treebeard ,you are preaching …to the choir here…there are many many people that need to get the message…i’m not a preacher…i’ve done what i think i can do and i continue to do it. i live it…philisophical speakings…don’t change things for me
changing does. i do the changing because i saw it and i wanted to change. i’m odd man out unfortunately.
not to sound hard, i’m not at all…and i agree with what you say…it’s just i have seen when i speak as you have , that it doesn’t do anything, so i focused on doing what i could for my own life…other’s perhaps you, have a different calling.
i just understand that one heart felt rant doesn’t guarentee much…sad…yes…but true.
i do want you to know that i have done much preparation of my heart and soul for these times…i do not take lightly suffering coming…i personally have known great suffering…and from that i prepared to have as little in the future as i can possibly have…but i also realistically know i am not able to change others and i am not responsible for what they choose to do or not do.
many times in the face of great suffering i have thrown up my hands to heaven and said good g-d, can this be happening…only to hear the still small voice that says…yes it is happening.
i’mnot waiting to see mangled bodies…i’ve been one…and even if i wasn’t, i’m not waiting in expectation for anything…
i am alive and living each day as it comes . i am not in the wreckage of the future, however i am doing what i can to prepare for what makes certain sense to me.
peace, pax shalom
We all have it right now, we have everything we need to change the world now. Everything you say and do does make a difference. We are not helpless. I know that sounds trite and overused, but I do believe that it is true. The biggest lie that we have all been told is that were are helpless, powerless incapable of change.
When you say that despite your own personal difficulties, that you are continuing to do what you can to change the world in positive way, that gives me a little more strength and courage to do what I need to do in my life. That you have taken the time to share your perspective, means something and has value. We don't need to convert anybody, supporting each other is enough. Thank you.
Ultimately I agree that it is about how we do live our lives, what we do means much more than what we say. In this form we are limited to a degree in our expression due to the nature of electronic communication. The post was a bit of a rant, but there is a part of all this financial analysis that strikes me as a bit off. I understand the frustration of those who have played by the rules and feel cheated by what is going on and want to protect what they feel they have rightfully earned, but there is something a bit mercenary about it all.
Isn't everything we have in life a gift? Does the world really owe us anything? Why are we here and what is our role in the transformation that is going on? Are those savvy enough to see what is going on that are focused on the preservation of there own personal wealth wasting their talents when they have such great gifts to give to the world. Do we have any right to comment, I don't know. I do believe that we should all put out there what is in our hearts with honesty and openness and see what comes back. If we are off, we will learn something. If not, then maybe some good will come of it.
We are also the world reserve currency, otherwise there is a very good chance the dollar would already be toast. But don't forget, our economy is not as large as reported. When the US government under reports inflation, they automatically over report GDP growth. They also fudge GDP with a variety of seriously questionable adjustments, just like reported inflation and unemployment. We may be the largest economy, but I doubt the gap is a considerable as you think.
Don't forget that, when, not if, hyper inflation hits, things can go very quickly. We don't have to shave coins, like Rome did when they reached this point. We can and do print $2,000,000 per minute without wasting an ounce of ink or sheet of paper.
Chris always says he'd rather be a year to early than an hour too late. That perspective makes a lot of sense to me even if it's several year rather than a year.
The democrats are definitely part of the problem. The republicans are part of the problem.Personally, I don't think we should send anyone back to Washington for a second term until they start addressing the real issues.
We need new blood in Washington, blood with ideology.
I really liked the end of Michael Crichton's "State of Fear." He proposes that organizations like the Sierra Club or Greenpeace start out as effective motivators for social change, but after 10 or 20 years, they become part of the establishment and thus, part of the problem. The idea makes a lot of sense and applies even more to congress and the entire government.
During my undergraduate years in accounting, I was taught about the economies of scale that apply as small entities grow. I was also taught that when entities get very large, diseconomies of scale become the rule.
In my opinion, the major world governments and large corporations are seriously into the diseconomies of scale size range. The more they try to take on, the less effective they become at anything.
Time to get rid of republicans, democrats, lobbyists and Fed… the list is long.
here's a part of the well-known "Serenity Prayer" that is helpful to me to say once a day:
"Serenity Prayer" written by Reinhold Niebuhr (1892-1971)Just read an article about preparing for death. Isn't that the only real preparing we should do?...a spiritual/mind/body preparing, instead of trying to prepare for surviving an event that may or may not come? Death absolutely will come to all of us. Not trying to be morbid, just pointing out the only certainty we know will happen in the future. There in lies transformation for me.Grant me the serenity
to accept the things
I cannot change,
Courage to change the
things I can, and the
wisdom to know the difference.
Living one day at a time;
Enjoying one moment at a time;
Accepting hardship as the
pathway to peace.
Peace!
The US gdp in 2012 was $15.684 trillion, nearly twice China's. http://www.tradingeconomics.com/united-states/gdp
The collective EU gdp was $16.566 trillion.
http://en.wikipedia.org/wiki/Economy_of_the_European_Union
China had a 2012 gdp of $8.23 trillion.
http://www.tradingeconomics.com/china/gdp
Now, the gaps between Chinese and the western gdps are shrinking rather rapidly and China is no doubt trying to close the gap and end the USD's primacy as the world's reserve currency. But still, the portion of USDs in the world's foreign exchange reserves is over 60% and, in second place, the Euro's share is in the mid 20%s. The Japanese Yen makes up maybe 5%. The Chinese Yuan isn't yet a significant reserve currency for a variety of reasons, mostly political. The SDR strikes me as a wild card, but I don't think it has much international support yet.
http://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-dollar-as-world-reserve-currency/
All of this gives the USD's reserve currency status considerable inertia. What currency has a realistic shot at replacing it within the next decade or so? Five years ago when I started paying attention to this stuff I was expecting hyperinflation right around the corner. Five years later it hasn't happened despite the Fed's profligacy and the continued inflation of our debt bubble. I am not willing to bet that it will happen in the next five or ten years, or ever. Maybe high inflation, but I doubt we will see hyperinflation within any time frame that would affect my planning. Nonetheless, as I said in the above post, having some insurance against inflation is prudent.
I reserve the right to be wrong. ;^)
Doug
EDIT:
I may be wrong about the SDR:
http://www.zerohedge.com/contributed/2013-10-29/dollar-really-losing-its-reserve-currency-status-…-if-so-what-will-replace-it
[quote=gillbilly]here's a part of the well-known "Serenity Prayer" that is helpful to me to say once a day:
"Serenity Prayer" written by Reinhold Niebuhr (1892-1971) Grant me the serenity to accept the things I cannot change, Courage to change the things I can, and the wisdom to know the difference. Living one day at a time; Enjoying one moment at a time; Accepting hardship as the pathway to peace.Just read an article about preparing for death. Isn't that the only real preparing we should do?...a spiritual/mind/body preparing, instead of trying to prepare for surviving an event that may or may not come? Death absolutely will come to all of us. Not trying to be morbid, just pointing out the only certainty we know will happen in the future. There in lies transformation for me. Peace! [/quote] I'm ever cognizant of how brief my stay on earth will be, and in that regard, I think that the best use of my time is to build an ark so that my children, friends, and community members can view an attempt at navigating this new world we are entering. Going back to the land; growing plants; and building sustainable structures and bio-systems ( prepping?) has a deeply spiritual element, especially when it can be a model to reduce world hunger and suffering. I have never truly thought that a monastic "leave the world" type of spiritualism, is as effective as a spiritualism that inhabits every core of our society.
Very interesting discussion here on the difficulty of predicting the future and the tenacity of the current model. As someone who has made a fair number of predictions here and elsewhere (USD won't collapse but will strengthen for some significant period of time, real estate was in a bubble and would roll over, etc.) and therefore often been wrong, I thought I'd make a few comments.
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Self-referential systems with numerous feedbacks are inherently difficult to predict because the forces we extrapolate into the future are adapting under various selective pressures that feed back into each other. Innovations that seem small can trigger outsized consequences (for example, the web, fracking, etc.) I recall an anecdote about Bertrand Russell. A young critic detailed a previous position Russell had taken and noted an inconsistency with his current position. Russell declared, "Young man, I changed my mind." We're allowed to do that as new dynamics emerge and what we extrapolated as critical turns out to be less critical than some other factor we dismissed as minor.
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Systems feed on the herd instinct of humanity. Real estate was visibly in a bubble in 2004, at least in key markets, yet the bubble continued expanding for 3 more years as the herd drew in skeptics. Those of us who declared the bubble in 2004 were wrong for 3 long years. The dynamics of the herd overpowered rationality and prudence. Humans will thunder over the cliff just like other herding animals. Just keeping the ability to make independent judgments and sort data without ideological filters should be a key goal. It's OK to be wrong, but maintain an independent ability to analyze and adapt.
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There is a body of sociological study that looks at how what we perceive as risks defines our ideological/sociological world view. Risk assessment by groupthink is very powerful: we are moved by what we perceive to threaten our world view. Hierarchical types see different risks than egalitarian types, for example. Being aware of this bias helps us strip it out of our analysis.
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Adding up the first 3 points, the status quo is a dynamic system with many players. As I have often noted, just for one example, the US military/national security state does not necessarily share the same world view and priorities as other chunks of the empire. Various conspiracy theories neatly tie up the entire system with a bow, but I don't think it's that static and simple. If it was, it would be easier to predict. If we look at systems with few feedbacks, we find systems like the former USSR. It imploded because it lacked the intrinsic ability to reform/adapt for systemic reasons.
Everyone in the status quo has a stake in its survival. Every one of us wants to get our social security, our disability, maintain the freedom of a personal vehicle, have access to clean water and all the other goodies, and those becoming (or maintaining) wealthy and powerful in the current system want to retain their wealth and power. There are titanic forces that will bend whatever needs to be bent to keep their share of the swag flowing to them. This is just as true of the welfare recipient as it is the global corporation or politico. We shouldn't underestimate the power of this desire to maintain the status quo and bend perceptions to make that appear as if it is not just possible but inevitable.
- As a result of #4, alternative systems have very little leverage. Why bust our behinds getting a local farmer's market going when every supermarket is bulging with produce and products engineered to satisfy our reward centers? Everything is an uphill battle to reach the critical 4% threshold of influence in terms of establishing alternative systems. Our own personal resilience only goes so far, but getting people to invest in systems beyond themselves is difficult for any number of reasons, including active suppression by those benefiting from the status quo. The need for real alternatives just isn't strong enough to change world views.
These systems are still nascent. We're still feeling our way forward in revolutionary alternatives (such as "accredit yourself" as an alternative to $100K college degrees in theater studies).
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Nobody fully understands these complex systems such as the reserve currency, even though the systems have been functioning for decades. If we add up certain dynamics, we would feel very confident in saying this system should not exist–it should implode right now. Yet it continues on year after year. It is not just being perverse–it's very difficult to understand these systems because of the self-referential feedbacks and the motivations of the players to keep it going by whatever means are at hand. I have been looking at the USD reserve currency for years and am humbled to realize nobody really has a firm grasp of its basic dynamics. (At least I haven't found any such source.) There are widely disparate descriptions of its mechanisms and costs/problems, none of which totally accounts for its continued resilience.
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I tend to think John Michael Greer's concept of catabolic collapse is likely to be the most correct in terms of predicting future dynamics. Things keep following the same vectors for all the reasons stated above until something gives and they reset at a lower level of complexity/energy consumption. Everyone with a stake in the current system takes a hit to their desires but they still retain some share of the swag. This can continue for quite some time, Rome being a pretty good example and various corporate/nation-state failures being more recent examples.
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I think it is fairly self-evident that we are in an unprecedented era–just looking at energy, debt and the internet is enough to reach that conclusion. This means the past is not a very reliable guide. As a result, many people look to behavioral models of economics etc. to explain everything in terms of human emotions. This also has limits, as systems have dynamics that may originate in human psychology but human psychology alone does not explain their dynamics.
New models of doing things are emergent, but that is not a passive process. Some individuals actually have to make this happen by thinking things out, proposing systems, setting up a network of like-minded people, etc. etc. etc. I think our goal here is to build that structure at least conceptually so people who are completely wedded to the status quo have some alternative framework to grasp when the stairstep down finally breaches their confidence/faith that the system is eternally sustainable as-is.
Forgot to mention that all this has led me to issue fewer predictions about anything.
I agree with the concept of catabolic collapse. We have seen a steady deterioration in our economic well-being for 40 years and that trend does not appear to be changing much. What we do about it is the big question. That breaks down into two parallel tracks imho. First, building personal resilience. In terms of personal finances that means getting out of debt and acquiring tangible assets. This site is devoted to those actions.
The second track, however, is much more difficult. Somehow we must significantly change our whole economic structure. This video does as good a job as anything I've seen in tracing our deterioration from a manufacturing economy post WWII to the financialized economy we have today and does not have an optimistic outlook for improvement absent massive political change.
https://archive.org/details/scm-215026-randymandellfinancializingame
The point is that the 1% (simplified jargon) is in firm control and profiting mightily from the current system. Our entire governmental structure is beholden to the 1%. Nothing fundamental is going to change in such a regime. Therefore, it strikes me that it is time to begin a discussion in forums such at this to really take on the question of political change, i.e., take over by the 99%. This is not a left-right, Republican-Democrat issue. It is an up-down issue and will not be adequately addressed until we confront that ugly reality.
The question is can we do it by the ballot box or will it require some other kinds of action? The bottom line is that no matter what course we take, massive education of the 99% as to the economic realities has to be accomplished.
Doug
Taking back the govt at the ballot box is one possibility, but the Powers That Be seem so entrenched and the public so cowed/catatonic that political reform seems unlikely. The alternative is more people edging out of the status quo and developing parallel systems that still rely on basic infrastructure (the Internet, for example) but not on debt/financialization or govt control/funding.
CHS, what a great post! Thanks for taking the time to write it. A couple of comments and questions…
I wonder if this was in response to Godel's theorem? For those who don't know, Godel's theorem brought Russell's Principia Matematicus (his life's work) down in one stroke. Russell was gracious enough to accept defeat. How humbling.
You wrote: I recall an anecdote about Bertrand Russell. A young critic detailed a previous position Russell had taken and noted an inconsistency with his current position. Russell declared, "Young man, I changed my mind." We're allowed to do that as new dynamics emerge and what we extrapolated as critical turns out to be less critical than some other factor we dismissed as minor.
You wrote: There is a body of sociological study that looks at how what we perceive as risks defines our ideological/sociological world view. Risk assessment by groupthink is very powerful: we are moved by what we perceive to threaten our world view. Hierarchical types see different risks than egalitarian types, for example. Being aware of this bias helps us strip it out of our analysis.Are you referring to Kahneman's research? I found his work fascinating and would be interested in reading other perspectives if you have any recommendations. Your 6th bullet point on the reserve currency is very interesting and I would love to see an article on that very subject! Finally, Arthur continues to beat McGillchrist's drum of left/right brain thinking and the concept of modeling, with which I agree. Have you read his "Master and His Emissary?" If so, I'm curious as to your thoughts. I've come to the conclusion that for us to be open to the emergence of new models, it seems to me those emergences will come from outside of our self-referential systems, but maybe not, who knows. Recently I've been researching how Google's search engine works and what I'm beginning to see is that the internet network (as Arthur pointed out awhile back) is beginning to look like the neural network of the brain, which we access by way of search-engines. The problem I see is that search-engine access is constructed in a left-hemispheric approach (i.e. self referential). My notes on this are too long to post, but here are a couple of the sites I've read recently on the subject: http://www.google.com/insidesearch/howsearchworks/thestory/ http://infolab.stanford.edu/~backrub/google.html I've found the algorithms used in search engines leave a lot to be desired and often push what I call right-brain connected SERPs (search engine result pages) to the back of searches (i.e. SERPs might equal 45,000 results, and what I consider right-brain SERPs only begin to appear sporadically in the 500 to 1000 range of how the search engine ranks SERPs in regard to quality and freshness). This is similar to how McGillchrist describes the left hemisphere inhibiting the right hemisphere. How many people spend the time going through the layers of search pages to get to those more distantly connected type SERPs? Google writes in regard to their algorithms for indexing (using string theory) - Algorithms – “We” write programs and formulas to deliver the “best” results possible. I question the "best" results possible now that I've taken the plunge into this research, especially in light of the SEO (search-engine optimization) companies that game the system (turns out quality/rank can be manipulated by money - surprise to anyone?): http://rankingloophole.com/ I'm finding this rabbit hole interesting, and thought it ties into what your post discusses. Again, GREAT post, and I hope you find some of what put forth of interest. Thank you!
Wow, Gillbilly, you are a polymath! 1. I don't think Russell's comment was in reference to Principia–but I can't recall the context. Russell advanced all sorts of unpopular ideas, and one of his essay collections is titled "Unpopular Essays."
2. I think Kahneman's work on our difficulty at deliberation is relevant, but the concept of risk assessment as critical comes from Dan Kahan and others: "cultural cognition of risk" is the fancy name for the idea.
3. Your wish is my command–I will propose the reserve currency as my next topic on PP.com.
4. I have long been interested in left-right brain issues, going back to "Broca's Brain" of the 70s. I haven't read "Master and His Emissary" but am familiar with the basic thesis. One might as well mention the three other layers of the brain, reptilian, mammalian and frontal cortex, each of which generates risk assessment and responses that can be wildly at odds with rationality or deliberation.
5. Your research on search engines is new to me and I have no useful response at this point. As for where alternatives arise, I suspect cross-disciplinary people are the primary source, i.e. those who take some insights in one field and apply them to some other field. Then there is capitalism's core, which is seeing an opportunity to reap big profits from some innovation. Hey, it worked for the guy who started AirBNB, which is saving millions of people major money while distributing their vacation rental fees directly to households…
We might also look to the desire to fix a problem as intrinsically, not to mention ethically, interesting, regardless of the profit (or lack thereof). Perhaps Linus Torvald's Linux is an example of this.
Thank you for the thought-provoking commentary.
Charles,
I hope you do tackle the concept of reserve currency. Reserve currency is a concept that only makes sense in a fiat based system. In the past, gold was the ultimate reserve. Is it still?
As you analyze the pros and cons of the reserve currency over time, I hope that you include some value judgments. Is it a curse or a blessing to have the reserve currency? How has this changed with time? Can there be another reserve currency if/when the dollar based system fails? Where to from here?
Thanks,
Grover
Thank you for your reply(s). The dynamics of the reserve currency is an enigma for me. I understand the fundamentals of international exchange markets and the role of the reserve currency, but the overarching dynamics of the/a reserve currency is difficult for me to grasp. It's easy to understand how it benefits the issuer of the currency, but are there varying degrees of benefits after that and how how are they determined? How has Triffin's paradox evolved over the past 50 years? Is it even relevant? Would SDRs (as originally was promoted by the IMF) or gold be a better or more practical reserve. I also second Grover's requests. I look forward to your insights. Thanks again!
the middle class doesn't have a clue how to work under the table, in the under ground economy…so how is that realistic? i know you play with that…but others grasping that?most people on this site can't even give up a shower, or heat for a day, or electicity…are we not our own problem.?
and then to think the internet will remain there in place for us? our celll phones…?
rules are changing and changing fast…
the public ie us is cowed…you are so right about that.