For those who enjoyed his encyclopedic 2015: Year In Review, this week we spend an hour with David Collum to ask: After processing through all of that information, what do you think the future is most likely to bring?
Perhaps it comes as little surprise that he sees the global economy headed back down into recession, one that will be deeper and more damaging than the 2008 crisis:
In 2008/9, while the equity markets when down, the bond markets went up. And that buffered an awful lot of pensions and 401Ks and endowments and things like that. And so people felt pain, but they didn’t realize that there was an offsetting gain. They did not notice that part as much, but I think the next downturn is going to be concurrent bond market collapse and equity collapse and there will be no slack in that downturn.
I think stocks and bonds are both at ridiculously high levels now. The bond market can only go down from here, right? I mean, it can keep going up for a while, but there is just nothing left to be squeezed out of it. Interest rates are at seven hundred-year lows, supposedly - they’re certainly at stupid lows, right. You have a third of Europe at negative rates... And so I think at some point the bond market’s got to collapse. It will start in the high yield market, and that is happening right now. Then it’ll spread, maybe treasuries will get bid to the stratosphere, but at some point you’ve got to get a real return. And so bonds have to sell off to get back to that real return -- after all, all crises are credit crises, right,? And then equities are going to go once there’s not leverage out there for share buy backs and stuff like that.
That's why I think the next recession is going to be a barn-burner.
Click the play button below to listen to Chris' interview with David Collum (74m:53s)
Well, Chris I feel awkward about what I am going to say but need to anyway. So, just respond as honestly as you wish–no hard feelings.
Is your "BUY LIST" for sale? Would you feel comfortable sharing it with us? I do think it could be the beginning of a great PP.com dialogue where we each jump in with our thoughts and reasons. The group project might be very useful for all of us, especially financial neophytes like me. I fully realize that that concept of "buy list" has been thrown around for many moons here at PP.com but when it gets down to specifics, very little is said, and I can somewhat understand why. So I'm just throwing this out as a feeler–maybe the group would want to start such a cooperative project?? Too dangerous?? Too complex??
I read your piece Ken.
I see things differently. There was a time when we had land we could expand into.(apologies Blackeagle). This has led to a certain frontier mentality of individual rights being more important than living within the constraints of a finite planet.
This anachronism will fade, but it still lingers.
That there is going to be a one-world government is no more by design than the sun rising in the morning is by mortal design.
That there are people jockeying for positions of Influence in the new structure is a given. They are however, an effect not a cause. They are opportunists. Do they conspire? Is the Pope a Catholic?
Asimov stated that the size of an Empire is dependent on it's speed of communication. The speed of communication at present is the speed of light. Therefore the natural size of this empire is at least the size of the planet. It will extend out for a radius of three light days.(7777exp7 kms) If Einstein's equations hold, which I doubt.
This is exactly what it is like as a species prepares to migrate to the stars. It is a Fire in a Madhouse. The Mycelia, via Terrance Mckenna.
There was a time when we had vast areas of empty land we could expand into (apologies to black eagle).
And now Arthur is bemoaning that it’s no longer us. Now there are vast areas of empty land, voideof any human life, for ISIS / the Moslem Caliphate to expand into.
(Apologies, Arthur).
I too hate the thought, but the irony really hits me in the gut. I suspect you were saying it hit you in the gut, too.
I bemoan nothing other than the extinction of my people Michael.
The point that I was trying to get across was that we can no longer be the same ape that expanded out of Africa. The world is full. Therefore either we adjust to that world or we make the sort of world that is Syria our home. That is the world Mad Max.
BTW Lyndon la Rousche has pulled the trigger. He warns that Jan 1 is the day it all goes belly up.
nonetheless, their overall “aaah! aaah! British Bankers! " has been shown to be at least partially correct.
Which leads me to a question, do you believe the boy who cried wolf many times, and was right once?
And if you believe them this time, do you think they are correct on the timing?
Also, how long is " immediately after”, as in “immediately after Jan 1”?
H.R.4269 - Assault Weapons Ban of 2015 (Introduced Dec 16th, 2015)
It would be interesting to see the fallout from having this pass on December 31st around midnight. Maybe gets slipped into an Omnibus Bill or some such?
la Rousche?
He only came on my radar screen 12 hours ago. My impression? An old Marxist with a megaphone. One last hurrah before the transition.
I refuse to censor my offerings. You are all adult enough to make what you will of the information. You don't need me to predigest your food for you.
I, however, need my information predigested as my models are weak and need to be tested on a worthy site. I reject the notion that all men are equal and am prepared to pay good money for profound insight.
Good luck. My understanding is that you are going to need it… And a lot of preparation.
I have read David Collum's article and listened to this. One thing I get for sure is I am really on the far side of Mt. Stupid. I get it at some level, but what are these rain drops in our world? Did Noah have anxiety every time it rained up to the 'big' rain?
"The root of suffering is attachment" --Buddha
Three years ago if I had lost my job and could not find another one, I would have blamed myself and wallowed in self misery; the exact wrong thing to do going forward because of my misplaced social expectations or attachments. If I lost my job day there is a good chance that this particular 'misery' would not happen; I would have more then plenty of other things to do. I am not so emotionally or spiritually attached to the empty promises in society now I guess. Today that is my gold.
Thank you again all of you for your words that continue to shake me free of my attachments. I would especially like to thank Arthur Robey, you are a cage rattling exemplar.
Believe it. I found myself pretty much done and in need of a break 4 months ago. Walked away from a FT job on 9/11/15 (had a burr up my ass that day for some odd reason). I start back up here in January.
You would be shocked at how much you can get done in 4 months, including the "down time".
This. About 5 years ago I had significant parts of my life/work/stuff dynamited out from underneath me. About 3.5 years ago I took a look at the remnants of the edifice (which I had worked so long to create and so hard to save the bits and pieces of for the intervening 18 months), and decided to blow up about 80% of the scant remnants.
I took the essentials which remained under one arm and embraced the unknown.
No regrets, no fears. My outlook and attitude are my gold.
is a problem halved. Your post has virtually vanquished my concerns.
Back in 2010 I watched a documentary online called "Loose Change" and then quickly followed that by "7/7 Ripple effect". I had just experienced an OMG moment that would and has changed my life!
I am stuck down that rabbit hole and I ain't coming out. Its my bunker and it justifies my every waking moment!
Commentary on economic conditions is always insightful. But for me there was a lot of strange subtext and social commentary.
Touch my stuff and I will become amoral. Well this is somewhat understandable, the need to prevent injustice and tyrants from becoming powerful, we do need to act. But why not express the same level of commitment to action when broader criminal activity is inflicted on the social and economic body as a whole? Why just when our own personal stash it touched. Being amoral is OK, are we tossing Mahatma Gandhi and Martin Luther King to histories trash pile already?
The biggest problem on college campuses is young men falsely accused of assaulting women? How about some context here? When statistics say that 20 to 25% of women will be sexually assaulted during their college career, is not that the driving problem. In response to a problem of that magnitude, would it not be expected that some false accusations would become part of the problem? Oh, and men having sexual relations with slightly intoxicated women, well that's just what men do, we can't think of trying to affect that general social attitude?
American culture has become self centered to the point of almost becoming narcissistic (in our macro media and economic spheres - there is a quiet revolution taking place below the surface I believe). This is our essential problem upon which all of our three "E" problems turn. The narcissistic attitude is not an aberration, just like we can no longer say that mass shootings are an aberration. Both are founded on and the result of a reductionist and materialistic mythology that has enthroned "survival of the fittest" as the singular guiding principal of our "culture". Isn't it after all the main story of our very existence, the very principle that drives evolution. Isn't the idea that is generally propagated that when I am self centered, acting solely for my own benefit, is when I am most productive. And when I am most productive is when I benefit the whole? What a poisonous lie.
Can we evolve to ecological thinking fast enough to survive. When we understand that cooperation is just as power a survival strategy competition. That cooperation is not working to the lowest common denominator and that the duality between us and them, me/mine and you/yours is a delusion. When cooperation is seen as individuation, self expression at it's highest level. Competition is a lower level principal that when pushed out of place to it's current position of prominence is actually self destructive to evolution, personal expression and freedom.
We can put all the criminal banksters in jail that we want, create the new and perfect "ism" or economic system, but all we be for naught if we do evolve personally and collectively. We have turned the idea of personal responsibility on its head. Our current cultural paradigm has created a problem that no "asset class" can ever solve.
Cooperation is a KEY to developing social capital. So I've spent the last 3 years trying to unlearn and let go of my competitiveness and judgmental tendencies, trying to develop more compassion and an ability to work together. It's not easy when you've been raised in a society of social and economic Darwinists (reduced to "survival of the fittest" as a recipe for success), when you've been rewarded for individually rising to the top, when you've spent decades accidentally tromping on other people's feelings in order to "get the job done". Difficult as it might be, it is absolutely necessary to learn and practice cooperation. (Also gets easier as I get a bit older!)
Cultural capital includes the stories we tell about "what works" and "who we are" as a people. It's time to reject the "survival of the fittest" story and tell a new (old) story about how humans evolved to cooperate. How the group is stronger than one individual. How we need each other to survive. How cooperation can bring out the strengths of each individual. How do we wrest the microphone from the mainstream media to begin telling a new/old story of our culture? An evolving story that can grow and change with the changing times ahead.
How do we get the message out? The people we need to reach are not on this site. A few ideas:
Forward PP emails and other salient analyses
Write letters to the editor
Calmly and politely reject the current cultural message in everyday conversation. Don't be afraid to speak the truth, as you see it, about society & cooperation & the three E's.
Teach classes or lead workshops in understanding the 3 E's, in preparedness, in local food production, in any skill you have that your community could benefit from learning.
By the way, my community has an ongoing project called the "One Valley Prosperity Project". We've identified our community values, what we want to 'preserve and protect', and what our biggest challenges are... All well and good, but the project is mistakenly moving forward with the premise of BAU and continued growth. I believe I've been "disinvited" for wanting to talk about preparing for degrowth.