Breakdown

John Robb at Global Guerrillas has been saying for a long time that the world's systems and infrastructures are in decline, and for that reason power is being co opted by local groups.

Looking at the current financial situation, he makes some good points about the inability of governments to stop the breakdown, and its consequences:

The inevitable outcome of systemic shocks at this magnitude will be an inevitable delegitimization of the nation-state as our trust in the ability of leaders to take effective corrective action evaporates. Further, nation-states will expend the majority of their resources on hasty and relatively ineffective corrective actions, which will make them collectively more prone to damage in the future and which will preclude the investments required to mitigate future crises. The cycle of delegitimization and resource depletion will continue until the nation-state is unable to respond at all to future calamity (the scale of this financial crisis is such, we may as well forget about any chance of early action to delay or prevent global warming, peak oil, water scarcity, food shortfalls, pandemics, etc.). In short, we will see a proliferation of hollow states.

I suggest reading the entire post.

The coming of Caesarism will be a consequence of this breakdown of the nation state. As we've seen in the US, the public and institutions will allow more and more power to be accumulated by individuals, until it is too late to reassert the rule of law and other such frivolities.