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Preface to Second Edition

      THE BOOK YOU SEE BEFORE YOU WAS WRITTEN between 2005 and 2007 and first published in the spring of 2008. The study and observations that went into writing it spanned a longer period: from 1989 to 2006. In this book I had made a number of predictions, many of which have since started to come true. Now, in 2010, the idea of the US going the way of the USSR is no longer quite so controversial: “Don’t worry about using the term ‘collapse’ — that’s the term they are using at the White House” a senior Washington insider told me recently. In many ways, collapse is already here; it just hasn’t been widely distributed yet.

      While updating the text for the second edition, I have been careful not to add any new predictions, but I did take a few out because, as I now realize, energy and financial trends are too volatile to call over as short a term as the publication cycle of a book. Global oil production appears to have peaked for good, but is yet to start seriously declining, and this has produced a slow-motion crash rather than an outright collapse. Financially, the high volume of debts going bad has so far outpaced the government’s printing presses, keeping inflation out of the picture, while creative accounting at the Federal Reserve has so far prevented a run on the US dollar, though how long this can continue is anyone’s guess. We are in uncharted territory; all we know is that there is a cliff up ahead.

      This book compresses a significant period of time into a single, foreshortened historical episode: the collapse of the two late-20^thcentury superpowers. Some day it may be distilled into just one chapter of a history textbook — one that will talk about the long-gone USSR and the long-gone USA. Schoolchildren will like learning about the superpowers just as they like learning about dinosaurs: big, scary monsters — but extinct, and therefore not so frightening. The following chapter might talk about the end of the industrial age, with pictures of other impressive dinosaurs: offshore oil and gas platforms and refineries; supertankers, bulk carriers, container ships and aircraft carriers; giant office towers and big box stores surrounded by vast wastelands of parking lot and freeway; megaschools, megafactories and megahospitals and other industrial megafauna from the late Anthropocene. To future schoolchildren, these pictures will look as exotic as Mayan pyramids or Mesopotamian ziggurats. But I am getting ahead of myself.

      The schoolchildren of the future aside, this book might be able to help us, here and now, with our own perception of time as it relates to large-scale changes. We tend to believe that the present is well known, but that the future can only be guessed at by extrapolating charts and graphs and formulating alternative scenarios at various levels of probability. We tend to discount the probability of sweeping changes, choosing to believe instead that the future will resemble the present. In doing so, we may be correct up to 99 percent of the time; the rest of the time we get it so completely wrong as to look utterly ridiculous. What’s more, that 1 percent shows up every 100 times or so. The future doesn’t so much unfold as dawn on us one fine morning.

      Sometimes the arrival of this realization can be distilled down to a single moment. When I visited Russia in the summer of 1989, nobody was talking about the collapse of the USSR. Getting ready to go back again a year later, I had to delay my trip in order to get my infected appendix excised. Going under the knife at Brigham and Women’s Hospital, I was chatting with the surgeon while the anesthesiologist was getting ready to pump me full of sodium pentathol. The surgeon was interested in what was going to become of the Soviet socialist republics, Armenia in particular. Right before I winked out and he got busy slicing and dicing, I rather surprised myself by assuring him that Armenia would become independent within a year, and I recall him looking a bit incredulous. Armenian independence came on September 21, 1991.

      It is helpful to be able to recognize the imminent arrival of major changes before most other people, with one important caveat: enough other people have to be able to recognize them too — once you point them out. If not, then your destination may well turn out to be the loony bin. When I came back from a visit to Russia in 1996, I was quite certain that the USA was going to go the way of the USSR, although I wasn’t sure about the timing. But I realized that few people would agree with me, and so I kept my findings to myself until 2005, when I correctly surmised that a critical mass of people would be open to considering them. I started paying attention to Peak Oil theory at around the same time, but its timing remained uncertain, and the theory, sound though it seemed, remained consigned to the heretical fringe. Then Peak Oil showed up in the aggregate oil production statistics, in 2005 for conventional oil and in 2008 for all liquid fuels. More importantly, the effects of Peak Oil contributed to the massive spike in oil prices, which was one of the causative factors in the ensuing financial collapse. So now I feel confident that, once I point it out, many people will recognize one important but generally unrecognized flaw in Peak Oil theory, as it stands, which I point out for the first time in this edition, in the section on energy.

      When confronting a reasonably successful prognosticator such as myself, the obvious question to ask is, How did he know? Sadly, there isn’t any point of technique I can share with the world. It’s a matter of recognizing an element of the future when it shows up within our notional “present.” But such recognition is not a conscious, rational process. We never know how we knew. If pressed, we come up with justifications of how we knew, which upon examination turn out to be contrived. What makes recognition possible is the ability to see patterns based on the sum total of our life experiences, not some analytical ability or access to data. I am certain that watching one superpower collapse has primed me to recognize, ahead of most other people, those same telltale tendencies in the other. A certain amount of perspective also seems necessary: I was able to observe the Soviet collapse over a series of visits, and this gave my observations a time-lapse effect. I am sure that I would not have been able to make the same observations had I been living there at the time, stuck in the moment, with all my energies devoted to mere survival.

      Another prerequisite is a bit of detachment: I refuse to become emotional or sentimental about collapse. My life is my own, and, may superpowers fall where they may, I will try to live it as best I can. I hope that by keeping this book alive I can help others do the same.

      Boston, New England

       September 2010

Introduction

      I AM NOT AN EXPERT or a scholar or an activist. I am more of an eyewitness. I watched the Soviet Union collapse and this has given me the necessary insights to describe what the American collapse will look like. It has been a couple of years since I started writing on the subject of economic collapse as it occurred in the Soviet Union and as it is likely to occur here in the United States. Thus far, I remain reasonably content with my predictions: all the pieces of the collapse scenario I imagined are lining up, slowly but surely.

      But for me it all started late in the summer of 1996, when I arrived in the US after an extended stay in Russia. I was just married and my thoughts turned to the future. I had visited Russia many times before, on family visits as well as on business trips, and had been able to observe in detail the fall of Communism and the ensuing economic collapse. Unlike the people who had lived there throughout that period, and also unlike those who had visited just once or twice, I was able to notice both the gradual changes and the sudden ones. Because I was born and grew

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