Guest Post: The Best Of Times, The Worst….

Tyler Durden's picture

From Chindit 13

The Best of Times, the Worst….

It was the best of times, it was the worst of times.

This time is different.

There is nothing new under the sun.

All of us---by “us” I mean human beings---tend to think too much with our egos and not enough with our rational minds.  When we are young, we think we have unique and novel insight into life and the human condition, as if we are the first person to have ever thought certain thoughts.  We all read---at least back when I went to school---the classic literature, the Greek playwrights and Shakespeare, but it is only when we reread these works as adults that we realize that everything has been thought of before.  The best we can do is put a slight sidespin on it.  We are humbled.

We bring this same tendency---a belief in our uniqueness---into the issues that face our time on Earth.

“There has never been a better time to be alive.”

“This is all going to blow up faster than most people think, and it is TEOTWAWKI.”

Somewhere in the middle probably lies the truth.

Many of us---myself included time to time---fear that life as we know it is about to come to an abrupt and painful end.  Others---most visibly those who are wheeled out as guests on CNBC---think things are on a rise as far as the eye can see.  And for some---I am thinking John Paulson and David Tepper---times have never been better.

Who is right?  Maybe nobody.

Things have always been this way…wild optimists and wild pessimists.  If one is objective, one can see a time far worse than our own in the not so distant past.  It helps---me, at least---to try to put things in perspective and bring that perspective to today.

Consider a time that all of our parents or grandparents faced.  The 1930’s brought the Great Depression, soup lines, and 25% unemployment in the US.  Horrible it was, and an extra slap coming in the face of those who had lived through WWI and through the Great Spanish Influenza, or Weimar Germany.  At the same time, there was a Gilded Class who sailed through the 1930’s.  Think of those who bought the 1932 Duesenberg SJ or the 1937 Bugatti Atlantic or Royale, which might be the most ostentatious automotive displays of wealth ever created, Depression or Boom time.

Even darker clouds hung over the planet by 1939.  Japan had already invaded China and had carried out wholesale slaughter at Nanjing, and had “invented” aerial bombing of civilian targets.  Hitler had reached the height of his power, had already entered the Rhineland and was threatening Poland.  Neville Chamberlain, on the other hand, saw “peace in our time”.  Pessimists One, Optimists Zero.

By December 1941 the entire world was at war.  Eighteen year olds in all the developed countries were not worrying about Saturday night dates or what job to take, and certainly not about getting the next permutation of the iPad;  there were worrying about staying alive.  Rationing was widespread.  Jews were being rounded up in Europe for humanity’s latest attempt at genocide, not even three decades after the last attempt in Turkey.  To pay for the war, US budget deficits hit levels never before seen, and not seen since.

If one had thought the entire world was going to come to an end, it would not have been viewed as tin foil thinking.  It looked to be inevitable.

Then it stopped.  The war ended.  Germany and Japan were defeated.  People cleaned up.  Economies began to grow again.  Manufacturing turned toward building consumer goods rather than armaments.  People’s attitudes turned positive.  The world hadn’t ended;  in fact it reached one of the most prosperous times in history.  Of course, by the late 1950’s it wasn’t good enough for the young.  It never is.  Discontent defines the young, and is probably what leads not only to change, but to cycles both good and bad.

One could make quite a successful argument that today’s problem are minor in comparison.  That doesn’t mean that we will have smooth sailing, but in a relative sense perhaps it will seem so, at least to those who lived through the Great Depression and WWII.  Think of the way a cancer survivor might view a subsequent common cold.

For most of the rest of us, it might prove challenging, even upsetting.  Some of us will plan for TEOTWAWKI.  Some of us will believe it is the end for the US, or for Europe, forgetting that collapse is often a lengthy affair (Rome) that encompasses many generations at best, and a medium term event (Japan, 20 years and counting) at worst.  A country as large and significant as the US is unlikely to be Zimbabwe, or even Argentina.  Collapse, if it comes, likely will be an extended affair.

Admittedly US finances are horrible, both public and private.  Corporate finances are not so bad, although since many of their assets are cash and UST’s, they will be subject to some pain if the worst happens.  Their fixed assets, however, represent productive capability and should retain some value even if things turn nasty.  They should survive to the other side, whatever that other side might be.

Sometimes our mindset leads us to overestimate things.  One example I recently discovered, much to my surprise, was that today’s money printing, at least in the two common aggregates, is considerably slower than during the commodities’ bubble of 1980.  Most of us today bemoan the pace of money creation, but how correct are we to think we are in uncharted territory?  Using as an end point two silver market highs (1980 and now), in the two years prior to those highs, M1 growth in 1980 matches M1 growth today, averaging .65% per month in 1980 and .64% per month today.  M2 shows marked differences, however, growing three times faster in the period before March 1980, .75% per month vs. .25% per month today.  Surprise.  Where today’s money printing shows up is in the monetary base, or MB, which includes excess bank reserves.  That is the Sword of Damocles hanging over the market, and the future is dependent on how that is resolved.  (On a side note, I am suddenly far more concerned about the deficit than money printing, though both are worrisome.)

Some will say this post is too optimistic.  I might say the same thing myself, tending as I do toward being a Cassandra.  Being a Cassandra at heart makes me hedge, so it has merit.  Being a student of history, however, prevents me from going “all-in” in the TEOTWAWKI trade.

Three years ago, before the printing and the bailouts, I never would have expected that the S&P would be above 1300 today.  I wouldn’t have expected the RE bubbles to continue in China, Hong Kong, Singapore, Australia and many other countries.  I’m not sure what I expected the dollar to be, but being in a mid range of its recent performance against the euro probably was not what I thought, though overall it is not far from earlier lows.  Gold does not surprise me, though silver does.  Silver has spent its recent history jumping back and forth between being the Poor Man’s Gold and the Rich Man’s Copper, never quite making up its mind what it wants to be.  I’m not sure it ever will, and its schizophrenic behavior will provide many trading opportunities.

My worst fears did not materialize.  Some of you might be thinking “yet”.  Maybe you are right.  It is very difficult to figure how we can escape this fiscal mess, the over capacity mess, the general public and private debt messes, the EU mess, the natural resource shortage, Japan’s mess, and the assumed future collapse of the various bubbles around the world.  I don’t how it can happen.  I am modest enough to admit that just because I cannot think of a way does not mean it cannot happen.  I suspect that if I was eighteen in mid 1942 and on a boat toward the South Pacific, I would not have been able to see how the world could possibly escape complete collapse.  Yet it did. 

I think most of us develop mindsets that become our comfort zone, our steady state.  For some that is optimism, for others pessimism.  If we drift from that comfort zone, we find a way to push ourselves back into it, even if it is bad.  Some people like to be miserable, because it is something familiar and human’s have an odd tendency to resist change, even in the face of emotional misery.  Others always try to see the bright side, and seem to be able to find a way back there whenever they drift away.  Personally, I think I try to find a middle ground, which I might call the world of cynicism, where I can see things that can and should upset me, but I try to make fun of them and find some humor in them.  (My own definition of cynic is a hopeless romantic in a suit of armor.)  Something that is truly difficult is moving oneself from one mindset to another and trying to stake out that new ground.  Consider this:  how many find themselves gravitating toward the bleakest articles here and find themselves in a kind of joyous agreement with the most pessimistic and negative comments (“this is all going to blow up faster than most people think”)?  How many have the opinion that they can hardly wait for everything to blow up, even though few have had any first hand experience in a Mad Max type of world?  Would people regret it if they get what they wish for?  I suspect almost all would.

Most people know where their sentiments stand.  Just for fun, here’s a test.  Suppose the following links to articles appear on a financial website.  In what order would you read them, if at all?

1)  SNAP Recipients Reach All-Time High
2)  Major Economist Sees Long End of the Yield Curve Collapsing
3)  Signs of Recovery in Spending, Hiring Figures

I’m guessing 1-2-3 and 3-2-1, pessimists and optimists in those orders.  The second fictitious article is a trick, as it probably generates a lot of cognitive dissonance.  A major economist?  What the heck does an economist know?  On the other hand, it sounds negative, so maybe it’s worth taking a look. 

Personally, I’m going with cynicism and history, and hedging my bets.  If I am wrong I may be swept away by events.  If it turns out as bad as many people are predicting, however, I am not sure survival is the more attractive alternative.

Some say hope for the best but plan for the worst.  I prefer hope for the best but plan for the worst one is willing to accept.

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Robslob's picture

This time is different..."they" have a plan.

Sudden Debt's picture

yes... problem is that they wrote it down on that roll of toilet paper they forgot to take with them when they left the gas station...

They did recover most of it:

THE PLAN IS TO "piece of shit" AND TO "piece of shit" "hughe chunk of shit" "something greenish" AND THEREFORE THE TAXPAYER WILL GET LOT'S OF "piece of shit" piece of shit" AND THE REST OF THE MONEY WILL GO TO THE 200K+ INCOME PEOPLE.



Re-Discovery's picture

There have always been optimists.  There have always been pessimists.  Yadda, yadda, yadda . . .

I'm sure there were optimists in Buchenwald, but the situation was pretty f***'d up. 

Your article could have been condensed to your final sentence:  Prepare for the worst. 

How anyone feels about where we are just defines how long they are willing to risk/trade that the worst is not tomorrow. 

SWRichmond's picture

“There has never been a better time to be alive.”
“This is all going to blow up faster than most people think, and it is TEOTWAWKI.”

Somewhere in the middle probably lies the truth.

I genuinely don't understand why the OP thinks the first two statement are mutually exclusive.  They are not.  This IS going to blow up faster than most people think, and there has never been a better time to be alive.  The genuine liberty our ancestors knew, right here in North America, is within our grasp if we have the courage to seize it.

After all, never let a good crisis go to waste, eh?

Sudden Debt's picture

It gives more and more people time to prepare for what is comming.

And when the shit comes down and you didn't to squat: HA HA HA!!

Only the idiots will be running circles than!

It's a luxury that we all get this extra time to prepare against the shitstorm endgame that's comming. You can chose to spend now like there is no tomorrow or save up and be able to spend 50 times as much when the shitstorm hits the economy as we know it.


samsara's picture

Good Job Chindit

DoChenRollingBearing's picture

Make mine a + 4.

Nice perspective Chindit13, well done.  Indeed, there is nothing new under the sun.

Robslob's picture


Where did Math Man's quote go...he was the first poster right above me...hmmm

Math Man's picture

Don't know.  Apparantly ZH is in to censorship these days.

Math Man's picture


All of us---by “us” I mean human beings---tend to think too much with our egos and not enough with our rational minds.

Which is why ZH readers are still trying to buy the dip in silver.

Sean7k's picture

It appears you are the dip in silver. 

Poor Grogman's picture

While some others are busy posting crap that nobody wants to read.

simonsito's picture

angry you missed 33? :) nobody still trying, everybody DID BTFD last week....! Maybe you might wanna look at OI in silver.... I mean, youre the math man in here, so theres some pretty bullish math, isnt it?

but I appreciate your service for the community, and deeply regret your comments being deleted, although I think its a technical issue more than censorship...

old naughty's picture


I am confused...Are you saying only humans would buy the dip in silver...And you are not?


Henry Chinaski's picture

Benevolent dictatorship.  As it should be.

FEDbuster's picture

I nominate Ron Paul for the role.

BTW my take is that we slide into a Mexico like economy (rich and poor), TPTB will move towards inflation and WW3 (and maybe a man made pandemic to thin the herd).

Gold 36000's picture

I was supposed to take over for Village Idiot while he was on vacation.  Sorry I forgot until today.  Did my best.  Now mom is telling me to get ready for school.

Robslob's picture

Hi Math Man...I mean Gold36000

gaoptimize's picture

What will you say 12 months from now, when there is unlikely to be a FY2012 budget and the miracle of compound interest along with the predictable delay and pray takes us another year closer to the brink?  I think you way over-estimate the duration of the inevitable crisis/collapse, and as the pesimist in me prepares to survive it, the optimist in me is motivated by the explosive growth in a freshly liberated economy that will take us to the unbounded alternatives of the Kurzweil Singularity.

jesse livermoore's picture

HEY LOOK math man is i feel confident the bottom is in, when this troll yells sell sell sell.. I will do the opposite, and buy buy buy.

razorthin's picture

"Corporate finances are not so bad, although since many of their assets are cash and UST’s, they will be subject to some pain if the worst happens."

Wow yet another commentator either with a short memory or clueless to the FASB acounting fraud caper.  Corporations are not "flush with cash".  They are flush with crushing debt that they are allowed to keep off the books - especially the banks, as we all  know.

Anyone in this information age with eyes willing to see knows that beneath the veneer of lies things are enormously worse than they appear.

gordengeko's picture

Actually a lot of major corporations(especially automotive) are flush with tons of cash.  That's why these financial institutions are sitting on a shit ton of reserves and haven't started lending out a lot because the companies they lend to don't need it, they have their own for right now.  Also a lot of companies were/are being tight with their money.  They are starting to make moves now and spend their cash and hire more.  We'll see how it goes, these CEO's aren't stupid and they know the bernanke is in a spot.

SoNH80's picture

Yeah, well, they ought to get off their button and pull some triggers, etc., since the natives are getting restless these days.

Sean7k's picture

Nicely written piece Chandit.

Unfortunately,it has an emphasis on economic rather than political theory. While I think you're right about how the economics of the world present a pendulum swing that slow and deliberate in it's actions, this account fails to measure the gain or loss of liberty.

Ignoring the consequences of the actions of a group of Elites to regain their control over productive labor and resources diminishes the impact on all our lives. During the 1800's, much of the world was continuing to experience economic and political freedom they had never had. 

In America and Europe, this translated into better standards of living, as well as more rights and freedom from the wealthy class. It allowed more groups to participate (Blacks, Women, Hispanics, etc) than ever before. Labor had organized and used their strengtgh to negotiate better conditions- often at terrible costs to the organizers.

Since the early 1900's, America has seen the labor movement coopted, debt slavery in the form of a central bank, corporate and banking control of their government that has traded freedom for a creeping police state. This are the actions of an elite class that is re-establishing control. Lower wages, lower living standards, more police control and ridiculous levels of wealth for a selected few.

There is a danger in confusing quality of life with the quantity of life. Yes, we will always survive as a species (I am an optimist, see!), but when is survivial enough? 

The costs of much of the advancement of the general population has usually come at a high price (revolution, pandemics, genocides), it is the nature of the Elites and their methodology that is a major causation. That, and our collective ignorance of the power of numbers. 


mtomato2's picture

I really like this article, and I really like your response.  Both very even-keeled and prescient.

The writer really singled me out when he discussed those who yen for an end.  Every time I am behind a Yukon that's on it's way to the grocery store (or even better: school) with a gaggle of zombified kids in back watching a video on the DVD player I think:  This simply must end.  We are through.  When is natural selection finally going to have its way with us?

It hurts to think that maybe we have beaten it, and the insanity can, in fact, go on forever.  It's so unjust.

On the flipity-flip, I have an investor for an invention of mine, and I need a strong economy for it all to work out.  So, Cognitive Dissonance.  To the max.

My kid is an Eagle Scout and an honor student who plays Varsity Football and baseball.  He hopes for an EMP.  He simply can't stand the insanity.

He's one who would make it through.  Teach your children well.

mayhem_korner's picture

When is natural selection finally going to have its way with us?

Be careful not to universalize your sentiments.  Not all of "us" have lost our way.  Some of "us" have dinner with our families every day, do not allow our kids to text on i-phones, have "no tv" times, do chores regularly, and invite others to attend worship services on Sundays.

I'd also suggest you research your "natural selection" myth a little further...

mtomato2's picture

Mayhem, grow up.  You response is ridiculous.  Obviously, I didn't mean to be taken literally insofar as to include "everybody" as "us!"  As evidenced by the fact that I extolled the virtues of my oldest son.


As to your pithy comment on natural selection, grow a brain.  Even the most ardent of us traditional Orthodox Christians acknowledge that, given certain environments, certain species are more likely to adapt or fail than others.


Your all-or-nothing approach is running some otherwise good thinking people off the reservation.

mayhem_korner's picture

1) Say what you mean and mean what you say.

2) I don't know what ardent, traditional, Orthodox Christians describes.  The Pharisees would have claimed the same, no?  I'm still waiting for the examples of those adapted species. Not a single new "evolved" species has been proven as yet - not one.

3) Happy to oblige on the reservation thing.

While you're at it, take some time to inventory what you believe are absolute truths.  Given your response to me, I suspect you will struggle with that.

chindit13's picture

Good comment.

I am of the view that the "elites" may well have less control today than they did at most any other time in history.  There are simply too many variables for any group, no matter how clever, to control, and access to information and the ability to spread opposing views has never been easier.

Consider the control the Catholic Church has had during its history.  It took the excesses of the Borgias, coupled with a critical mass of free thinking (Erasmus, Galileo, Copernicus, etc.) to begin to chip away at its power.  They hung on to "acceptable thought" in Spain far longer, hence the Inquisition.  Eventually, though, perhaps owing something to Gutenberg, they lost out.

I have resided or visited a certain country for a decade and a half.  In my early time here, the population lived in total fear.  People did not dare share their thoughts even with family members, as no one knew whom to trust.  Every block had overseers, who ran groups of eyes and ears, who reported (or made up) anything that suggested less than total admiration for the government.  People did disappear in the middle of the night, never to be seen again.  The government itself split amongst the top players upwards of 95% of total revenues.  THAT is control.

Much, though by no means all, of that control has been lost.  The arrival of many more outsiders had some to do with it.  Better communications also contributed.  The internet, and things like SOCKS proxies, blew things wide open.  Where it goes from here remains to be seen, but the genie is out of the bottle here.

In the world at large we have too many competing groups whose interests do not overlap.  The US and Europe no longer hold the majority of the world's wealth and power.  It is highly unlikely that Soros and Wen see eye to eye, or Jamie Dimon and Muhammed Mahathir.  Greed and ego also breed intramural competition, though at times players do cooperate if everyone benefits (bank lobby is an example).

Neither the USG nor the MSM can control the narrative one hundred percent anymore.  Even within we have Fox and MSNBC, and to a much lesser extent, Dems and Repubs (whose major difference seems to be regarding gay marriage).  Outside there is a spectrum of contrary opinions, each with its own audience, ranging from Chris Martenson to Infowars.

For the most part the USG and MSM have retained majority ownership of the message, but that is changing rapidly, just as in China the Party is losing control via the same internet and proxies I use here.

Obama emerged as the first internet President, though his message was roughly the same as what has come before.  I suspect we will have a new leader emerge who will see the change taking place and stake his or her ground with a message aimed at those looking for an alternative.  The time is ripe for it.  I even suspect that those who use whatever they can to maintain what they have achieved understand that things are moving out of whatever control they have established.

TIMMAYYY's picture

ha..hahaha, i wonder if this commentator has a golden ticket.


calming the crowds before they jump ship. please report to your concentration camp muther uckers. you will be screened and implanted. We will move forward, no matter how many eggs we break.


in 1930 they had no means of wiping out the planets population with with a flick of a switch.

Oh regional Indian's picture

Spot on Timmay. And good piece Chindit13.

The big difference between WWII and now is precisely that a non-nuclear world is now nuclear. And it there ever was a game changer, globally, Nuclear power/weapons have to be it.

And if not the weapons, th epower got us, via Japan, surprise.

More surprises coming too. Nuclear and Unclear ones.

I'd say prepare for the worstest.


old naughty's picture

Just as G2 is strategically preparing for, ORI?

They must have found a bigger (badder) OBL. Unclear who that is tho.

Water and nuclear...or nuclear and water...

Que sera sera...Sadness engulf me.

Oh regional Indian's picture

What will b we'll c, eh, Old N?



chumbawamba's picture

The other things that actually are different this time:

- Deficits were in the billions in the 1980s, now we're in the trillions.  Small percentages swing a lot farther on a trillion than on a petty little billion.

- The entire basis of our reality is going through changes that, while not unprecedented, are unprecedented in our lifetimes and in the lifetimes of every generation that came before us going back hundreds, probably thousands of years.  Sun is doing odd things with Earth.  The weather patterns are changing, the energy in the air is different, something is not right.

- Our system is much more complex and much more dependent on electricity than even in 1980.  If we don't have electricity, we don't have the internet.  Today, the internet IS reality.  One major solar flare will wipe out 70+ years of technological development in a very short multi-hour period.

Yes, this time it is different.  As it always is.  It's just that the difference this time is orders of magnitude/geometric, rather than simply mathematic.

I am Chumbawamba.

DoChenRollingBearing's picture

^---  The above observations are why we need the Chumbas, The Chindits and the ORIs here on ZH.

mtomato2's picture


Excellent comment.



chindit13's picture


I see your point.  I would call your view the Snowball Effect, gathering size as it goes.  Before guns, we killed with swords.  Guns let us kill faster.  Airplanes and poison gas let us kill faster still.  Then nuclear.  Yes, our ability to destroy grows in leaps and bounds.

Your other points are equally well taken.  I remain of the view that the actual problems we face, rather than the possibilities, are not quite as dire as 1940.  I also recall that the Black Plague wiped out somewhere between 25 and 30% of Europe's population (and during one plight gave us calculus as both Newton and Leibniz had lots of free time to think).

I also maintain that my own preferences for the manner in which I am willing to live life have me preparing only to the extent that I can survive in a world I would enjoy, or tolerate, living in.  Plus, I have found a few places to hide and ride out the worst of it.

chindit13's picture

Yes, ORI, nuclear can be a game changer. I remember seeing "The Day After Trinity", and in particular a clip where J. Robert Oppenheimer is being introspective and revealing the thoughts he had when the device was set off.  He is almost in tears.

Most everyone has read that as Oppie feeling guilty about what he helped create.  I saw if differently, that his sadness came from the realization that such a device was possible.  Oddly, he thought its development inevitable, but in point of fact the only group in history that independently developed the nuclear bomb were the people at Los Alamos.  Everyone subsequent was either given the technology, stole it, or bought it.


chindit13's picture

in 1930 they had no means of wiping out the planets population with with a flick of a switch.

Well, I guess nobody can have a "golden ticket", eh?  Or maybe only Elon Musk, Bert Rutan and Richard Branson.

Henry Chinaski's picture

I went back and re-read the classics, Homer, the Old Testament, etc. and came up with my own unique insight:

It's all about barbeque.

mtomato2's picture

It's all about bar-b-que and single malt scotch.

chindit13's picture

Like I said, nothing new under the sun.  Those silly Texans think they started something!

nmewn's picture

"I’m guessing 1-2-3 and 3-2-1, pessimists and optimists in those orders."

I guess I'm an optimist.

Good post Chindit.