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A Shrinking Trust Horizon — And Hard Times In The City

Nicole Foss, who under the pen name Stoneleigh co-edits the Automatic Earth website, just did a long-form interview with an Italian magazine where she lays out her peak energy, societal collapse thesis in the coherent, accessible way that fans of her writing have come to expect. One part was especially interesting:

When you have economic contraction you also have a substantial contraction of the trust horizon. This deprives political institutions at the national and international level of the trust that would give them political legitimacy. They become stranded assets from a trust perspective. People no longer internalize the rules that those institutions are attempting to impose. The response is typically surveillance, coercion, and repression. This picture basically suggests that it is pointless to look for solutions from the top down. It is not solutions that will come from the top down but more problems.

So politicians typically make a bad situation worse as expensively as possible. The systems that we have established have become sclerotic and unresponsive, hostage to vested interests with no ability to adapt quickly to give people abilities to cope with rapid change. I don’t look for solutions from them. The people who are part of that system are typically the people who have gained significant amounts from the status quo. These are the last people who are likely to change things, so I don’t look for political actions.

In many parts of the world, especially in parts of Europe, people always ask me if they should take political action, change their policies at a national level to solve these problems. And I tell them unfortunately not because there isn’t any mechanism for these large bureaucratic institutions to offer anything that would realistically help, and that they‘re far more likely to try to maintain their own existence by sucking even more resources out of the periphery in order to maintain the center.

This is a bit like when a body becomes hypothermic, not enough heat. It shuts off circulation to the fingers and toes in order to preserve the body temperature of the core. That’s what we can expect politicians and political systems to do. Unfortunately for us, we are the fingers and toes and we have to look after ourselves. Nothing is coming from the top.

My solutions, such as they are, are grassroots solutions. We have to build things from the bottom up. Our centralized life support systems will fail over time because they’re critically dependent on tax revenues that won’t be there and cheap energy that won’t be there. These centralized systems won’t be able to deliver the goods and services we’ve come to rely on.

What we need are alternatives that come from the bottom up. The reason these work is because they operate within the trust horizon. They don’t have to stay small. They can grow to whatever size the trust supports and that can be different in different places. The crucial thing is that they come from the bottom up, they’re small and responsive and not bureaucratic, they make the best use of very small amounts of resources because they don’t have enormous administrative overhead.

It’s amazing what can be done at a very small scale. It wouldn’t replace what the centralized services have given us, but we can cover the basics. The key point is that we have to do it right now because we don’t have much time before we start to see centralized systems failing to deliver what they have delivered in the past. The amount of money in the system can contract very quickly. That undercuts what these centralized systems are capable of delivering in the next few years. So we must start right now building grass roots initiatives, and community is crucial to that.

We need to begin at the individual level because if we are on a solid foundation ourselves we can then help others. If we are not then our attempt to help others is fundamentally weakened. So we have to get our own house in order but then we have to think much more broadly. We must build community. Relationships of trust are the foundation of society. So we need to work with our neighbors, we need to know our neighbors and we need connections with family and community so we’re less dependent on money.

In many parts of the world where people really don’t have any money anyway, their society functions on barter and gifts, working together, exchanging skills. This works as a model. It doesn’t get you a large fancy sophisticated industrial society because it doesn’t scale up that well. But it works very well at a small scale, and this is the kind of structure that we need to rebuild.

In some parts of the world there’s a lot more of that than in other parts. So it’s actually interesting to think that it’s not necessarily the places that are the wealthiest at the moment that will do best in the future.

The analogy I use is that if you’re going to fall out of a window how much it hurts when you hit the ground depends on how many floors up you were at the time. If you were on the hundredth floor and you do nothing to prepare before you fall it’s going to be fatal. If you’re much further down it’s less painful. If you fell out of a ground floor window you might not even notice. You just pick yourself up, dust yourself off and not very much has changed.

So the places that will do best are the places where there is already a lot of trust at the foundational level, where people are used to working together, where people are not that far removed from the land. Places where there’s an enormous disconnect between resources that are available in that area and what resources that are actually used, where societies are highly atomized and used to a very high standard of living, those places will see enormous shock to the system because those people don’t have any skills or connection to land or family to fall back on.

Some thoughts
Viewed through a “trust horizon” lens, a lot of global and national institutions are indeed becoming “stranded assets”. Who outside of the New York Times editorial department trusts the European Union or the Federal Reserve these days? How many people still think the companies selling processed food or advertising prescription drugs on TV have their customers’ welfare at heart? Virtually no one who can read.

If you need an excuse to get to know your neighbors or generally get involved in the local community, this is it.

Big modern cities are the 100-story windows in Foss’ analogy. Life there is going to get very hard very fast if her systemic failure predictions come true. Conversely, small towns with thriving farmers markets and lots of roof-top solar panels will find the next couple of decades relatively less stressful. As Foss says later in the interview, “If you psychologically prepare for a much lower material standard of living in advance, it doesn’t have to be anywhere nearly as painful.”

Here’s the full interview:

32 thoughts on "A Shrinking Trust Horizon — And Hard Times In The City"

  1. In the analogy with falling from the 100 floor compared with falling from ground level I would raise the question: what are the risks that the guy from the floor 100 (and the other below him) will fall OVER the one on the ground which did not get injured by its fall but from the others’?

  2. No guns? Please – then all you are doing is preparing a stockpile of goods for a predator. “If things get that bad I’d rather not be here anyway.” Really? I thank God that the founders of this nation weren’t such quitters. As for me – I will fight and claw to the last round of ammunition and then to the knife or rock or bare hand; because every critter in the forest does this. It is about the gift of life and the struggle for survival. Even the tiniest little mouse when cornered will totally commit to ferocity and fight for its life. Be more than that mouse. Your family, friends and ultimately your nation need you.

    1. I didn’t mean to imply that I wouldn’t “fight” for the concepts and principles that I think are true and right, I meant that I would rather ‘get outta Dodge’ than try to ward off “predators”. Knowing how to load and aim a gun is one thing, but trying to be Rambo is another. I would think most predators would rove in numbers and be well armed themselves, and ruthless, etc. Even if you personally are willing and able to fight guerilla style, what about your family and friends and the nation if you’re killed?

      Besides, what are you really fighting against? Thugs, or ideas? Don’t be that soldier in Iraq or Afghanistan.

  3. I’m not so sure the Nicole Foss is as much of an authority as she would have you believe. I don’t know much about her but have read enough of her articles at the The Automatic Earth and watched a few videos (including this one) that I understand her point of view. So far everything she says is speculative, despite the seeming logic, so we won’t know if she’s right until it’s too late, I suppose. I must say, however, that I heard her analysis of the Japanese nuclear power plant accident and she turned out to be wrong about that, for whatever that’s worth. She claimed she was somewhat of an expert on nuclear power plants, etc. so go figure.

    Nevertheless, if things breakdown it will be a mess, especially in the US and the densely populated areas. Nevertheless, I’ve decided to do only so much preparing and to take my chances. A few months of food and supplies, gold and silver (some overseas), jettisoned a lot of material possessions that I don’t care about any more, simplified my life, etc. But no guns. If things get that bad I’d rather not be here anyway.

    As far as trying to bring back America, etc. I’m worn out. Don’t care any more. People deserve what they get. Besides, the solutions to “outer” problems come from within.

  4. Fear sells. Always has, always will. And it makes its appearances generally at the cusp of the unknown. Nicole Foss is a decent person certainly, but she’s not unlike the hordes before her, nor soon to come, that have their own ‘unique’ perspective on why we’re headed for the shitter and an empty roll…

    Local farming? Sure. For ‘decades to come’. No. Why? Because government is not about to allow some to exist in relative peace & prosperity, while other major sections of general society suffer. What, you think ‘class warfare’ ends at the political door…?

    If Nicole Foss really wanted to focus her lens, it should be re-positioned solely on Government as the problem, because if her (or the hordes of others predicting eminent doom), think they’re going to escape the long arm of governments-looking-for-scapegoats by living on a farm in upstate or packing the bags for
    La Estancia De Cafayate, they’ll be looking at a season or two before either their property and/or person is seized by hero’s-in-uniform, under color of ‘law’.

    1. I read Foss on a regular basis, but I tend to agree with Agent P, at least in broader terms if not specifics. There are plenty of eyewitness accounts from previous historical episodes of social/political/economic collapse and one fact stands clear: Desperate people are de-moralized, literally, and will do anything to get what they want.

      Even in today’s world it should be obvious that the guys with the guns rule the day, whether they wear uniforms or not, and the nastiest among them always rise to positions of power.

      And so, every time I read about personal and/or grassroots preps for the fall from the 100th floor window, so-called “lifeboats”, the same obvious and un-answered question nags me:

      What good is having a lifeboat if you are surrounded by millions of desperate and demoralized people who suddenly have nothing? Nothing to eat. Nothing to lose.

  5. As a very early supporter of Obama, a generous contributor, then becoming his campaign’s precinct capitan, and a WV delegate…I must confess a great sorrow; the change we dreamt of in Obama was a misplaced faith and has become a profound disappointment. He is owned by banks, sucked up into the prevailing power structure of USAcorp as it continues to manifest and subvert the soul of America. We are fast becoming a facist state, where big corporations, big government, the law have been rolled into one huge tool wielded by the oligarchy to rob the lower classes. Elections make no difference, the politicals are subverted, bought and paid for and then hired on, It is a failure of ethics, a failure of values, a lack of ideals…it is the seduction of the best and brightest minds who sell their promise for obscene wealth rather than to use it to lead, to serve, and to improve society.

    The contrast between an intelligent leader like Stoneleigh and (no-doubt an equally bright guy) like John Corzone is painful. The difference is Crozone types pursue self gain to the detriment of the social community they step on and use to achieve wealth. The StoneLeighs of this world use their intellegence to lead and serve and help the social community…..both have big brains, one has a moral sense of duty the other is bankrupt .

  6. Trust? To paraphrase Fyodor Dostoyevski “If there is no God, ***everything*** is permissible.”

    Welcome to Obama’s post-modern dystopia, led by the Jon Corzines, the Eric Holders, the George Kaisers of Solyndra, ad nauseam.

    As much as certain parties twist, wiggle and dance, in the very final analysis, if there is no God, all one can say is that ethics, on which all trust (including biz trust) is based, is merely a ***preference*** imbued by one’s culture.

    1. Which God? I assume, like everyone else that makes statements like this, that you mean yours and yours only. Are you arguing for Christianity? Are you arguing for Sharia Law? The arguments are exactly the same argument.

      Morality does not equal organized religion.

  7. There is always an economy. There is always trade and business activity. Life will go on, it will evolve and work will always be available for those who can adapt and change.

    The “Shock” will be the disruption and decentralization (food and manufacturing) of our economy due to rising energy costs, but centralization will continue with technology information. The “shock” could be short lived as manufacturing returns to service local economies and the system readjusts itself to a new and reduced energy paradigm. New technologies, changing distribution networks and decreasing use of energies (used more wisely) will dampen the effect of our reduction in oil and gas. Local systems will thrive and provide many diverse and productive economic models to emulate in the future.

    The old will die and in its place will come an even better world, still challenging with problems and conflicts for sure, but with solutions and hope for man and for all living creatures. Mankind is evolving at a fantastic pace and with pain and destruction we will yet rise grander and greater heights.

    The coming change is not the end, but the beginning. Believe it!

  8. Nicole Foss is priceless. I love the term ‘trust horizon’; it’s a keeper.

    Isn’t it amazing that we have such amazing power today that from a wireless device, we can:

    – pay our bills
    – do our banking
    – track the weather
    – buy almost anything and have it delivered to our door
    – see the news from around the world
    – access more books than the entire Library of Congress
    – zoom into any city, field, mountain, or island on earth
    – see photos taken in those places as recently as yesterday

    …and yet can’t arrest a lying, embezzling Congress that has counterfeited our money for 150 years and that controls our lives in a thousand illegal ways?

    Our Constitution is earth’s most powerful law of popular sovereignty. But we’re not sovereigns — we’re just slaves with amazing toys.

    AmericaAgain! can change that. For just $49 a year, AmericaAgain! will educate, inspire, and organize you to enforce the law against your members of Congress. The first order of business will be ending the embezzlement and counterfeiting ring in Congress. I explain that here:

    http://thisbloodlesslibertythebook.blogspot.com/2011/09/exposing-fools-gold-standard.html

    We’ll draft and push through reform legislation to roll back out-of-control government. The (16) pieces of reform legislation are explained in the AmericaAgain! Declaration:

    http://thisbloodlesslibertythebook.blogspot.com/2011/10/americaagain-declaration.html

    The AmericaAgain! campus is designed to be the people’s defense installation for our U.S. Constitution, giving you full-time support right on your wireless device. Here’s a very preliminary artist’s rendering of the campus Main Building:

    http://thisbloodlesslibertythebook.blogspot.com/2012/01/americaagain-campus-main-building.html

    When the time comes, join AmericaAgain! and together, We The People of these incredible, sovereign States of America can be an inspiration to the world, by making informed self-governance as easy as checking the weather.

    1. Errr… do you really think the sociopaths now in control of the government (you can tell them by the fact that they vote for laws they haven’t even read, and like to bomb innocent people) will acquiesce to yet another attempt at ‘rule of law’ by the common masses? The laws against what they do daily already exist; they are ignored.

      All you have to do is publish a list of the sociopaths (a few hundred world wide would be a good start), detail their crimes against humanity, again an easy job, and then either put a price on their heads or something like it.

      I hate to advocate violence but there are many so-called ‘leaders’ that have forfeited their right to walk freely amongst us. The sheeples are way too nonviolent for their own good.

      The reason this plan can work when it arguably never has before is that:
      1. The sheep are now incredibly well armed.
      2. The sheep themselves, and their relatives, are in the armed forces that the sociopaths are using to maintain control.
      3. The use of the internet which is an incredible resource to both sides; but far more useful to the sheep; it is a form of electronic telepathy making it possible to transmit thoughts, pictures and strategic plans now anonymously and instantaneously worldwide. Thus the plans that the sociopaths have to shut down the internet. It’s not about some musician making money; it’s about controlling the flow of ideas and strategy.

      We could change the world overnight if we wanted to. Just get rid of the sociopaths and claw back their assets, in the same way now that police departments seize the assets of a suspect, whether they prove guilty of anything or not. After this, reset all debt to zero, which is what will happen anyway if any number of global disasters or economic collapse occurs.

  9. We are all familiar with so called “business cycles, in other words there are times when an economy thrives and other times when things contract and there are scarcities and unemployment which requires some intelligent questions on what the causes are.

    The very first question should be, do we have a lack of raw materials? In most cases the answer is NO, as long as we keep working there is no lack of raw materials. Are there people ready willing and able to work, people who NEED jobs to earn a livable wage? Again the answer is YES, leading to the conclusion that the problem is primarily one of distribution, and what is the primary ingredient facilitating distribution? I submit it is HONEST MONEY that provides a “store of value” so that people who work hard and save a portion of their earnings received in payment for whatever form of labour they chose will have future resources to tide them through tough times and/or retirement.

    At present our fractional reserve created DEBT MONEY system of fiat currencies being borrowed into existence as debt works against all of those ideals because people who have no conscience (sociopaths) do not want to contribute by their own labour, they simply look for ways to gain a living at the expense of other workers without making a positive contribution themselves. Unless or until human nature is CHANGED from one of greed to one of service and fairness we will continue to have class warfare, the super rich who compound their wealth as parasites and scavengers with little personal contribution to building wealth as a society and the poor who game the system by expecting handouts and live on welfare. These are BOTH mere symptoms of an unsound monetary system and until that is reformed do not expect stability and prosperity in the economy or society at large.

  10. I pretty much agree with Stoneleigh, except for her stubborn death grip on her deflationary mantra. e.g. “The amount of money in the system can contract very quickly. That undercuts what these centralized systems are capable of delivering in the next few years.”

    If the outcome is going to be severe deflation, then where’s the problem? Everyone’s social security checks will buy twice as much stuff.

    The problem is the continuing loss in buying power of fiat currencies, with no accompanying rise in wages. This is why I encourage everyone to learn how to garden. At least then you will have some food.

    1. Jason , the fundamental problems associated with long deflationary periods are a severe loss of tax revenue, due to a contracting credit supply and a decrease in the actual $ money supply, its a vicious cycle that destroys everything… it’s happening all around us, schools shutting down, government services cut, ect.

      This cycle continues to reduce earning of companies, results in less consumer spending, and increases debt levels, a serious deflationary cycle, (like the one they are trying to prevent) eventually ends up in a nasty depression (which we are really already in) but it’s not quite a noticeable because we are spending $1.5 trillion a year to meet government spending programs…

      1. Hi Mike, I would argue that the money supply is impossible to measure. Therefore, let’s measure something that is easy to measure, like the prices we pay for the stuff we use: e.g. health insurance, food, gasoline, etc. And the things I use are going up, except housing.

        So even with the lessened velocity, consumer prices are going up. That tells me there is a wild expansion of the money supply, not a contraction.

        Declining tax revenue is neither inflationary nor deflationary, per se. It depends on the policy response. And in the present case it means more money out of thin air, which is wildly inflationary.

        We’re 5 years into this credit bust, and consumer prices are still racing higher, even with reduced velocity of money. There can’t possibly be any money supply contraction going on.

      2. “…we are spending $1.5 trillion a year to meet government spending programs…”

        And over $700 billion of that is Defense budget. So, what needs to be down-sized asap? I’d think $25 billion would defend America nicely. Based upon on realistic threat levels.

        Deflationary periods would affect tax revenue, agreed, but since we paid for (and our employers matched, or paid for our employees as the case may be) our Social Security ourselves, I must agree with Jason it would not necessarily be a bad thing…and must agree the real problem is loss of purchasing power from a constantly inflated monetary base.

        Look at the stats: in 1930, almost half of the US lived/worked on farms/agriculture. They migrated to cities looking for work. There were @ 185 million Americans then. With unemployment running @ 25% at the peak, that was @ 46 million unemployed.

        Now, there are @ 330 million, with real unemployment (using 1930 statistical methodology) @ 22.5%…that is almost 72 million unemployed. But…now only @ 5% of Americans live/work on farms/agriculture. We are in seriously worse shape….with absolutely no leadership or direction from government, as Nicole states quite lucidly. They can’t: they aren’t capable.

        I’d have to agree with you…going back to our rural/agricultural roots will be a necessity…there will be little choice: manufacturing is gone to low cost labor countries, and unless and until tariffs are reimposed, that is the way it will remain.

  11. John, Interesting perspectives. We all *should* be asking how best to position ourselves, including where to live, to survive the looming financial collapse. But are “small towns with thriving farmers markets and lots of roof-top solar panels” really the best place? What happens when farmers can’t get diesel for their tractors, fertilizers for their fields and the herbicides and pesticides they need to keep the varmints at bay? What happens when the roof-top panels reach the end of their useful life? And what happens when the other 80% of the population creates roving bands of Mad Max-like predators to scour the countryside for food? Just asking.

    1. Cuba is an interesting example to look at, because when the USSR collapsed they lost half their oil overnight, and had to switch from conventional agriculture to organic, local farming. (There are several videos about this online.) They did experience widespread malnutrition for several months, but no “die-off,” and within a couple of years they had a much healthier population due to better food quality & increased walking & bike-riding. The US wouldn’t find it so easy, given that we don’t have a year-round growing season and millions live in places where food cannot be grown (e.g. Las Vegas, Phoenix). But we’ll likely (or hopefully) have more time to make the transition to old-fashioned farming.

    2. Food can (and is) grown everywhere. Education is the key and you must not be dependent on anyone but yourself. Start now by learning how to grow your own food, how to compost and how to can and/or dehydrate food. Look to publications like Mother Earth News for a quick primer in organic gardening and self-sufficient living. If you have the resources to relocate, start with “Strategic Relocation” by Joel Skousen to find a safe area in which to survive what comes next. Appathey can be deadly and NOW is the time to plan and prepare. This is NOT a DRILL!

    3. Hi Jim
      Yes, in the near and long-term small farms, small business and local will become the “new normal.” What was once lost to the giants will come back home due to the “need” for those goods and services closure to where they are needed.

      Life in the US is not going to fall apart completely. Humans are amazing at survival; however, life is going to change.

      What happens when the solar panels and the fuel oil runs out….we do without. Geeze you would have thought the human race didn’t know how to grow food until Monsanto was born. But without tractors and such the production will not be as it is today, it will have to be grown locally since transport will likely become too expensive. All of us will need to grow some food, and produce some goods or service.

      The 80% will adapt or not do well at all. Most folks in the US don’t know how to begin to grow food and it takes practice and experimentation. Most folks live in huge cities dependent on the grocery stores and city government. If you haven’t developed a diversitied skills mix that allows you to grow food, fix your car, and the multitude of other skills required then hopefully you have other skills and resources to offer.

      I always thought it interesting that in a Post Oil era the Mad Max guys drove around wasting precious fuel in vehicles that get 2 miles to the gallon. No, there will be no Mad Max but it will be crazy.

    4. RE the ‘roving bands of Mad-Max types’; I think the problem may be overstated for those of us already in the rural areas. While for a time anyone who can will steal gasoline will be able to travel a great distance, their lack of knowledge about how to purify water may be their downfall; I suspect a lot will succumb to dysentery and other water-borne illnesses rather quickly, in a matter of the first months if total societal breakdown occurs, such as with a CME or EMP attack. Without clean water or the knowledge to accumulate it, everyone is on their own rather quickly, even given stores of food supplies. The ‘MadMaxian’ types are not known for their ability to work in trusting groups or a wide knowledge of old-style survival techniques. These are people right now who are standing around on street corners hoping for a score or playing endless computer games and learning very little in the way of useful knowledge. As in the old days (and as Stoneleigh says), the trust factor and ability to form working tribes would be all-important.

      To the rest of your question, mankind did fine before without herbicides and pesticides, and solar power both passive and electronic is pretty easy to optimize and reinvent.

      For one solution to many of these economic problems, please investigate the Zeitgeist Movement, which is promoting a resource based economy (matching our needs and wants to what nature can sustainably provide) rather than a money based (slave wages and endless ‘interest payments’) economy. If we refuse to partake in the banker-as-king economy, we’ll take them down sooner rather than later, which is what needs to happen.

  12. Trust and integrity are two critical conditions for business. Here in the US and elsewhere (with the advent of global finance) the integrity of banking institutions, investment houses and our governments have been trashed by their own behavior.

    We have no influence over government or business, but by how we spend our money and with whom. The good people of CHAGRIN FALLS, Ohio have the right idea and perspective. When a local hardware store was faced with going out of business the community responded. It does take a community, a sense of home, a position of integrity and responsibility.

    http://www.huffingtonpost.com/2012/01/27/in-the-era-of-big-boxes-a_n_1236835.html

    If you haven’t noticed, the big box stores are shrinking their stock levels, the diversity of product and floor space. For those of you who have traveled to third world countries and noted the lack of product or lack of diversity of products, if you pay attention, we are heading toward the same situation. A hollow USA.

    When the county no longer has the funds to plow snow from roads, it will be the “community” that comes together to make it happen. When our food systems fail, it will be the small farmer who comes through with local healthy food. Local bakeries, grocery stores, service providers and such will fill the gap the big box stores currently occupy if we stop taking our business to them.

    As this world as we know it falls to pieces, it will open new opportunity for you and I. Those of us with skills, abilities and a drive to make the USA a healthy,safe and content place to live.

  13. Nicole Foss, “Stoneleigh” is one of my heros, a smart, dedicated, visionary who serves us in a humble manner, giving her message and living her message. I gave my newborn son the middle name “Leigh” after her name, it means “led by God” Thankyou Stoneleigh

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