1. TRIPLE TSUNAMIMANAGING ADVERSITY AND BEYOND PART 1 THE DYNAMICSWILLIAM HOUSTONWWW.TSUNAMICCC.COM

2. MANAGING ADVERSITY PART 1 THE DYNAMICSAGENDA THE CLIMATIC CYCLES AND THEIRIMPACT ON GLOBAL POLITICS. THE IMPORTANCE OF OCEAN CYCLES. LONG-TERM ECONOMIC CYCLES. DEBT AND ITS DESTRUCTION. THE CYCLES OF CONFLICT. THE PROBLEMS WITH ENERGY. GROUP WORK. 3. THE 178.8-YEAR SOLAR CYCLE Thought to be generated by out-of-balance movementswithin the solar system affecting suns output andvolcanic action Four distinctive periods in the last millennium ofeconomic, social and political turmoil. Cycle #24 likely start of a minimum due in early decadesof 21st Century and related seismic activity already withus. 4. WOLF MINIMUM - Early 14th century European famine in 1317/8 caused malnutrition thatweakened immune systems prior to Black Death. Civil wars in Britain and devastation on the continent Barbara Tuchman, A Distant Mirror. Beneficial effect - emancipation of English serfs. 5. SPOROR MINIMUM Around 1500 Critical period, discoveries, civil wars, innovations,famines and raging inflation from Spanish gold. Formation of House of Tudor after Wars of the Roses,then to Elizabethan order. Reformation individualsemancipated from the church. Innovation: printing press that drove Italian Renaissanceand Reformation. Constantinople falls to Ottomans. Emergence of the Elizabethan Age. 6. MAUNDER MINIMUM - 17TH century Unusually cool for around 100 years, Thames regularlyfrozen. Period of civil wars, famines, assassinations andrebellions around northern hemisphere. Creation of English Constitution, union with Scotlandand development of Cape Cod and SA Cape colonies. 7. DALTON/SABINE MINIMUM - Late 18TH century Napoleonic Wars fought during this period, Russia unusually cool. 1812 Anglo v American War solved nothing. Set off Tambora, the biggest eruption for centuries. Waterloo set the stage for sixty-year peace in Europe. 8. THE PRESENT Minimum sunspots and high seismic activity matchingconditions similar to previous minima. If the present resembles the past we can expect at least 25-years of a cooler climate, high food prices, civildisturbances rising to revolutions. Monitor sunspots and seismicity. 9. PACIFIC DECADAL OSCILLATION PDO ~ 50 year cycle where the average Pacific surfacetemperature (plotted since 1900) rises and falls in apredictable pattern. Positive phases drive rain belts to the east and north inbeneficial El Nio phase. Present negative phase since 2000 of PDO is to drive rainbelts south and west during La Nia to cause majorproblems with crop yields. Will last until around 2025. 10. ATLANTIC MITIDECADAL OSCILLATION AMO - A 70 year cycle where the average Atlantic surfacetemperature (plotted since 1895) rises and falls in apredictable pattern. Main impact of positive AMO from 1995 is to drive rainbelts north in the Northern Hemisphere to leave northMediterranean, Middle East and SE of the US unusually dry contributory cause of riots in MENA. Return to negative AMO c 2030. 11. ARCTIC OSCILLATION When positive, winds flow around Arctic Circle. When negative, winds flow south. In 2010/1 warm Atlantic low pressure. Cold Arctic from Kamchatka, and other volcanoesGrimsvten (Iceland) and Cheveluch (Kamchatka) createhigh pressure systems. Icy winds flow south into great continents; will ensureanother early autumn and cold winter for around another15 years. 12. PRESENT OSCILLATIONS The present confluence of a negative PDO and positiveAMO represents a dangerous combination of difficultgrowing conditions in north and east Mediterranean, theGreat Plans and SE of the US, China and Central Asia.There will also be flooding in SE Asia. Coupled with a new minimum and positive AMO, coldwinter likely in Northern Hemisphere Browning Newsletter provides monthly reports on the threeOscillations and their impact. 13. PRIMARY IMPACT OF CLIMATIC CYCLES Historically, the main cycles could not have come at a moredifficult time associated with the economic downturn. Theirprimary impact is likely to be on water availability and foodyields with associated political unrest in MENA.Unfortunately this is likely to spread to highly populatedareas. We can expect: A rapid rise in food price which, associated with the economic downturn, leads to stagflation. Continuing civil unrest from food shortages. Civil disturbances up to revolutions. 14. ECONOMIC CYCLES KONDRATIEFF CYCLE 50 to 70-year cycle of boomand bust. Associated debt/GDP cycle. JUGLAR CYCLE 8-11 year cycle, also the businesscycle see Part 4. 15. KONDRATIEFF LONG-WAVE Biblical Jubilee Cycle of fifty years Leviticus 25. Kondratieffs work of 1928 used pig iron, textile, foodprices and interest rates going back to 1780 to derive apattern of around 45 to 60 years of boom and bust. He,almost alone, predicted the Great Depression. Pattern shown in diagram shows presentdownwave/winter started in around 2000 and bottomswhen debt cycle exhausted c 2020. 16. DEBT/GDP CYCLE IN US K2 cycle peaked in 1875 at 156.4%, then fell. K3 cycle in 1929 was 195%, peaked at 300% as GDPdeclined 50% from 1928 to 1932 when ratio 200%; lossof debt c $100bn 10% less than GDP in 1929. K3 ended in 1950 when ratio 130%DEBT DESTRUCTION BEFORE RECOVERY K4 now at c 400% but nearer 800% when off balance-sheet items added. Potential loss of debt ratio to 200% - >$30 tr haircut? 17. THE CREDIT CYCLE - MOST REMEDIES FAIL The slight decline in the debt/GDP ratio is due to mortgagedelinquencies and deleveraging. This has been more thancompensated by the rise in federal and state debt andunfunded liabilities. If the present resembles the past, there will need to be adebt liquidation in the US approaching twice the GDP ofaround $30 tr probably through hyperinflation - beforerecovery possible. This would end global fiat money. Watch for signs of weakening currencies through furtherQE and decline in GDP. 18. CYCLES OF CONFLICT There have been many insurrections over water whenstarving crowds have rampaged. This could happenagain: o Peak of 178.8-year climatic cycle has generated civil wars and revolutions; Cycle #24/5 likely to herald another minimum. o La Nias have caused water wars. o Winters of Kondratieff have been related to civil wars and internal strife. Conclusion Likely riots, civil disobedience up to civilwars and revolutions: wars over water. 19. SECULAR ENERGY BALANCE There is rising evidence that the main fields have reachedpeak oil and now are declining and those coming onstream are progressively being unable to meet rising globaldemand except at high costs. Other factors: Climatic shifts are impacting on demand. Drought areas unable to continue high hydro power. Coal for power generation and conversion to oil to fill the gaps, as will LNG. Shale oil and gas expensive to drill but abundant in U.S. Major shift in government spending away from transfer payments to research into cold fusion. 20. GROUP DISCUSSION OVER DYNAMICS It would be very useful to hear how different nations orareas within states have dealt with adversity. The agendamight include: Discussion of other inputs we should be aware of. Prognosis for the US, Europe, the Middle and Far East. What could be done to mitigate impact of dynamics. Possibility of new political and economic alignments.