from here is anyone’s guess. The situation does not look good, and the potential for some very long-term consequences is clearly present. Japan is an incredibly densely populated country – Tokyo’s alone has over a hundred million. That’s three canadas. Even if things miraculously improve from this point onward, and the radiation leaks so far prove to be harmless to most, an incredible amount of damage will have been done in human terms. This is the last thing Japan needs right now, and neither it’s weary populace or shaky stock-market is responding well.

Nuclear disasters have so far typically happened apart from others. An incident like this amidst a quake and tsunami that has devastated a nation is something we’ve long known is possible, but not yet seen. This adds a whole new frightening dimension to the threat of a nuclear “incident” – not simply as an isolated threat but as a way in which a bad situation could get far worse. Not all of the world’s reactors lie on coasts or fault-lines, but many do. Others are in potential war-zones, or simply regions with legendarily corrupt governments and regulators, far worse than Japan’s. Many are ageing, and others no-doubt have design flaws similar to the “Mark 1′ at Fukushima. In the end, we won’t know for sure until it’s too late – but why risk it?

A new report from the Vanier institute in Ottawa has found that the average familiy debt in Canada has now passed $100 000. This represents, on average, 150% of what this “average” family makes in a year. And the trend is still getting worse.

This research paints a stark picture of financial life for the average working Canadian. With stagnating wages, rapidly rising costs and diminishing savings, it’s getting harder and harder for even “successful” people to make ends meet.

“No one has pensions anymore, mortgages are bigger than ever, there’s just more things tugging at our money,” he said. “Putting your kid through university is a six-figure price tag and no one is ready for it.”

-Kurt Rosentreter, “Family CFO”

“Experts” are quick to blame this all on a lack of “financial planning” knowledge among the public. And with the explosion of consumer debt among young people, it’s hard not to believe that plays a role. But “better financial planning” doesn’t make up for losing your job, pension, or having expenses like education and housing double in price. The cost of living is going up and that’s not something that can happen to millions of people without consequences.

These kinds of financial pressures are not sustainable. Socially, they put us on a path straight for the kind of revolt and unrest seen so recently in Africa, Europe and the Middle East, where pensions, unemployment, tuitions and other basic cost-of-living issues have destabilized entire regions. Economically, these are the same pressures which recently sent the global economy into a nosedive. Another such crash (suspected by many to be on its way), would hit far harder than the last – all the easy credit solutions have already been tried and now are yet more liabilities. Unless these debts are dealt with, like our booming national debts and those of others, we will all be doomed to suffer an increasingly unaffordable cost of money.

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