“From the mountains to the plains; all the towns are wrapped in chains; and the little that the law will allow… Don’t let them take the whole damn deal; don’t give up on what you really feel, the small and local must survive somehow if its going to be your town now” Greg Brown, folk singer, Your Town Now

I wonder how many times the world really changes in a century. Remember the late 80’s and the end of the cold war and the birth of all of those former soviet states now turned republics. I think the world changed in March/April 2020. With the onset of the pandemic, I think one key trend will end and another might.

The trend of globalization is on life support. It turns out it was not really a good idea to move the production of all matter of products to countries on the other side of the globe. Hospitals are running short on supplies and medications which seems unthinkable prior to the onset of Covid-19. The critics of globalization in the 1980s like Ross Perot and Pat Buchanan may have been right after all.

The trend that went hand-in-hand with globalization was financialization. Basically, the production of a wide range of goods were off-shored to China and a myriad of speedily developing countries. In turn, those countries would sell all of those goods to the developed countries in exchange for debt securities. The developed countries used all of this debt to build a service based economy. This service based economy experienced a series of bubbles which then popped like the one in the great recession and whatever they are going to call this one.

In the meantime, large swaths of rural towns and cities were hollowed out and all that remains is a shell of what once was. In my state, any long drive will take you to a series of towns which once had a thriving downtown. The buildings remain but they are all vacant and what remains is just a shadow of what once was. Perhaps something like a flea market will inhabit one of the buildings.

At the same time that all of those rural towns and cities were being hollowed out, central banks like the Federal Reserve were busy devaluing the country’s currency. That was also a really bad idea. Elites were given near free money which they used to achieve vast fortunes. Meanwhile the non-elite classes saw their value of their money steadily decline at the same time that their wages no longer kept up. The result was massive inequalities not seen before in modern times.

Today, the Fed is greatly exceeding the, seemingly unthinkable at the time, monetary policy that it employed in the aftermath of the great recession. The first QE in 2008 was $600 billion. Today they are nearly exceeding that on a daily basis. Recently it announced its commitment to unlimited QE. Now it is even buying junk bonds. It is skirting and violating the Federal Reserve Act.

I think the lessons of the past 50 years, is that economies need to be more local, more community driven. Fiat currencies will need to be replaced with currencies that hold their value. Its likely that all of those now developed countries will no longer accept our debt in exchange for goods. Like Greg Brown sings, the small and local must survive somehow. This will definitely not be easy.