Knock, knock - who's there?

No one would ever accuse me of being a "Polyanna" about the state of the world. I see dozens of signs of movement on the horizon that will likely change the way the West now works. Seems to me that we've been living the good life for more than half a century now, and our time for a massive reset is overdue. The recent global recession is only a preamble.

You may think I'm being overly pessimistic about this, but hear me out:

Unsustainable amounts of debt
The Western World has insurmountable debt problems that most politicians clearly don't want to talk about in any serious way - to do so would be career suicide. Take a look at the Economists Global Debt Clock. If you believe that because you live in Canada and we're rich with resources we have nothing to worry about - compare our debt with the USA's? How about Greece (which is already in the process of Government austerity programs and a bail our from the European Union)? The truth is, we're worse off than the US, and almost as bad as Greece, Ireland and Iceland. The latter three are on life support, and it's only a matter of time before the US is in critical care - if it's not already. Pay special attention to the debt to GDP ratio, and the debt per person. (As for Canada's rich natural resources - I suspect that they're the next commodity to get caught up in a bubble.)

Rampant, widespread unemployment
The official unemployment numbers issued by governments are misleading. They fail to count the people who have dropped off the unemployment benefit rolls, and they count people who have lost full-time employment and have found part-time jobs. I've heard the official US unemployment rate is 9.0% for January 2011. The unofficial number is much higher at somewhere between 16 and 22%. If we believe the higher number, that's almost a quarter of the workforce.  In Canada, the official rate is better at 7.8% (January 2011). The unofficial rate is hard to find (I guess nobody takes a this seriously), but I have to imagine it's higher - maybe not at USA levels, but higher. When I look at the 20-somethings in my life, I don't know of a single one who's employed at the same level I was when I was their age. This is not their fault - my son took a job teaching English in Korea because there were no jobs here in Vancouver. My daughter is back in school getting a teaching degree, along with the BA she already has. She might be able to find work (part-time, Teacher-On-Call) only because she has a few years experience teaching ESL, and she's certified to do so. This is a far cry from (for my parents' generation) graduating from high school and getting a good, well paying job for life. It's even far from my life - graduating with a two-year diploma from BCIT, and getting two consecutive well-paying, education-relevant jobs out of school - one with Northern Telecom and the next twenty-five years with HP/Agilent. Now I'm burdened with the thought that there is no more job for me - I'll have to create one. I'm OK with that - we've made and saved enough over the years. But what about the next generation? Will they ever live the lives their parents had?

Civil Unrest
Have a look at Egypt. Chronic un and under-employment. The upper and middle classes making out like bandits while the lower class continues to be squeezed. Now how about the austerity measures in France? Raising retirement age to 62 causing riots in the streets. How about Britain? Although the tuition tripling for university students still makes education affordable, again people in the streets. How long will it be before the unemployed, debt-ridden, citizens of the US revolt as well (the Tea Party is a very small example)? Doubtful it would happen in Canada in today's situation (we're too polite) - but what about tomorrows?


Global Climate Change
Whether you're a climate change denier (how could you really be - it's about as proven as gravity) or not, it's hard not to notice the changes in the earth's ecosystem. I saw a map over the weekend that showed about 90% of the USA covered in storms. Granted, it's winter, but that was a powerful reminder of the power of nature. These storms and changes result in unintended consequences - cities shut down because of snow, airports closed for days at a time because of weather. Because the economy (a man-made event) is now front and center for our politicians, global climate change is now again on the back-burner, and we're almost past the point of no return.

Chinese and The Long View
I think China is playing a very long, methodical game of chess, while we in the West think we're having a quick game of checkers. Think - the advantages of a managed economy plus no elections to worry about make it easy to justify investing now for payoff a decade or more from now. That's what China is doing now - buying up resources and companies knowing that they'll still be around long after our current round of politicians have left. I don't know that this is a threat to our western way of life, but it sure is a game changer.

Optimism or Pessimism
I really want to be optimistic about our future, but I'm having a hard time seeing the "glimmers of hope" that the pundits talk about. We humans have a knack for avoiding bad stuff, pretending it's not there, until it lands on our doorstep and we have to take care of it. Trouble is that we've let the bad stuff accumulate for such a long time, and have taken only band-aids to the most pressing of them, that it's too late. Mother nature, whether it be the weather or the randomness of the stock market, doesn't care what we think.