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Guest Post: Apocalypse Trades: Neither Things Nor Bureaucracy

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Submitted by JM

Apocalypse Trades:  Neither Things Nor Bureaucracy

Given the utter implosion of the American consumer and Hurricane Irene, it is fashionable to be apocalyptic these days.  One should be disinclined to acquiesce to such visions.

One should not be blamed for being seduced:  a Federal Reserve apparatchik dictates the path of every asset class by his whim.  Regrettably, there is no reliability in predicting such whims of fate.  There is, of course, value in speculating to the end of anticipating probable decisions.  But it is sometimes best to ignore these perturbations as best one can and undertake reasonable, empirical explorations that buy what is cheap and sell what is dear.  Remember the words of the wise:  “there is nothing new under the sun.”
One should stick with time-honored traditions that ignore credit ratings and do one’s own diligent investigation of companies.  This obtains bonds that will be money good in a wide class of evil or jolly circumstances.  One should buy shares of companies with prudent managers who understand the best way to be black swan proof is to avoid excesses in both debt and austerity.  One should follow the general but not too rigid proviso that said managers respect their investors enough to return a healthy portion of their capital back via dividends in reasonable time.  If the prevailing opinion of the market is such that they trade below book value, then one should be doubly pleased to acquire them.  It can be more painful to carry on this way undismayed, but there is nothing like pain for feeling alive.

It is commonly held that financial markets are “gamed” against retail investors.  Fair enough assessment of some dreadful practices.  But for the enterprising, this rigging itself creates opportunity through market volatility.  One can game the game by buying into volatility spikes, that is, when all are pressing the sell switch.  This takes patience and discipline.  One should not condescend to buy shares of a mature business so disrespectful of its owners that it offers no dividend:  tosh on these.  One should not nurture delusions that an established company with a multiple reflective of 200x earnings is capable of growing into it:  insufferable presumption.

Above all, one should trust in people and their businesses to navigate uncertain waters, and view with distrust things and bureaucracies.  It is prudent to hold small tangible stores of wealth as a counterpoint to ever-increasing financial complexity, but only in small quantities purchased at fair prices.  This not said to be injurious.  It is said because bargain investments in people are most desirable.  People are creative, pliant, and resilient in ways that metals, commodities, or bureaucracies can never approach.  Firms and concerns of that sort are options on people, bounded by their limitations and fueled by unlimited desires.  In contrast, bureaucracies are condensates of other institutions, deadening instruments with negative carry on the human soul.  Some exceptions will arise.

The Scourge of Bureaucracy

The “bread and circuses” theatrical in the United States Congress last month ended with a stop-gap, thoroughly provisional approach to resolving the debt ceiling.  It led to some relief at the front end of the treasury CDS curve, which was ominously inverted.  This inversion is a measure of the childish depravity politicians now represent.


While the steepening of the curve seemed to provide a favorable wind in the sails, there is something disagreeable afoot.  It is the extent of the steepening at the long end which says all is not well.  Irresponsible kicking the can down the road is being priced into the protection premium on treasuries.

Notably, these curves are illiquid.  At the 5Y mid, the most liquid point on the curve, there has been a 7% increase in premium in the month following the debt ceiling deal.  This is nothing short of dramatic. 

The CDS market is simply the prevailing view of a given crowd regarding the credit worthiness of a referenced entity.   The crowd in question here comprises tier 1 banks, bond market dealers and a few other agents at the margin.  It is their view that prevails here.  The short-term resolution, if it can be called that, is more than offset by the long-term deterioration in credit-worthiness by their estimation. 

There are no easy remedies for this state of affairs.  But provocation that aggravates the situation serves no good.  The United States can borrow virtually unlimited sums for 10 years at 2% interest.  This capacity should not be spoiled due to the whims of the Crassus’ and Brutus’ in Washington D.C.  Drastic cuts in public expenditure will surely contribute to greater unemployment.  But without earnest action that aligns expenses closer to revenues, the problem of credit-worthiness reflected in CDS will invariably lead to limits on borrowing at precisely the worst time.  Neither austerity, nor total avoidance of painful responsibility is the right course Aristotle was right: the mean course is virtue.  The mean is anathema to apocalypse.

The Superfluity of Things

Tangible stores of wealth are indeed seductive, and apocalyptic overtones add to their allure.  But what is tangible can be taken.  Trading in apocalyptic settings has minimal gain and even the most tangible things carry risk:  there is no profit in an unshakable faith in them.  The only unshakable faith should be in one’s capacity to foster a world worthy of wonderful and useful ideas, avoiding religious matters.

It is here that the rules themselves change in unpredictable ways.  Bureaucracies collapse:  the largest predators in the food chain become extinct.  The best hope is to rise out of it and rise quickly and the smaller, nimbler, and more cunning can live to see brighter days.  There is no science to living in such circumstances.  But perhaps there is an art in it.  If the world does melt under the unlaboring stars, one should not despair of it. 

There will always be ways to support something good in this world.  And with all respect for wise words, there are new things under the sun.  There are always opportunities to bring something new and vibrant into this world in spite of surrounding gloom. 
Here is one example to consider.  A man carried coal during World War II.  During one night bombing attack, some 80,000 people where he lived were killed.  While his family was spared death, this fire-bombing destroyed his home.  His family effectively collapsed.  This man’s father was a successful lawyer before the rules changed on him.  But during the war he was injured and could not work anymore.  His father’s accumulated wealth evaporated during a sharp devaluation of the currency, by a factor of 100.  The family could not live on past savings and investments, and this young man nearly starved to death. Anyone with family or friends in the countryside was supposed to move there.   But this man had no relatives or friends in the countryside. 

There was an admirable resiliency in his society, in some sense enduring to this day.  Desperate, homeless young men and women formed close-knit groups led by their teachers.  These teachers held great honor and did more than impart knowledge of subjects.  They imparted knowledge of living, shared food and clothing, and gave encouragement.  This young man was lucky to have this teacher.  He was rather timid and not talkative at all, a bonchan, but his teacher always encouraged him and pushed him to learn.  The teacher imparted that learning was not a game at all.  It was something very serious that imparts what is genuinely wonderful onto the coldness of the world.  If there are such things as guardian angels, then the connection between this teacher and this student is an example of such divine work.  Perhaps it was simple inexplicable luck. 

During this time, life became harder and harder, but the young man went deeper and deeper into study as a response.  He describes this obsession for knowledge as similar to an alcoholic’s thirst.  After the war, he wanted to continue his studies and become a professor.  Finances and circumstances forced him to accept being an elementary school teacher instead.  But he never lost his thirst for knowing, reading Sugaku on his way to and from work in a country rapid being rebuilt from nearly absolute devastation.  He learned a spectrum of general topics like sheaves, algebras, and categories.  In his mind he came to see remarkable relationships between analysis, geometry, and algebra and he had a desire to unify them. 

He came across a problem that shocked the mathematical world of the 1950s:  there were linear partial differential equations with variable coefficients that had no solutions in the space of distributions, not even local ones!  He developed a solution to this problem and in the process created a framework to convert functional analysis into a coherent whole instead of scattered fragments united only by common techniques.  He saw that a manifold is the geometric analogue of an algebraic commutative ring.  In an amazing step, he saw that going to the non-commutative case led to a powerful treatment of partial differential equations.  These ideas were radical indeed.  Gradually the novelty and just plain weirdness of them wore off and some people began using these ideas in a garden variety kind of way.  Algebraic analysis still remains somewhat unexplored by the mainstream to this day, save the French.  The French above all others have an impeccable feeling for the truly profound. 

The man was Mikio Sato, and few living mathematicians exceed him.  What is most fascinating is the extent to which his world collapsed around him, and how swiftly it was rebuilt.  In less than a generation, equity markets were destroyed then booming again and personal wealth exploded upward.  Opportunity returned in spite of radiation, physical destruction, political and economic collapse.  So it was, so it will be. 

Japan’s rebuilding is more than a copy of its former state.  One can argue that the solar panels on virtually every roof and the integration of robotics and the virtual world intertwine with the time-honored tea ceremony in ways that front-run the rest of the world.  Mikio Sato was a part of this rebirth, enriching it, making the world more interesting and full of new vistas, simply by pursuing his own personal need to understand.

People’s needs transcend things.  There are always material needs like food, shelter, and clothing:  satisfying these alone makes one no better than an animal.  There are social needs that make some men rise to be little lower than angels and some men descend into nothing more than demons.  These are best understood as thirsts:  sometimes twisted into a thirst for dominance and power, sometimes is a simple longing for closeness and belonging.  But there is a thirst much nobler in man.  He creates ideas to nurture and cherish.  These rebuild and give something to all. 

“They can take land and money and all your things, but they can never steal what is in your mind.”  A friend told me these words.  They were told to a son from a father living in 1930s China to explain why all of a possible inheritance did not leave land or silver for an only son.  Instead his father poured the inheritance into a physics degree from Peking University.  He told his son those words, which he in turn passed on to his own daughter.  I passed them on to my sons.

I have no illusion of being extraordinary or that what I do changes the world:  I use mathematical methods, but I am no great mathematician.  What I do simply supports both the beauty and the ugliness in the world.  At my best, I can make the world better by my actions.  Anyone can.  Should new things under the sun realize the worst of men’s fears, should epic fail overtake me because I honor the time-honored, I shall be open and receptive.  I shall still support the world in ways that will never fail to unfold.     

 

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Fri, 08/26/2011 - 17:34 | 1605781 Long-John-Silver
Long-John-Silver's picture

Apocalypse Bitchez!

Fri, 08/26/2011 - 17:49 | 1605821 Transitory Disi...
Transitory Disinflation's picture

We have a black sock down

Fri, 08/26/2011 - 20:41 | 1606282 Crisismode
Crisismode's picture

This article is written by a mentally-deficient, mentally-masturbating, brain-dead idiot.

 

Oh, and did I say it was worth reading?

 

Umm.

 

Nope.

Fri, 08/26/2011 - 21:39 | 1606390 spiral_eyes
spiral_eyes's picture

Did Warren Buffett just join the House of Rothschild?

http://azizonomics.com/2011/08/26/warren-buffett-credit-anstalt/

Sat, 08/27/2011 - 08:42 | 1607050 DeeDeeTwo
DeeDeeTwo's picture

 

How is crapola like this making it onto ZH?

Why does every random hack think they are Hemingway?

Sat, 08/27/2011 - 09:18 | 1607074 Conor
Conor's picture

Actually, I found the article to be inspiring.

And in the times of apocalypse, those without belief in a Savior will have nowhere to go with their unrelenting loneliness and despair.

 

Sat, 08/27/2011 - 07:56 | 1607006 thewhitelion
thewhitelion's picture

"Black sock down?"

Not really sure what this means, but DAMN, I wish I had said it!

Sun, 08/28/2011 - 10:34 | 1609243 Transitory Disi...
Transitory Disinflation's picture

The post I replied to mentioned Apocolypse Now... it reminded me of the film Black hawk down but then I remembered "socky" the sock puppet version.... http://forums.weebls-stuff.com/picture.php?s=7be8af30b27c406017e59e4fead...

 

Socky has made it into a few films:

 

Socky Balboa

Black Sock Down

Asockolypse Now

Socktopussy

More here http://forums.weebls-stuff.com/album.php?s=7be8af30b27c406017e59e4fead38...

Fri, 08/26/2011 - 18:28 | 1605940 Snidley Whipsnae
Snidley Whipsnae's picture

"The only unshakable faith should be in one’s capacity to foster a world worthy of wonderful and useful ideas,"

...and, we are going to eat the ideas and they will sustain us?

...Sounds like another crusader in a quest to change human nature.

Good luck with that one!

To the author of this article: Keep stacking while you are crusading!

Fri, 08/26/2011 - 19:03 | 1606043 jm
jm's picture

The article has nothing to do with changing human nuature.  It is about man's amazing ability to do pretty good with the hands he is dealt. 

Sat, 08/27/2011 - 04:48 | 1606924 Snidley Whipsnae
Snidley Whipsnae's picture

" It is about man's amazing ability to do pretty good with the hands he is dealt."

I beg to differ... We were delt the most perfect world in the universe that we yet know of... It contained everything needed by all it's inhabitants... It was the 'perfect hand'...

...and, we have turned it into 'the tragedy of the commons'...

In order for humans to avoid turning a perfect world into a 'tragedy of the commons', human nature would definitely have to be changed.

Spin it as you will, jm, the facts are there for all to see...

Sat, 08/27/2011 - 19:16 | 1608363 TheFourthStooge-ing
TheFourthStooge-ing's picture

The perspicacious mind will endeavor to cultivate a succinct style of locution. The capacity for taking complex ideation and distilling it down to its essence can engender thoughtful reflection, whereas excessively loquacious verbiage could be misconstrued as nothing more than persiflage.

 

Fri, 08/26/2011 - 19:51 | 1606176 Azannoth
Azannoth's picture

Too bad most people on ZH lack the intelect necessary to grasp and appreciate you post, oh well

Fri, 08/26/2011 - 21:47 | 1606407 mick_richfield
mick_richfield's picture

I guess I also lack the intellect to appreciate your bad spelling, grammar, and punctuation.  But hey, that's just me.  I'm sure your comment is a lot smarter than it looks.

Did you know there's a spell-check button, little Azannoth?

TD -- could we talk about the, um, captchas?  Maybe turn them up to 11?

 

 

Fri, 08/26/2011 - 17:46 | 1605812 Pay Day Today
Pay Day Today's picture

A compassion for, and interest in, all mankind.

Having said that, the 1950's was a pretty good time to build an industrial economy from wartorn scratch. Energy and materials were plentiful and were supplied to Japan in bulk by friends.

Any new rebuilding now - would need to be a different, less energy intensive future.

Fri, 08/26/2011 - 18:35 | 1605968 Long-John-Silver
Long-John-Silver's picture

Industry in America has been outlawed by the EPA, FDA, and the Justice Department.

Fri, 08/26/2011 - 19:16 | 1606073 nmewn
nmewn's picture

"and the Justice Department."

Yeppers. They have now gone after Gibson guitars, citing Indian Law.

Interview (complete with Air Force One flyovers and inane reporter questions) follows... 

http://www.youtube.com/watch?v=H5No0Sk9NIo&feature=player_embedded

Fri, 08/26/2011 - 19:25 | 1606100 caerus
caerus's picture

WTF they went after gibson?!?! this aggression will not stand man...

Fri, 08/26/2011 - 19:32 | 1606115 nmewn
nmewn's picture

They have been after them since 2009.

They raided them and stole/seized a half a million bucks worth of property...in their customary black ninja attire of course. 

 

Fri, 08/26/2011 - 19:52 | 1606177 caerus
caerus's picture

bullshit dude...what's next prs?

Fri, 08/26/2011 - 22:11 | 1606456 caerus
caerus's picture

who's gonna make the guitars?!

Fri, 08/26/2011 - 22:40 | 1606489 nmewn
nmewn's picture

SEIU, of course.

Sat, 08/27/2011 - 11:38 | 1607313 NoClueSneaker
NoClueSneaker's picture

http://www.destroyallguitars.com/

Golden Age - check gil yaron ...

Fri, 08/26/2011 - 19:35 | 1606122 Pay Day Today
Pay Day Today's picture

As long as you guys don't forget that it was a few tens of thousand American citizens on corporate boards who made the decisions to move thousands of US factories to China.

They, and their shareholders profited massively from the downsizing of American industry.

Fri, 08/26/2011 - 19:59 | 1606193 nmewn
nmewn's picture

"They, and their shareholders profited massively from the downsizing of American industry."

You've piqued my curiousity.

What type of American industry are you in favor of having returned here? And how do you propose to lure it back?

Fri, 08/26/2011 - 21:20 | 1606353 JohnG
JohnG's picture

Large scale marijuana farming.  And opium (as opposed to hopium).  Why should the Afghani's and CIA have it all??  Hell, we pay for the CIA.

And coca farms.  Big ones.

Decriminization bitches!

Fri, 08/26/2011 - 21:46 | 1606403 NuckingFuts
NuckingFuts's picture

Why not supply locally what there is a demand for. To me it seems basic economics. But there are those who think it's wrong. Well I think corporate rape and pillage is wrong.... Why not make that shit illegal?

+1 why should the CIA have all the fun?

Fri, 08/26/2011 - 20:15 | 1606224 Hobbleknee
Hobbleknee's picture

Because the government made it too expensive to do business in America.

Sat, 08/27/2011 - 02:54 | 1606856 Mentaliusanything
Mentaliusanything's picture

Your looking at another reason why America is drowning. Raiding Gibson what next ,Harley - Davidson for excessive Noise pollution or unsafe glare from the chrome....

Endangered Wood my ASS - your being anally inserted and begging for more from limp wristed Girly boys.

America tear this wall down

Sat, 08/27/2011 - 08:00 | 1607011 nmewn
nmewn's picture

"Your looking at another reason why America is drowning. Raiding Gibson what next ,Harley - Davidson for excessive Noise pollution or unsafe glare from the chrome....

Endangered Wood my ASS - your being anally inserted and begging for more from limp wristed Girly boys."

Exactly.

First they came for the poor who drive clunkers. And I did not speak out for clunker drivers because I did not drive one. Then they came for Cap'n Crunch. And I did not speak out for Cap'n Crunch because I did not eat it. Then they came for our lightbulbs. And I did not speak out because I use flourescent. Then they came for my doctor. And there was no one left unmolested to speak up for him or me.

Its the Crabs in a Bucket Syndrome.

A place populated by a crab-like people living in the depths of a bucket. They will only reach out when one of the other crabs takes hold of the lip of the bucket to escape. They will always, instinctively, grab him and pull him back down into the seething mass that is their world.

Sat, 08/27/2011 - 12:13 | 1607401 I did it by Occident
I did it by Occident's picture

they can take my guitar wheny they pry it from my cold, dead hands!

Jeez, these laws are getting ridiculous, er, wait too late...

Fri, 08/26/2011 - 17:46 | 1605813 Nate H
Nate H's picture

"“They can take land and money and all your things, but they can never steal what is in your mind.” "

 

Wise words. All financial capital -stocks, bonds, even cash and gold - are markers for real wealth: natural capital (trees, oil, water), built capital (tractors, houses, spoons, backpacks), social capital (friends, family, networks), and human capital (health, knowledge, skills etc.) Gold and silver are a bit closer to natural capital than paper is, but markers nonetheless.

Fri, 08/26/2011 - 17:52 | 1605830 blingblingbert
blingblingbert's picture

You can have all the gold in the world but if you can't share time with family and freinds the wealth is worthless.

Fri, 08/26/2011 - 21:02 | 1606316 JohnG
Fri, 08/26/2011 - 18:06 | 1605873 A Lunatic
A Lunatic's picture

I'm pretty damned certain that a .357 mag will steal whatever treasures you have secreted away in that mind of yours.

Fri, 08/26/2011 - 20:03 | 1606205 LowProfile
LowProfile's picture

My SAIGA semi-auto 12GA trumps your pissant .357.

Make my day, cunt.

Fri, 08/26/2011 - 20:21 | 1606236 Rodent Freikorps
Rodent Freikorps's picture

I just need a better power source and I can go into production with my man-portable, flechette firing rail gun.

 

Fri, 08/26/2011 - 21:13 | 1606339 JohnG
JohnG's picture

Guess you'll have to wait for jm's fusion then.  Prolly be a while.  Like never.

Sat, 08/27/2011 - 17:07 | 1608075 Rodent Freikorps
Rodent Freikorps's picture

Until then, it just won't be man portable.

Kind of like the powered armor....

Fri, 08/26/2011 - 21:49 | 1606411 mick_richfield
mick_richfield's picture

Bah.  7mm Remington magnum, bolt action.  One shot.

Fri, 08/26/2011 - 22:02 | 1606434 JohnG
JohnG's picture

When used properly, the .44 Automag will remove the fingerprints - Dirty Harry

Sat, 08/27/2011 - 19:01 | 1608330 TheFourthStooge-ing
TheFourthStooge-ing's picture

When used properly, the .44 Automag will remove the fingerprints - Dirty Harry

Good luck finding ammo and (especially) magazines. You might as well be using a Gyrojet.

http://en.wikipedia.org/wiki/Gyrojet

 

Fri, 08/26/2011 - 22:53 | 1606508 toady
toady's picture

I'm not sure about the stealing part.

Eliminate, sure, I believe that.

Fri, 08/26/2011 - 18:20 | 1605915 reader2010
reader2010's picture

Jews learned their hard lessons in Nazi Germany. After all, real wealth happens to be portable/marketable knowledge. 

Fri, 08/26/2011 - 18:42 | 1605985 Moe Howard
Moe Howard's picture

They sure are accumulating an awful lot of worldly goods for having learned a lesson. Can you point out where they are not? I see the opposite. I knew Jews who paid more to park their car for a month than my rent for a year, big cars, furs, gold, you name it. What was that lesson again?

Fri, 08/26/2011 - 21:27 | 1606365 Dr. Acula
Dr. Acula's picture

Two of my favorite people were Jews: Ludwig von Mises and Murray Rothbard.

Neither lived extravagantly AFAIK.

 

Fri, 08/26/2011 - 21:35 | 1606381 caerus
caerus's picture

good men

Fri, 08/26/2011 - 21:46 | 1606401 reader2010
reader2010's picture

Leaders like Hilter or Stalin, for instance, can take away your factories, farms, and property. But, they cannot take away portable knowledge in your head as long as they don't kill you.  Sergey Brin, a Russian Jew came to this country at age of six. He built up his specialized knowledge in math and computer science through his schoolings here in this country. The next thing we know is that he started Google, and has become one of the wealthiest guys in the world.  Precious metals, investment-grade diamonds, and rare fine art paintings will preserve money's purchasing power. However,  real wealth comes from portable knowledge.  

Fri, 08/26/2011 - 17:48 | 1605815 tekhneek
tekhneek's picture

blah blah blah BUY GOLD AND SILVER.

Fri, 08/26/2011 - 17:50 | 1605822 Transitory Disi...
Transitory Disinflation's picture

You can't learn gold

Fri, 08/26/2011 - 18:37 | 1605976 Long-John-Silver
Long-John-Silver's picture

But you can learn how to acquire it.

Fri, 08/26/2011 - 17:49 | 1605820 Mongrel
Mongrel's picture

The apolitical blues are the meanest blues of all . . .--Lowell George

Fri, 08/26/2011 - 18:11 | 1605888 Ponzi Unit
Ponzi Unit's picture

He was the best.

Fri, 08/26/2011 - 17:56 | 1605838 zerohandle
zerohandle's picture

honorary bitchez post

Fri, 08/26/2011 - 17:56 | 1605839 zerohandle
zerohandle's picture

dup - trigger happy bitchez!

Fri, 08/26/2011 - 17:56 | 1605842 DonutBoy
DonutBoy's picture

Dude - lay off the bong.  it's messing with you.

Fri, 08/26/2011 - 18:05 | 1605867 caerus
caerus's picture

seriously...give it here...

Fri, 08/26/2011 - 20:40 | 1606281 JohnG
JohnG's picture

You got the bong, I got the green hydro KIND!

Fri, 08/26/2011 - 18:23 | 1605928 smore
smore's picture

Whereon the stars in secret influence comment:

 I'm all for the bong, but not for such a poor command of the english language.  Reading that hurt!

 

Fri, 08/26/2011 - 18:04 | 1605863 Fix It Again Timmy
Fix It Again Timmy's picture

Good words for troubled times...

Fri, 08/26/2011 - 18:07 | 1605877 CrashisOptimistic
CrashisOptimistic's picture

MORON.

If an unraveling occurs because of oil depletion THERE IS NO RESET AND DO IT BETTER NEXT TIME.

Why do posters not figure this out.  Optimism KILLS people.  They get content.  They decide, and ZHers should surely have their alarm signals go off when they realize this, they decide the government will take care of it.

Yes, oil is scarce and trucks can't bring food to your store shelves.  Yeah. the government is going to step in and fix that.  Just sit back and wait.  It will be okay.

Nobody wants to look at a far flung future with the direction down, but geology doesn't CARE what you want.  Without oil, 7 billion will not be fed.  Only a few hundred million will survive the calorie shortage AND the nuclear debris after the wars.

That few hundred million are not going start over and do it better.  They'll Have No Oil.

You and your kids are not likely to be one of those few hundred million.  Maybe you can adjust the odds.  Maybe not.

Fri, 08/26/2011 - 18:19 | 1605913 jm
jm's picture

One day mankind will master atomic fusion and this quantum leap will create its own "absolute at large" problems that will make peak oil look like a child crying over spilled milk.  But it is not for today or even soon, because necessity breeds invention, and we don't need it now.

Fri, 08/26/2011 - 18:25 | 1605932 CrashisOptimistic
CrashisOptimistic's picture

When we need it, we won't have academic symposia at which to discuss and develop theories, because no one will be able to travel even 100 miles to meetings.  And no, teleconferencing will die too.  The folks who keep things running will be out looking for food and "things" will stop running.

When we need it, we will have non farm payrolls of 20%, with 80% working on the farm, because that's required to have food.

Make no mistake about this, folks.  Technology came from oil.  Oil freed up hours for thinking.  Oil freed up people to do things other than grow food.  Oil does not come from technology.  Technology comes from oil.

And when oil is gone, technology will be gone too, when the last spare part in your local town breaks and you can't get any more because the factory workers that made them starved to death.

 

Fri, 08/26/2011 - 18:43 | 1605990 jm
jm's picture

The last comparable step was nuclear fission.  It was solved by synthesizing decades of existent chemical and physical research by the greatest dream-team of minds ever assembled for a concerted purpose with effectively unbounded funding.

It could come this way or it could be that so many different researchers are working on it that someone by luck gets outside of the prevailing paradigm and makes a breakthrough.

While what I am sayinhg isn't around just around the corner, neither is all the oil in the world vanishing.

 

 

Fri, 08/26/2011 - 19:19 | 1606087 Pay Day Today
Pay Day Today's picture

I'm with Crash on this. There won't be enough time or resources left to roll out commercial scale fusion plants globally even if a lab breakthrough is made tomorrow.

Remember we had working, stable fission plants 5 years after the first fission bomb.

50 years after the first hydrogen bomb...no stable fusion plants are to be seen anywhere. Not even a 1MW unit.

As for your comment implying that there is plenty of oil left in the world: yes there is. But it is oil that is so expensive it will continue to force a progressive and deteriorating collapse of western economies.

 

Fri, 08/26/2011 - 19:26 | 1606107 jm
jm's picture

I'm no expert on the subject.  You could well be right, and fusion is just a panacea that exists in my framework.  It could be something else like half the sahara desert will be covered with solar panels. Or a big solar dish in orbit that reflects focussed rays at an earth-bound generator.

 

You can probably see I'm just brainstorming.  But that is a part of it.

Fri, 08/26/2011 - 19:38 | 1606138 Pay Day Today
Pay Day Today's picture

I wish that desertec system was up and running now. It would make me feel a lot more confident about the future. Therein lies a demonstration of the resource/finance limited nature of the problem though. Which European gubbermints or corporations are going to invest in anything like that now that the whole EU is going broke.

Fri, 08/26/2011 - 20:37 | 1606258 Dr. Acula
Dr. Acula's picture

Guys, don't forget thorium reactors.

But note that all of this talk is idle. Because energy is cheap now, building the technology you guys are talking about is unwarranted and would likely result in financial losses. The technology will appear when entrepeneurs smell profit opportunities as signalled by rising energy futures. For now, there are more urgent consumer needs to satisfy - like producing iPads and TV shows like "Basketball Wives". (I'm not being sarcastic).

As always, the best course is to get government invtervention out of the way and let entrepeneurs do what it is they do best.

Sat, 08/27/2011 - 02:23 | 1606835 mkkby
mkkby's picture

Thorium and fusion are off topic.  They make electricity.  You don't fuel combines or make chemicals with electricity.  You make it with oil.  Oil cannot be replaced for many applications.  Sources of electricity only kick the can down the road.

All natural resources run out.  ALL OF THEM.  Peak oil, peak copper, aluminum, etc... must stop human growth eventually.

Some day if you want to build a 747, you'll have to send 1000 mexicans to the dump with a request for 10 million aluminum cans.  Maybe that's 100 years from now, but it's coming for sure.

Fri, 08/26/2011 - 21:31 | 1606362 TheAkashicRecord
TheAkashicRecord's picture

Would be nice if everyone came together and funded one of these bad boys

http://en.wikipedia.org/wiki/Dyson_sphere

Also, with regards to oil, as oil costs increase, won't non-renewables begin to make economic sense?  The UNSUBSIDIZED costs of alternative energy solutions make sense at what price of oil?  I think once that tipping point is reached (assuming we even make it that far), capital wil REALLY be pouring in from private sources and that should keep us online for quite some time.

On a related note, once we figure out how photosynthetic coherence works (biomimicry is the future), the efficiency of solar power will grow exponentially.

From Nature

"...direct evidence for remarkably long-lived electronic quantum coherence playing an important part in energy transfer processes within this system. The quantum coherence manifests itself in characteristic, directly observable quantum beating signals among the excitons within the Chlorobium tepidum FMO complex at 77 K. This wavelike characteristic of the energy transfer within the photosynthetic complex can explain its extreme efficiency, in that it allows the complexes to sample vast areas of phase space to find the most efficient path."

Nature is the ultimate engineer, we just have to figure it all out.   

Fri, 08/26/2011 - 22:00 | 1606430 Calmyourself
Calmyourself's picture

I like me some doom as well but perhaps a qualllude should be in your future.  We have a ways to go to oil depletion or even a peak that makes a serious dent in the western lifestyle.  Much less the complete lack of transport for nuclear scientists to go 100 miles. Yes, the Chinese and others will not benefit from such a rapid rise in lifestyle as a result of stresses in the supply chain.  Oh well, should have had a 22nd century Armed forces prior to us. 

Major stresses could be taken off the petroleum bandwagon if we for example embraced thorium and pebble bed reactor designs.  Take it easy Francis..

Fri, 08/26/2011 - 22:19 | 1606461 CrashisOptimistic
CrashisOptimistic's picture

This guy is at least self aware enough to know that what he's doing is betting on a miracle, but he's phrasing it in a way that seems more intellecutally palatable.

If not fusion, then  . . . something else, and I'll avoid being too very derisive here, but it's blind embracing of normalcy bias.  "We'll find something.  We always have."   That's just betting on a miracle.  And we always have not.  There have never been 7 billion mouths to feed before, and there have been monumental starvation die offs before.  Do a wiki on famines sometime and read how Russia lost 1/3 its population in 1600-1603, and Estonia 1/2 its population in the same time frame.  Technological miracles didn't save them.  The weather just improved.

There isn't going to be a weather change that adds oil to the planet.

And as for there being plenty left and it won't run out right away . . . it doesn't have to.  The day a Nigerian tanker enroute to the US is intercepted by a Chinese frigate, without using force, and is merely offered a higher price to go to Shanghai instead . . . when that story hits the media you have about 1 year before nukes start flying.

 

 

Sat, 08/27/2011 - 13:36 | 1607571 DosZap
DosZap's picture

  CrashisOptimistic  , @ 18:25,

I grow weary of folks screaming PEAK OIL.

Peak Oil, Yes............if you do not allow Exploration.

We are not.

There is far more undiscovered reserves worldwide than are EVEN imaginable. Wait and see, if you live a full life you will never see a REAL PEAK OIL time.

Peak oil will come to fruition for those that WANT it. There are people in the Demonic /Satanic Cabal, that think there should be no more than 2 Billion people on this planet, and want everything to go BACK WARDS a few hundred years.

They want their idea of a Utopia, and THEY(since they are the materially/fiscally most affluent,and powerful), of course will be spared this..........so that they, and their groups, can have it all.

Unfortunately for them, this will never happen, ever.

And, yes, even if Peak oil does come at SOME point,there will be an alternative for it.

Life will go on, as long as time is intended to go on.

You cannot leave out the religious in an article like this, WE are all subject to a Higher Power, (whatever you choose to call it),and a day of reckoning is coming.

Personally I see this play winding up, and we are running out of TIME, not natural resources.

Many will be over joyed, many more will be eternally destroyed.

Figure out what camp you want to be in, it's YOUR choice.

That's what FREEWILL is all about.

 

Fri, 08/26/2011 - 20:43 | 1606284 JohnG
JohnG's picture

"One day mankind will master atomic fusion and this quantum leap....."

 

Uhhhhhhhh, no.  And Quantum Leap was a TV show.

Fri, 08/26/2011 - 18:59 | 1606032 Dr. Acula
Dr. Acula's picture

>If an unraveling occurs because of oil depletion THERE IS NO RESET AND DO IT BETTER NEXT TIME.

I see where you've gone horribly wrong: there is no oil depletion.

Oil is no more expensive now than it was 60 years ago - when measured in real money (gold).

Oil only seems expensive when it's measured in clownbux.

Fri, 08/26/2011 - 19:24 | 1606097 Pay Day Today
Pay Day Today's picture

So when gold was $750 not that long ago, there was oil depletion then?

The measure you should really look at is net oil available for export per capita. And from that perspective we're already well on the Hubbert downslope to being fucked.

Fri, 08/26/2011 - 19:40 | 1606145 argentinian ser...
argentinian serial defaulter's picture

there is no way to fool mother nature.7 billion is too much.oil or not oil,many will die.dont worry about money,just learn to grow your own food and get your water.go far from cities and you ll be ok

Fri, 08/26/2011 - 18:09 | 1605879 SumSUN
SumSUN's picture

Wow.  Great read.

There will indeed be enormous opportunity for the prepared, intellectual, and open minded.

Fri, 08/26/2011 - 18:11 | 1605891 SumSUN
SumSUN's picture

So we can rebuild and burn it down again.

Fri, 08/26/2011 - 18:22 | 1605918 mcguire
mcguire's picture

"avoiding religious matters".. i disagree.  if you are awake, you will find that religious matters are at the center of events in these chaotic and troubling times.  the luciferian plot is real.  

Fri, 08/26/2011 - 20:50 | 1606296 Stax Edwards
Stax Edwards's picture

Religious matters fall into the bread and circuses category and are an unfortunate neccessity to keep the less intellectual from eating one another.  This article is in regards to the shepards among us.  The current batch have been corrupted and the flock is without appropriate guidance.  Look around.

Solid essay IMO.

Fri, 08/26/2011 - 18:23 | 1605927 oldman
oldman's picture

Thanks JM

This type of article is the reason I signed on at ZH.  Thoughtful and inspiring even to an oldman

Fri, 08/26/2011 - 18:29 | 1605934 Dr. Acula
Dr. Acula's picture

I don't get it.

I subjectively value mathematical knowledge, but abstract mathematical formulas have no exchange value: because they can be reproduced cheaply they are not scarce resources or economic goods.

You might as well adopt some other hobby, like bird watching or poetry.

Fri, 08/26/2011 - 18:30 | 1605949 jm
jm's picture

It's just an example of a man in solitary pursuit of understanding can find something truly original and profound.  If you want, you can find examples in other fields.  However, I would rather you not.

Algebraic geormetry will probably unlock rigorous closed-form solutions to nonlienar diff equations.  Don't tell there is no use in that!

It took 50 years for Einstein to apply Riemann's wonders.  Algebraic analysis is still very new.

Fri, 08/26/2011 - 18:38 | 1605975 Dr. Acula
Dr. Acula's picture

>It took 50 years for Einstein to apply Riemann's wonders.  Algebraic analysis is still very new.

I agree with your sentiment. And I would love to learn more about it if only to perceive its beauty.

But mathematics doesn't seem like the best skill for an area desolated by war or other catastrophe. A construction worker would be more useful and would likely obtain a higher price for his labors.

That's why I'm so confused by this article.

Fri, 08/26/2011 - 18:43 | 1605989 caerus
caerus's picture

neither war nor construction nor catastrophe would be possible without mathematics

Fri, 08/26/2011 - 18:49 | 1606001 Dr. Acula
Dr. Acula's picture

If you expect an economic disaster, then don't just hoard things - hoard friendships, practical knowledge, and marketable skills.

But algebraic analysis will not avail in the age we are in. That's where this article went wrong.

 

Fri, 08/26/2011 - 18:55 | 1606014 caerus
caerus's picture

true...but i would respectfully disagree with you about the usefulness of mathematics in this or any age...mathematics is the language of the universe...it is something we discover, not create...it seems that there are always "pure" mathematicians who wish to create something without "practical" application...i am of the opinion that since we (and our minds in particular) are part of the universe that we observe...it would be impossible for us to create anything outside of everything that is...one of my favorite examples is imaginary numbers and schrodinger's equation...

Fri, 08/26/2011 - 19:14 | 1606071 Dr. Acula
Dr. Acula's picture

 >mathematics is the language of the universe...it is something we discover, not create...

A metaphysical dogma which cannot be proved or disproved.

>it would be impossible for us to create anything outside of everything that is...one of my favorite examples is imaginary numbers and schrodinger's equation...

Humans created irrational numbers. Yet no scientist has ever obtained a measurement that is an irrational number. There's no evidence such numbers exist outside the mind of man.

 

Fri, 08/26/2011 - 19:27 | 1606105 Pay Day Today
Pay Day Today's picture

"There's no evidence such numbers exist outside the mind of man."

Are you serious? I only ask because in the final analysis, there's no evidence that anything exists outside the mind of man.

Fri, 08/26/2011 - 19:38 | 1606137 Dr. Acula
Dr. Acula's picture

It's sounds like you not only endorse my opinion - that there's no proof that irrational numbers exist outside the mind of man, but you take it even further.

 

Fri, 08/26/2011 - 19:39 | 1606143 Pay Day Today
Pay Day Today's picture
touché :)
Fri, 08/26/2011 - 22:04 | 1606437 TheAkashicRecord
TheAkashicRecord's picture

Why then are you communicating to other minds if there is no evidence that we exist?  You may as well as be talking to God.

Sat, 08/27/2011 - 20:08 | 1608440 quartshort
quartshort's picture

"When the going gets weird, the weird turn pro."

HST

Fri, 08/26/2011 - 19:34 | 1606123 caerus
caerus's picture

i would argue that it is (today) exactly the opposite of metaphysical dogma...

if you have ever tried to measure the ratio of a circle's circumference to its diameter then you have discovered an irrational number (pi)

if you have ever studied biological growth or compound interest, then you have discovered an irrational number (e)

if you have ever studied isoceles right triangles, then you have discovered an irrational number (sqrt(2))

there are other examples (cantor)

 

Fri, 08/26/2011 - 19:54 | 1606154 Dr. Acula
Dr. Acula's picture

>if you have ever tried to measure the ratio of a circle's circumference to its diameter then you have discovered an irrational number (pi)

No. If I use a ruler I can perhaps measure 3.2, or 3.15, but not 3.141592653589 and certainly never Pi itself.

And if I'm near a massive body, where geometry is non-Euclidean, then it won't be Pi even in theory. If in empty space, then I must contend with the cosmological constant.

And I've never seen or held a true circle - only smeary ensembles of wave-particles approximating thin cylinders.

Pi exists in my mind, and in yours; of that we can be sure. To go further is to assert metaphysical dogma that can't be proven or disproven.

 

Fri, 08/26/2011 - 20:01 | 1606194 caerus
caerus's picture

No. If I use a ruler I can perhaps measure 3.2, or 3.15, but not 3.141592653589 and certainly never Pi itself.

these are limitations of the flesh, not of mathematics

And if I'm near a massive body, where geometry is non-Euclidean, then it won't be Pi even in theory. If in empty space, then I must contend with the cosmological constant.

sorry, but although i agree with you in part...these concepts would be impossible without irrational numbers...also einstein was wrong about the cosmological constant

Pi exists in my mind, and in yours; of that we can be sure. To go further is metaphysical dogma that can't be proven or disproven.

well at least you admit it exists...that's a start...

glad you're interested...you sound like a mathematician actually...

Fri, 08/26/2011 - 20:46 | 1606290 WonderDawg
WonderDawg's picture

I've rather enjoyed this intellectual exchange. Nice job presenting your sides without vitriol and rancor. A pleasant change of pace.

Fri, 08/26/2011 - 21:30 | 1606371 JohnG
JohnG's picture

Mmmmmmmmmmm, pi exists in my fridge.  Pecan.

Pi r round.  Cornbread r square.

Think I'll have some pi now :)

Fri, 08/26/2011 - 19:40 | 1606139 akak
akak's picture

Humans created irrational numbers. Yet no scientist has ever obtained a measurement that is an irrational number. There's no evidence such numbers exist outside the mind of man.

And, of course, outside of BLS economic statistics, most or all of which are exceedingly irrational.

Fri, 08/26/2011 - 20:44 | 1606286 WonderDawg
WonderDawg's picture

Excellent! Props to you, akak.

Fri, 08/26/2011 - 18:49 | 1606008 jm
jm's picture

I just have an interest in math. 

Maybe I could use it to be a teacher and foster some future Sato or Hironaka. 

If I were young and full of vinegar, I could go where there is more opportunity, teach English while I learn Chinese, then set up shop in Shanghai writing in some object-oriented language.

 

 

Fri, 08/26/2011 - 21:03 | 1606320 lewy14
lewy14's picture

jm, make that functional-obect-oriented:

scala> List('P', 'I', 'I', 'G', 'S', 'B').permutations.toList map (_.mkString) foreach println

Beautiful post.

Fri, 08/26/2011 - 20:49 | 1606293 JohnG
JohnG's picture

Certainly, as a mathematician, you've studied this old tome:

http://books.google.com/books?id=yDCfhIjka-8C&dq=isbn:012417650X&ei=gD5Y...

 

Fri, 08/26/2011 - 21:08 | 1606325 jm
jm's picture

I have such a good quote from Kempf's book Algebraic Varieties:

"Algebraic geometry is a mixture of the ideas of two Mediterranean cultures.  It is the superposition of the Arab science of the lightening calculation of solution of equations over the Greek art of position and shape.  This tapestry was originally woven on European soil and is still being refined under the influence of international fashion.  Algebraic geometry studies the delicate balance between the geometrically plausible and the algebraically possible."

 

 

Fri, 08/26/2011 - 21:44 | 1606399 JohnG
JohnG's picture

And here I was thinking you wrote that algebraic geometry was new.....when it was the Arabs that started it all.  Greeks refined it, Descartes proved it.  Some European wrote it on the ground???

Would you like some pi?

 

 

(yes, 'm fucking with you on purpose because I'm bored, drunk, stoned, and naked!!!)

 

But seriously, Irene has gifted me with a GREAT business idea, and I'm mostly obsessing over that with extra clock cycles here.

I like dogs.

 

:p                :)

Fri, 08/26/2011 - 18:33 | 1605960 SumSUN
SumSUN's picture

Math is my favourite colour.

Fri, 08/26/2011 - 18:36 | 1605970 Snidley Whipsnae
Snidley Whipsnae's picture

"I don't get it."

It's all blather in search of changing human nature... A noble attempt but doomed to failure...

We get one of these sermons every so often. Sort of like going to church/mass/temple and coming away with feel good feeling... Which fades in a few minutes once one is negotiating traffic and in fear for life and limb...

Humor him/her... (the author, that is)

Fri, 08/26/2011 - 18:43 | 1605991 Moe Howard
Moe Howard's picture

Rate the article:

I rate it a total waste of time.

Fri, 08/26/2011 - 19:04 | 1606046 Bartanist
Bartanist's picture

“They can take land and money and all your things, but they can never steal what is in your mind.” 

I suppose it depends on who the "they" are, eh? It is possible, neh likely that our minds are open to some ... why do we sleep, father?

Fri, 08/26/2011 - 19:21 | 1606088 Use of Weapons
Use of Weapons's picture

Jm, the major issue you've not addressed in this piece is obvious:

 

Are you a proponent of the 'clash of civilisation / ID / stress patterning'  producing greatness [add to the global / national / local / personal levels as you wish]?

 

Because, otherwise, you're telling a depressing tale - Miko would have done his best work 30 years earlier, and this could have cascaded all across the geniuses of WWII [rockets, radar, flight engines, nukes, bioweapons (OH WAIT) and so on]. If your argument is that conflict, and stress within conflicts produces results, then we'll argue.

 

If it is merely "humanity wins through", then all we have is: fucking hell, look at all the geniuses we've murdered. WWI - numerous poets, scientists, you name it. Multiply by a billion over the 20th Century. Kill all these waste of spaces before they stop the advancement of the human race *again* through conflict. And by this - I mean the people running the wars.

 

 

See the issue?

Fri, 08/26/2011 - 19:58 | 1606188 jm
jm's picture

I see it, but my point is of a more local nature.  My mind can't see through all the working parts of the global, civilzational problem you spoke of.  It is very true that we can't esacpe the actions of others.  Just is just another type of correlation risk.

I believe this:  no winds of change can blow the technological genii back in the bottle.  Because of this, recovery comes quicker than ever before.  I don't see any stone age in our future, rather an altered course in history that may imply slower advance.  At the same time, tech does make human outcomes more prone to existential risks.

Like a Fukushima happening in places across the globe in every few years, killing all life.  We can't seem to escape that our works often have an uneconomical, limited upside and just horrific downside.  Radiation therapy saving some future Beethoven only to die in a future atomic war.  A lot of things we do are like that to some degree.  Technology does have a tendency to make obsolete past problems like starvation and cold and heat and sickness and ignorance.

If the downside risks win out and we all pass into the dust, then I will be wrong about having fainth in myself and fellows. 

Fri, 08/26/2011 - 20:24 | 1606246 Use of Weapons
Use of Weapons's picture

Thank you for the reply, I understand your position a bit better now - and I have to propose a (rather depressing) counter point.

Are you familiar with the 'crisis aversion through technology exponential decline through time' theory? i.e. In the last 100 years, we have staved off collapse through technology, however (and this is the rub), each technological leap has produced a linear decline in temporal gains? Our economy through energy injection has both sped up our temporal benefits [i.e. in 1890, people thought that going 30 mph in a train was super dangerous, but now we cross the globe in milliseconds] but has resulted in a shortening of temporal distance between crises.

Bluntly put: each time we (humanity) solve a crisis, the solution lasts a shorter time. This isn't a silly conspiracy theory, there's multiple serious papers on it.

The real issue being discussed at the 'adult's table' (are we allowed to even allude to this?) is that the modern means of production, and technology, will not reach a practical level before this collapse.

 

This is what I am engaging with. And probably end up being jacuzzi'd for. Remember - 1960's, our future was golden. 2011 - no-one is even advertising the future, which is depressing.

Fri, 08/26/2011 - 20:57 | 1606302 Dr. Acula
Dr. Acula's picture

>Bluntly put: each time we (humanity) solve a crisis, the solution lasts a shorter time. This isn't a silly conspiracy theory, there's multiple serious papers on it.

This seems to depend entirely on what is defined as a "crisis". It sounds absurd.

>technology, will not reach a practical level before this collapse.

I don't know what you're talking about exactly, but supose "this collapse" is about to occur. Is there is a better solution for averting it or managing it than a system of property rights and peaceful, freely acting people? Or would it help to declare you totalitarian overlord of the world, in order to deal with it?

>Remember - 1960's, our future was golden. 2011 - no-one is even advertising the future

Surely more fiat printing and government interventions will cure this mysterious affliction.

 

Sun, 08/28/2011 - 16:44 | 1609898 Use of Weapons
Use of Weapons's picture

Specifically it is modeled on food production - since the green revolution, it is modeled on oil production, since agrochemicals / fertilisers are largely petro-chemical based now.

 

 

And by modeled and temporal crisis, we're looking at a time span of about 6000 years. I understand people often have issues with scales, but that's how you model correctly.

Sat, 08/27/2011 - 08:48 | 1607060 jm
jm's picture

What you are saying is very true:  nothing in nature is unbounded and ultimately it is finite.  This means downsizing at some point.

This is a high probability outcome, but the timing that outcome (when it will happen) is completely unpredictable.  

This article is ultimately about what to do in the face of this unpredictability as it exists in finance.

 

 

Fri, 08/26/2011 - 19:26 | 1606104 James T. Kirk
James T. Kirk's picture

I'm not sure, but it sounds like this article was written by Jon Nadler while he was attempting to channel Ben Franklin.

Fri, 08/26/2011 - 19:29 | 1606110 jm
jm's picture

Ever sat down with your wife to watch some Jane Austin flick while trying to write something?  It wretchedly grows on you...

Fri, 08/26/2011 - 19:46 | 1606161 James T. Kirk
James T. Kirk's picture

That is just too weird. I watched Pride and Prejudice with my wife just 2 nights ago.

Fri, 08/26/2011 - 19:50 | 1606174 Use of Weapons
Use of Weapons's picture

Beware the female network - never see them in a battle do you?

 

[/snark - I'm well aware that civilian casualities within war, esp. rape are of a magnitude higher than combat deaths]

Fri, 08/26/2011 - 20:00 | 1606195 jm
jm's picture

The things we do for love.

Fri, 08/26/2011 - 19:44 | 1606156 Rodent Freikorps
Rodent Freikorps's picture

"The tree that does not bend with the wind will be broken by the wind"
- Mandarin Chinese proverb

Fri, 08/26/2011 - 21:46 | 1606370 Dr. Acula
Dr. Acula's picture

"When Chuck Norris breaks wind, it stays broken!"

- American proverb

Fri, 08/26/2011 - 21:56 | 1606422 JohnG
JohnG's picture

Oh no you did't start with Chuck Norris jokes!

 

What does chuck Norris have behind his little chin beard?  Another fist!

 

When Chuck Norris jumps into a pool, Chuck Norris does not get wet; the pool gets Chuck Norris'd!!!

 

I'll be here all week.

 

:)

Fri, 08/26/2011 - 23:05 | 1606543 Falcon15
Falcon15's picture

Chuck Norris does not do push ups, he merely shifts the planet away from himself temporarily.

A fear of spiders is called arachnophobia, a fear of tight places is called claustrophobia, a fear of Chuck Norris is called logic.

Fri, 08/26/2011 - 19:49 | 1606170 grid-b-gone
grid-b-gone's picture

JM, Nice description of the corporation as a living entity. Just as the body protects the core during hypothermia, the prudent business organization will take drastic steps to preserve critical functions during severe economic distress.

Surviving businesses have a restarting point of valuation that turns back time many years. This sure beats having to find a metals buyer when it becomes apparent to all that the economic coast is clear. If one buys anywhere near the bottom, measuring dividend yield against original purchase price is very satisfying after a couple years of recovery. 

If there happens to be a currency revaluation as a solution to the depression, holding fractional ownership of an array of quality, dividend-paying corporations should protect the owner from taking the full currency hit that holders of cash will. Cashing in PMs after such an event means locking in the full effect of any devaluation.  

Your points are one reason I only tentatively depend on precious metals to guard against fiat collapse.

Some PMs, some dividend-payers (bought in late stages of market collapse), a home (yes, some remote risk it would need to be abandonded if the situation gets really crazy), agricultural land with a livable structure, and some fiat cash unless a wheelbarrow is involved, food, water, and protection.

It looks absurd and silly to even make such a list, yet we see a dozen countries per year on the news that have fleeing populations. It would be total hubris to think there is absolutely zero chance of similar events in the top developed countries, especially when we have seen the types of protests that signal overflowing levels of stress in some of the most civilized and cultured modern states recently.

Fri, 08/26/2011 - 20:06 | 1606211 jm
jm's picture

Yup on all accounts.  This is about investing in financial markets, and a stock is an option on underlying asset performance.  A bond trades off of a cashflow based on balance sheet strength plus a recovery option.

Not everything in life is about investment in financial markets, and while I don't hink we are near to the point where such is irrelevant, people need to risk manage what they think the real tails are.  

Fri, 08/26/2011 - 21:20 | 1606354 Dr. Acula
Dr. Acula's picture

>This is about investing... a bond trades off of a cashflow based on balance sheet strength plus a recovery option.

Unless it's a government bond. That's not really investing, but rather it's entering into a contract to enslave unwilling third parties including the unborn. Government bonds are slavery futures.

 

Fri, 08/26/2011 - 19:50 | 1606173 huntergvl
huntergvl's picture

I liked this article. It reminds me that my wits, my knowledge....my smarts could one day be my best asset. On the other hand, the 20th century saw no less than 6 major genocides, a major war every generation for most on the planet and all that, resulted in hundreds of millions of dead people. I am sure a lot of those people were smart too.

It is good to be knowledgeable; it is good to be positive for the long term, especially where it concerns you and your family's survival. However, a healthy dose of pessimism, skepticism, and ruthlessness as needed might just be the qualities that allow your knowledge for the future to matter at all.

I am wary of optimism. I'm sure our coal carrying mathematician embraced life and the pursuit of knowledge and technological advance. It's too bad about the 80,000 killed in his old neighborhood. I'm sure there were at least a couple geniuses in that group.

Today, we have the internet, we have a global banking system interconnected to the tune of some $1.4 Quadrillion fantasy dollars. We have more people than we have resources by far, less water, less ariable land, less clean air, and no political will to 'fix' it. We have the most powerful weapons ever conceived, by the thousands, pointed at each other in a game of nuclear chicken. Sometimes there IS something new under the sun.

Survive first, then go ahead and spread knowledge and joy. And if the worst does come about which is just as likely as not, try not to get eaten.  

Fri, 08/26/2011 - 19:53 | 1606180 Use of Weapons
Use of Weapons's picture

20th C wracked up circa 1,000,000,000 [billion] deaths - sources can be provided if you want them.

The real issue is that serious policy makers are betting on 2-3 billion this century, and all within the next 10-30 years.

 

That's the real issue.

Fri, 08/26/2011 - 20:03 | 1606198 Dr. Acula
Dr. Acula's picture

>We have more people than we have resources by far

No. Drive through Canada or USA and you will see how terribly misguided you are.

"There is no need to dwell upon the paradoxes of this hypothesis and to discuss the problems of such a world. Our world is different. Labor is more scarce than material factors of production. We are not dealing at this point with the problem of optimum population. We are dealing only with the fact that there are material factors of production which remain unused because the labor required is needed for the satisfaction of more urgent needs. In our world there is no abundance, but a shortage of manpower, and there are unused material factors of production, i.e. land, mineral deposits, and even plants and equipment."

-Ludwig von Mises, Human Action

Fri, 08/26/2011 - 20:17 | 1606227 SumSUN
SumSUN's picture

I live in British Columbia.  Lived in Florida for three years, been around North Amercia.  If your looking for a place with a lot of water, trees, mountains, fertile soil, animals, empty land...  I would say B.C., Alaska and Yukon would be the best.  Actually, mainland U.S. and Russia have incredible amounts of unpopulated land as well.

Fri, 08/26/2011 - 20:20 | 1606234 Dr. Acula
Dr. Acula's picture

It's especially funny that the poster above was complaining that there was not enough water.

Because there are 326,000,000,000,000,000,000 gallons of water on planet Earth, or 46 billion gallons of water for each person.

Fri, 08/26/2011 - 22:10 | 1606452 Calmyourself
Calmyourself's picture

No, the space aliens steal it for Mars..   Son came home from school last year seriously brainwashed on the water scare..  I had just got done talking him down from the MMGW farce.. Anyone see the new CERN study concerning cloud formation as related to cosmic particles... Ha, Gore, burned again, GOD hates Al Gore....

Sat, 08/27/2011 - 09:42 | 1607135 huntergvl
huntergvl's picture

Yes...there is a lot of water on Planet Earth. It IS funny that you fail to distinguish between liquid H20 in all it's various forms. There is SALT water, there is water contaminated with chemicals, Heavy metals, and Bacteria, and of course fresh clean water.

I live in Alachua county Florida and just in the last 5 years, we have triumphed in litigation preventing Hillsborough County (Tampa), and Georgia counties all the way up to Atlanta, from coming in and SHARING our aquifer. Even fending off the water seekers, our county estimates we have a 20 year supply of fresh water left and then we will need to have an alternative to our aquifer in place to provide water for all of North Central Florida.

Tampa resolved their issue by building a HUGE water desalinization plant at huge cost which requires huge amounts of Electricity. As long as you have enough money, you can get plenty of clean fresh processed water. I don't know what Georgia is doing about their deficiency of clean water. They tried to raid Northern Florida just recently and Tallahassee beat them back.

Anyone who doesn't believe that clean fresh water is an issue needs to familiarize themselves with the current tension between India and China over the dwindling supply of water that has always been supplied by the Himalayas.

Yes there is water water everywhere, but the cost of turning polluted or salted water in fresh clean drinking water is exhorbitant and unfeasible in a world of 7 billion souls and counting. Unless your idea is that we should direct every energy resource in the world into just maintaining a water supply for 10 Billion people? Or we should all just MOVE to where the water IS? All 10 Billion of us clustered around a lake in the Yukon? I agree that as individuals, we can easily move to where the resources are plentiful and build a self sustaining life, but for the vast numbers of humans on the planet, this is not a defensible point of view.

If the death of billions has no consequence, then it is a valid idea. For example, the entire middle east is mostly desert. We simply move them all somewhere where clean fresh water is plentiful? Or since they have a completely documented inexhaustible supply of oil? they can continue to build hundreds of desalination plants everywhere and use all the EXTRA oil they have to turn salt water into something you can drink and not die. Maybe you don't believe in PEAK oil either.

There are NOT vast resources available to all. India has over a Billion people and the vast majority are destitue. I guess they could figure out that the Yukon has a lot of fresh water, arable land, and lush forests. Is India going to attack Canada with their nuclear weapons and huge military and move entire Indian provences to 'where the food IS?'

Your viewpoint that the world is awash with clean water, lush forests, and a land of plenty, stems from a narrow tunnel visioned view of the world. It is egocentric at best, blind at worst.

Sun, 08/28/2011 - 16:40 | 1609887 Use of Weapons
Use of Weapons's picture

You're correct about fresh water. Bets are on it being the #1 reason for MENA total war this century.

Fri, 08/26/2011 - 21:20 | 1606352 mick_richfield
mick_richfield's picture

Michigan's better than that.  We have all that stuff, and also a lot of empty cities.  It's really cool.

Fri, 08/26/2011 - 20:11 | 1606215 jm
jm's picture

I can only take the world as it is and I see more good than bad, but that is just me.

There are beautiful things and awful things, but I try to support the good and diminish the bad, though some may disagree.

Fri, 08/26/2011 - 19:57 | 1606190 stiler
stiler's picture

Man does not know on which level to put himself. He is obviously lost and has fallen from his true place without being able to find it again. He looks for it everywhere restlessly and unsuccessfully in impenetrable darkness.

Pascal,  Pensees

Fri, 08/26/2011 - 21:15 | 1606343 James T. Kirk
James T. Kirk's picture

Very well said, and much more literal than most believe.

Fri, 08/26/2011 - 20:18 | 1606229 Sow-puncher
Sow-puncher's picture

Oh poor world.

Fri, 08/26/2011 - 20:39 | 1606277 Joy on Maui
Joy on Maui's picture

Splendid read, thank you.

Fri, 08/26/2011 - 20:52 | 1606299 Arkadaba
Arkadaba's picture

It's Friday and was hoping for an open thread .....Probabaly going downtown to say good bye to Jack tomorrow - not always black and white in terms of the issues and some issues are being sold to you: 

http://www.youtube.com/watch?v=Sl0Mk1idNXg

And who would have thunk! Lou Dobbs and Jack Layton - getting along!

http://www.youtube.com/watch?v=N_MR7tL7tWs&feature=related

More Canadian:

http://www.youtube.com/watch?v=VGu682FUDsQ

Fri, 08/26/2011 - 21:01 | 1606315 Dr. Acula
Dr. Acula's picture

>Lou Dobbs

Is it just me, or is his skin tone offensive? I don't think he's indigenous to this continent.

 

Fri, 08/26/2011 - 21:14 | 1606340 TwelfthVulture
TwelfthVulture's picture

All I have to say is, if the apocalypse in NY doesn't happen as "scheduled,"  Bloomberg NEEDS TO GO!

Fri, 08/26/2011 - 21:16 | 1606344 jonjon831983
jonjon831983's picture

So, we get the Star Trek scenario - we need a global nuclear war (catastrophe) and whomever survives that will be so grateful and realize that war, conflict, greed are completely useless that they will focus to development of the mind and of knowledge.

First we will need to survive the warlords... opportunists... and cannibals...

But after that, we should be ok and the story of StarTrek is born.

Fri, 08/26/2011 - 21:16 | 1606349 mick_richfield
mick_richfield's picture

The only unshakable faith should be in one’s capacity to foster a world worthy of wonderful and useful ideas, avoiding religious matters.

Wow, I feel so ... uplifted now.

What the fuck just happened to me?  Did I stumble into the middle of some kind of bullshit group therapy session in the Zero Hedge basement?

Damn.  Let me see if there's anything here to read....

Fri, 08/26/2011 - 21:27 | 1606363 mick_richfield
mick_richfield's picture

At my best, I can make the world better by my actions.

Absolutely.  And I have a suggestion.  Stop posting at Zero Hedge, and start posting at HuffPo.  Thus improving the average quality of both sites.

Fri, 08/26/2011 - 22:51 | 1606503 JeffB
JeffB's picture

"The only unshakable faith should be in one’s capacity to foster a world worthy of wonderful and useful ideas, avoiding religious matters. It is here that the rules themselves change in unpredictable ways."

---

The presupposition that "wonderful and useful ideas" and "religious matters" are mutually exclusive is a fatal flaw in his reasoning. 

 

Sat, 08/27/2011 - 08:27 | 1607033 jm
jm's picture

I have no opposition to religion and transcendence in general.  I just don't want to initiate a fight about superiority/better/worse etc.

Do NOT follow this link or you will be banned from the site!