When looking for a visual example of the phoenix myth, it's hard to beat this scene from Harry Potter. When the time comes, the phoenix goes up in flames, and then is reborn from the ashes. Metaphorically speaking, that's what I see happening in the decade of the tumultuous 2020's, here in the United States, and elsewhere.
I believe we are several months into a period of time that I've dubbed "The Phoenix Great Depression." In my thinking, it started with the seizing up of the "shadow banking system," and the Repo Market last September, 2019. This was the first shudder in this current economic collapse. While most people could ignore the Repo Market mess, the Federal Reserve had to rush in and pump tens of billions of dollars a day, ultimately every day, to keep our banking system functioning. They're still doing that now, in addition to "printing" money at a breakneck pace.
Then in February 2020, the Covid-19 strain of the human corona virus hit U.S. shores, bringing the pandemic here. This was the "black swan" event that triggered a stock market collapse that was already waiting to happen. Then came the mandatory business shutdown, for a couple of months, which we're emerging from as I write this, on June 23rd, 2020. With the opening up of businesses again, another surge of virus infections is occurring in many states, and we're still in the first major wave of infections in this pandemic. There are one or two more waves to come, most likely.
In addition to that, we had a video taped killing of George Floyd, in Minneapolis, by police officers. That sparked another aspect of The Phoenix Great Depression, massive social unrest, widespread protests, and calls for change, to policing, in this instance. We have had statues being pulled down by protestors in parts of the country, something I always associated with Third World revolutions. Shit's gettin' crazy. I believe these chaotic economic and social events are our future for the next 3 to 5 years. Five years of economic contraction is a "great depression." Three years of economic contraction, or a 10% drop in GDP (Gross Domestic Product), is a "depression." No matter how manipulated the numbers for Q2 2020 are, it appears the GDP will drop far more than 10%. So this looks like an official depression already.
I've been writing about some of the major issues happening in society, particularly in the economy, for three years, in my old blog, Steve Emig:The White Bear.* I saw a serious economic downturn coming a couple years ago. I believe it would ultimately be an economic collapse that will feel like a Great Depression, even if it didn't fit the textbook definition. For most people, the years 2020 to 2027, or so, will be a major economic struggle to survive. The reasons for this are that several ultra-long term cycles are merging into a period of incredible change. A period like none other in the memory of people living today.
One major cycle or trend is "The Third Wave" concept described by futurist Alvin Toffler in his 1980 book by that title, and subsequent books. Basically, we're living through the time when the Industrial Age is collapsing, and the Information-based Age is emerging. All of our myriad of new technologies is changing the way human beings live. This change is as big as the change from hunter-gatherer societies 10,000 years ago, into agricultural based societies. It's as big as the change from the Agrarian Age into the Industrial Age, starting 300-350 years ago. But this time it's happening much faster, in a single human lifetime.
In short, every industry, every system, every institution in our society will break down, and be rebuilt to work in the Information Age world. This is the 'phoenix" aspect of this great depression.
Another ultra-long term cycle that is merging in time with The Third Wave, is The Law of Social Cycle, a little known social theory by P.R. Sarkar from India. In this concept, there are four main mentalities in any society, and one mentality dominates, and shapes all of society, at any given time. The U.S. is at the tail end of the Acquisitor Age, the era where the businessmen rule society. It's a time when corruption has become so prevalent, and so ingrained, that the Laborers, the mass of people, find it nearly impossible to make a decent living anymore. The begin to rise up in a massive populist movement, and topple the corrupt powers at be. This is called the "Acquisitor cum Laborer" era in this theory, and it's a time of great upheaval and unrest, until either the society collapses (bad option), or the Laborers win (good option). The Laborers, by nature, are not leaders, so a third mentality, the Warriors, rise up into positions of power, ultimately. The Warriors are people who prize physical courage, daring, and individuality. In societies past, this was primarily the soldiers. But the warrior mentality in modern society includes, soldiers, police, firefighters, martial artists/MMA fighters, professional athletes, action sports athletes, fitness buffs, activist leaders, and others who display true courage on a regular basis. The fourth mentality is the Intellectuals.
Both of these social concepts predict times of incredible, rapid change, and much turbulence and chaos. Lucky us, they've now combined. In addition to those two ultra-long term cycles/trends, we have the end of a traditional business cycle, which generally means a "normal" recession.
We also have the clustering effect of the "Creative Class," explained by economic development expert Richard Florida in his 2002 book, The Rise of the Creative Class, and subsequent books. The majority of the United States economic output is now largely clustered in several large metro areas, primarily the San Francisco Bay Area, Seattle, the New York City metro, Boston, Los Angeles/SoCal metro, the Washington D.C. metro, and Austin Texas. You can add Houston, as well, a major energy hub. The vast majority of our economy is based in these places, a few second tier tech hubs. Most of the rest of the country is still clinging to life after the Great Recession of 2007-2009. In addition to all of that, we have more debt than ever before in human history; government debt, business debt, and personal debt. All of these major factors have combined, merged, into one period of incredible change.
Like a late night infomercial, "But that's not all folks..." Into this perfect storm of change came a 100 year pandemic, the Covid-19 virus. I DID NOT see that coming. The effect the pandemic had on these other trends is to dramatically increase the speed that things have gone, and will continue to go, downhill.
We're only 5 1/2 months into this new decade, 9 months into The Phoenix Great Recession, and we have major corporations going bankrupt weekly, about 43 million people recently laid off (temporarily in many cases, but still unemployed at the moment), tens of millions of Americans suddenly struggling to make their rent and mortgage payments, and over 100 million debt payments, of all kinds, being skipped now. So we have the highest level of debt in human history, and suddenly much of those payments simply aren't being made.
This mess is going to take a long time, several years, to work through. I think 2020-2023 will be the worst years economically. But it will be a tough slog, for most Americans (and much of the world) for at least 5 to 7 years. Many parts of America, particularly rural areas and small towns and cities, will never recover. That's the bad news.
The good news is that major economic downturns are the greatest opportunities in any economy. There will be incredible deals on all kinds of things, from everyday items, to cars and trucks, to businesses, to real estate, all over the place... for the people who can take advantage of those deals. There will also be tremendous social change, and great opportunities to right long term, structural problems throughout society. The Black Lives Matter movement is just the beginning on that front, there will be many more social causes gaining steam in the next few years.
In short, like the phoenix of myth, or Fawkes, Dumbledore's phoenix in the clip above, our society will be broken down (not necessarily in literal flames, but metaphorically), and we have the chance to rebuild human society into something more equal, more fair, more environmentally sound, and that works with all of our modern technology that we have now, or that is being developed.
It's going to be a rough ride for just about everybody. But if we use this incredible, if chaotic, series of opportunities well, most of us should be in a much better place in 10 years.
Hang on.
Steve Emig, June 23, 2020
Here's the January 26th, 2020 blog post where I predicted the 10,000 point, $10 trillion dollar (+/-) stock meltdown.
*"The White Bear" is my nickname in the BMX world, it has nothing to do with race. It came from a poem I wrote, after getting dumped by my girlfriend, in 1988. My roommate a few years later used the term to make fun of me, and it became my nickname. I hate racism, and prejudice of all kinds. We all do it, but like most intelligent people, I try to keep it to a minimum.
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