When building structures, mechanical engineers are constantly worried about the possibility of resonance disaster – where the materials, shape, and size of a structure cause it to be vulnerable to a resonance that can increase until the structure collapses. Examples of this can be found in the Tacoma Narrows Bridge in 1940, the Broughton Suspension Bridge in 1831 and the Angers Bridge in 1850. In each of these examples, separate events and structural flaws combined to cause these bridges to tear themselves apart.
In 2013 we may be adding yet another example of a structure tearing itself apart. But, this time it will be a global financial and political structure that destroys itself – along with the lives and livelihoods of millions (even billions) of people. Never before have so many economies been so closely linked to each other. Never before have so many pressures been focused on the flaws in our financial system. Never before have we seen our societies so dramatically destabilized. Never before have we been so entirely dependent on a fragile and technologically advanced infrastructure. Never before have we done so little to avert ourselves from a course leading us inexorably to war.
We have put off solving our problems for far, far too long, and now they are about to all come together at once.
Some call this a ‘Perfect Storm’.
I call it catastrophe.
Despite attempts by political and business leaders to suggest the eurozone has turned a corner, the prevailing view of pundits is things can only get worse and a “perfect storm” is brewing.
The five-day Davos forum which ended Sunday, was dominated by the sovereign debt crisis in the single currency zone and was held against a backdrop of frantic negotiations on a write-down deal between Greece and its creditors.
Some of the players most closely involved with the crisis since the 2008 financial meltdown insisted there was now light at end the tunnel with European Central Bank president Mario Draghi hailing “outstanding progress”.
“Outlook Less Bleak From Alpine Retreat” was the assessment on the news pages of the Financial Times, suggesting the cool mountain air and pristine snow had raised the spirits of leaders more used to Brussels summits.
But, in an end of forum debate, experts predicted the break-up of the eurozone, economic malaise in the United States and a rise of militancy — and then there are the consequences of a conflict over Iran’s nuclear programme.
Nouriel Roubini, professor of economics at New York University, said the world might just about muddle through in 2012 but not much longer.
“2013 could be a perfect storm where you have a full eurozone crisis, where the fiscal problems of the United States come to a head and … there is an investment bust and you have a hard landing in China as well,” he said.
New York Times columnist Thomas Friedman had a similarly bleak forecast.
“I feel we will be back here next year and the hole will be that much deeper,” he said.