"Nothing Is Risk-Free In This System Of Chaos"
Submitted by Tim Price via SovereignMan.com,
In the field of mathematics, chaos theory studies the behavior of systems that are highly sensitive to initial conditions.
The idea in chaos is that, like life itself, where you start today has tremendous influence on what happens next.
In chaos, even very tiny changes to initial conditions can lead to wildly divergent outcomes further down the line.
Again, think about life: how different would your outcome be if you’d been born in the next town over? Or to different parents?
The film ‘Jurassic Park’, adapted from Michael Crighton’s novel, brought chaos theory into the popular realm.
A wealthy scientist, John Hammond (played by Richard Attenborough), uses DNA derived from fossilized mosquitoes to recreate dinosaurs on a remote island.
But once brought back to life, won’t they breed?
No, says Hammond. Because all the dinosaurs on the island are engineered to be female, by way of chromosome control.
Dr. Ian Malcolm, a chaos expert played by Jeff Goldblum, has been brought along to assess the project. His assessment is skeptical to the point of hostility:
“[T]he kind of control you’re attempting is not possible. If there’s one thing the history of evolution has taught us, it’s that life will not be contained. Life breaks free. It expands to new territories. It crashes through barriers. Painfully, maybe even… dangerously…
“I’m simply saying that life… finds a way.”
Life -nature- does indeed find a way, and Malcolm barely survives into the inevitable sequel.
Jurassic Park is, of course, a work of fiction.
That central banks that exist today, on the other hand, are fact.
And it is fact that for several years they have been attempting to artificially manipulate the market.
We are seeing this now with the Chinese government’s vain attempts to control the carnage in the Shanghai and Shenzhen stock exchanges.
But Western market observers have no claim to moral superiority.
Western central banks have, for years, been pulling the same failed stunt, propping up the market by manipulating interest rates.
Perhaps they should stop with these policies. But that is not the way of the bureaucrat. The beatings must continue until morale improves.
Since the global financial crisis, the financial markets have been a battleground between the forces of deflation and inflation.
Deflation represents the free market. A free market wants to reset the game, and clear all the redundant pieces from the table.
Inflation represents the State, and the central banks (whose notional independence may be unlikely to survive this ongoing crisis).
The State wants to perpetuate itself, and is indifferent to the costs incurred to its citizens in the process.
Bankruptcy, inflation, deflation, market panics, banking crises, currency crises, capital controls? These are all acceptable losses in the eyes of the State.
But one of the hallmarks of chaos is that it is impossible to make precise long-term predictions, especially in addressing the question ‘when’.
Imagine dropping grains of sand onto a table.
At first it’s just a single grain. Then two. Then three. Then eventually thousands. Soon a pile of sand forms.
For some time, the pile of sand will remain stable.
But at a certain point, the addition of one more single grain of sand can cause the entire pile to collapse. But we cannot predict in advance which grain that will be.
Similarly, we cannot predict which additional dollar, euro, pound, yen, etc. worth of debt will be the one that causes the pile of debt to collapse.
We cannot predict which additional dollar, euro, pound, yen, etc. printed by central banks will be the one to cause confidence in the currency to sink.
But we can see the mountains of debt and paper money growing ever larger, posing greater and greater risks to the system.
Nothing is risk-free in this system of chaos. And there is no longer any easy solution to safely grow or preserve your capital.
Risk is now everywhere. If you invest in the markets, there is risk of temporary or permanent loss of capital.
Even if you do nothing and simply hold cash in a bank, there is bail-in risk and financial repression.
This is our reality now… the consequence of a financial system that’s at least a century old.
In a way, today’s mad scientist central bankers have engineered financial dinosaurs back into our time.
They think they can control the system. But judging just from the first chaotic week in financial markets so far in 2016, life is finding a way.
And anyone who understands this chaos is preparing to survive into the inevitable sequel with an extremely well-balanced portfolio in full view of the risks.
(9 votes)
»
- Login or register to post comments
- Printer-friendly version
- Send to friend
- advertisements -
Somewhere, a butterfly is flapping its wings........
Anarchy in the USA - https://www.youtube.com/watch?v=TZkr7mGhS10
Somewhere a tinfoil capped miner just bought another pile of shiny.
"Risk is now everywhere. If you invest in the markets, there is risk of temporary or permanent loss of capital.
Even if you do nothing and simply hold cash in a bank, there is bail-in risk and financial repression."
<cough> Gold <cough>
Loved the article exept for the last sentence:
And anyone who understands this chaos is preparing to survive into the inevitable sequel with an extremely well-balanced portfolio in full view of the risks.
I would argue that "anyone who understands the chaos" is already out of all markets and in their bunker under the denver airport already!
My survival portfolio (rifle, sidearm, magazines, rifle plates, radio, knife, pack, and FAK) is extremely well balanced. I can run, crawl, climb, shoot, sleep, shit, and ride a horse or bike without losing my balance.
Then what?
until someone shoots back.
I can...crawl...shoot...shit.
No, Archies Bunker.
Please, thanks to ivy-league eCONomists and the criminal banking cartel words like "risk" or "collateral" or "price" or "value" are meaningless...
We all know what the outcome of such a "let the majority eat cake" monetary experiment will be.
Aaaaand there's the 3:30 ramp. Right on time.
risk is extinct. janet and ben saw to that.
Shit happens. To think otherwise is a fools errand.
Prepare.
When was it any different? Maybe cash before Nixon got rid of the gold standard but that's it. Everything else has price risk. Always has - always will.
imo what's changed is the banks are manipulating the risks (i.e. rigging the game, i.e. cheating). when people invested in white star they took risk on the line's ability to turn a profit. when white star built the titanic they incurred risk of being able to sell tickets & operate route(s) at a profit. when sapt smith ordered full steam ahead into fog in n atlantic he incurred risk that an iceberg (& here's some key words) might randomly be in ships path. a series of people (including passengers) rolled the dice & they came up 7...
what's changed today is that white star would pay goldman to sell the bonds, goldman would then take out cds(s) on the bonds then spend a couple hundred $k to have the iceberg towed into it's path to collect & have exactly ZERO consequences for it.
Prepping takes on a new meaning with this.
You've got to find a win/win situation to protect your lifestyle and your money, but keep living in comfort.
But I am in Portugal.
You can do this. http://fontebispo.com/win-win.html
Use Government funds, protect your money by putting it into a government backed scheme.
PH
Just get somthing that takes a certain amount of energy and labour to get out of the earth/rock and make a currency out of it and there is no risk at all !
Value BITCHEZ !!
"And anyone who understands this chaos is preparing to survive into the inevitable sequel with an extremely well-balanced portfolio in full view of the risks."
And anyone who understands this chaos is preparing to survive into the inevitable sequel with an extremely well-balanced portfolio full of risks.
Fixed it for you.
yeah... gold... PLUS, Hedgeless Horseman's list, including items from his past posts.
Self-sufficiency bitchez
They unloaded all the risk to working people. world oligarchy sleep well at night. They have police, nukes their own farms and printing press.
It is we who will die or suffer even more unless people make use of all those lampposts in D.C.
https://contrarianopinion.wordpress.com/economy-update/
ABSOLUTELY CORRECT. all of the risk gets unloaded to normal working people, who will pay extra taxes, lose good jobs, and discover that the money they saved for old age - has been stolen.
WATCH OUT when any Government says that they are creating a 'National System' to manage pensions and IRA's. Because that is the direct path to STEALING peoples' retirement funds. And you can bet it's coming ... no matter who runs the Government.
System of CHAOS. got that right.
No need to say why. we are midway into the major transition of the global economy AWAY from the US dollar, and AWAY from the US Consumer.
And TPTB fought this transition tooth and nail ... even if it bankrupts America in the process. Because the political system is only about Power, Influence, and Greed. And the markets are only about Greed and Fear.
Guaranteed to produce maximum chaos.
The only risk-free investments are treasures kept safe in heaven.
Earthly investments are never guaranteed and can always lose value, or be confiscated by someone with more firepower.
Mayhem is coming: https://www.youtube.com/watch?v=oVngo_slWJ4
Keep powder dry and prepare for the bargain-basement prices across most asset classes.
Why? Because. It. Is. Not. Different. This. Time. No. Its. Not.
330PM is risk free.
I hear Yellens got this shit.
Wow they hit the ramp hard today...wonder how much funny munny it took? Paging Kaiser Sousa!
"Risk is now everywhere. If you invest in the markets, there is risk of temporary or permanent loss of capital."
Did the person who wrote this 'revelation' ever look at historic market charts?
Markets = risk. At all times throughout history.
Trump is promoting the concept of managing the chaos by stopping the insane importation of muslims from low skill, violent backgrounds....for a start.
Doesn't seem like terrible risk mitigation practices.