When Will the USA "Dissolve" (Collapse)? Around 2018.

The European Union is in a state of evident and (possibly) irreversible demise. The first and most prominent reflection of this is the weakness of the Euro which we have recently forecasted to "dissolve" around Q3 of 2013. Once the common currency is gone, the union will probably transform into something else that is easier to manage, less complex, less heterogeneous. The structural resilience of the EU as a system has been very low (1 on a scale from 1 to 5) since November 2010 and this is certainly not a good omen. Recently we have turned our attention to the US. Employing data from the World Bank we have rated the country as a system, incorporating into the analysis over 800 parameters spanning: Economy Industry Agriculture Energy Society Ecosystem Transportation Telecommunications Military/Defence Education Health System etc. The result of this holistic rating process is a two-star resilience rating (i.e. low) corresponding, more or less, to the classical BBB rating. The resilience rating is not a measure of the country's ability to pay its debt. It is a reflection of the resilience (fragility) of the system as a whole in its ability to withstand shocks and extreme events, or the so-called Black Swans. In analogy to what has been done for the Euro, we have analyzed the evolution of the complexity of the US as a system in the period 1985-2010. The result is illustrated in the figure below: What is the conclusion? First of all, a healthy growing economy means increasing complexity (green curve). This also means that the so-called critical complexity (blue curve), which measures how much complexity a system can sustain without imploding, increases. Every time a system finds itself in a state of crisis or transition both curves become bumpy (see for example the bump corresponding to the dot com crisis around 2000). The magnitude of the bumps is a measure of the severity of the crisis. What is apparent from the above plot, however, is that the current crisis is so far the most severe in the past 25 years - it basically sets the clock back approximately 10-12 years, which is when we registered similar values of complexity.  However, what is more alarming is the slope of both the mentioned curves - it is negative and with a value not registered before. Basically, a negative slope points to a shrinking economy. Read more here. The second alarming point is this. When the complexity of a system reaches its corresponding critical threshold (the mentioned critical complexity) the system in question becomes very fragile and therefore vulnerable. Its structure becomes weak and unable to absorb any increase in uncertainty or inefficiency, not to mention shocks. In the case of the US, this is precisely what is happening. If we take a closer look at the last few years, extrapolating the evolution of the two curves, we see that the curves will meet around 2017-2018. Ths situation is illustrated in the figure below. What does this mean? It means that over the next 5-6 years the complexity of the US will reach unmanageable levels and the system will essentially be out of control. Evidently, this statement is made based on the assumption that no major (extreme) events will take place to change the tendency. However, it is also true that current crisis is exposing the inability of modern politics to react to events of similar depth and magnitude. Consequently, the assumption seems to be pretty realistic. Moreover, very large and complex economies are characterized by immense inertia. This means that changes of any nature require a very very long time. But the most alarming point is this. In our analysis we are not looking only at the economy of the US. The analysis is holistic. It embraces also the society, environment, education, the health system, etc. (see the complete list of parameters). This means we're looking at the US as country, not just as an economy. In our previous blogs we have pointed to the fact that even though the economy is (globally) in a state of crisis, this is not a crisis of the economy. It is a crisis of values, morals, of living beyond one's means, which, ultimately, finds itself reflected in the state of the economy. In fact, the economy and the society are one and should be analyzed as such. Everything is interconnected. The economy is only one important node of a huge and dynamic network of which we understand very little. The result is alarming due to this very fact. You can bailout a bank or a car maker, but can you "bail out an entire country"? And we're not talking of fixing the books or printing money, we're talking of fixing the entire system, which includes the economy, society, environment, education, the health system, values, morals, ethics, culture, etc., etc., etc. How do you "bail that out"? What instruments do you use? Do we have the necessary tools for such an undertaking? The Western world has suddenly found itself in a state of decadence, leading a wasteful lifestyle, more or less like the Roman Empire in its last one hundred years. The only difference is that it took them a century to collapse, while today things happen at internet speeds. It is true that the only thing we learn from history is that we don't learn from history. www.ontonix.com