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Guest Post: When Risk Is Disconnected From Consequence, The System Itself Is At Risk
Submitted by Charles Hugh Smith from Of Two Minds
When Risk Is Disconnected From Consequence, the System Itself Is at Risk
If we understand risk cannot be eliminated, it can only be transferred, then we will understand why the current financial trickery in Europe and elsewhere is doomed to fail.
The entire global economy's fundamental financial instability can be traced back to one simple rule of Nature: risk cannot be eliminated, it can only be transferred to others or masked. And when it is transferred to others or masked, then the causal feedback between risk and consequence is severed.
Once risk has been disconnected from consequence, then it is impossible to discover the price of capital and risk. Once capital and risk have been mispriced, then the inevitable result is misallocation of capital and a positive feedback loop of self-referential, self-reinforcing risk.
Once the causal negative feedback of the real world--consequence--is no longer available to those taking on risk, then only positive feedback remains. Positive feedback inevitably leads to runaway reactions that self-destruct.
This can be illustrated by imagining yourself in a casino where a consortium will guarantee your losses up to $1 million. We call the disconnect of risk from the resulting gain/loss "moral hazard," and to understand the ramifications of moral hazard, we need only compare the actions of two gamblers in the casino: one is using his own money, the other has none of his own capital at risk, and his losses will be covered up to $1 million.
How much risk will you take on in gaming if you can lose $1 million without any loss to yourself? Obviously, we will accept enormous risks because if we win the high-risk bet, the gain will be ours to keep. Low-risk bets yield low returns but high-risk bets yield high returns.
If our losses will be transferred to others, then why waste time betting on low-risk, low-return "red" at the roulette wheel? Let's bet on single numbers because the payoff will be astronomical.
If we actually score a few high-risk "wins," this success feeds our risk appetite. This is a positive feedback loop: our wins reinforce our risk appetite, while negative feedback (the losses from losing bets) no longer register--they have been eliminated from our calculations of risk and gain.
This positive feedback eventually leads us to make stupendously large bets. Eventually, we bet $1 million on a high-risk play and lose. We are wiped out, but oh well, it was fun while it lasted. If we were especially disciplined and clever, we squirreled away some of our winnings in our own account: we kept the gain and the consortium took all the losses.
The risk didn't vanish, it was simply transferred to others who now bear the cost of the unfettered risk being played with abandon. The consortium who financed the no-risk gambling spree now has to absorb the $1 million in loss. If the consortium masked its own risk by presenting a phantom financial security to the casino, then the casino will have to absorb the loss.
In effect, the risk was transferred to the entire system. Since the consortium is made up of many investors, and the casino has many investors, then the risk and loss was effectively spread over many participants. The $1 million loss, catastrophic to any one player, is effectively distributed to everyone in the system.
When losses are trivial compared to the size of the system, then this distribution of transferred risk results in a modest loss to all participants.
But let's suppose the player with the $1 million backstop was extraordinarily successful with insanely high-risk bets, and he built the $1 million stake into $100 million, which he then rolled into several stupendous bets.
He loses, because the risk of gambling hasn't been elminated, it has only been masked and transferred to others. Now the consortium faces a loss 100 times its guaranteed backstop, and since its capital is only $10 million, it is also wiped out and leaves the casino with $90 million in uncollectible debt.
If the casino needs that $90 million to pay its own speculative debts, then it too will be wiped out.
This is how one player who manages to mask or transfer risk to others can bring down entire systems. The risk only appears trivial and manageable at the start, but since the negative feedback of consequence (reality) has been eliminated from the players' perspective, then risk piles up in a self-reinforcing positive feedback.
Since the system itself has disconnected risk from consequence with backstops, guarantees and illusory claims of financial security, then it is has lost the essential feedback required to adapt to changing circumstances. As the risk being transferred to the system rises geometrically, the system is incapable of recognizing, measuring or assessing the risk being transferred until it is so large it overwhelms the system in a massive collapse/default.
The consortium has only two ways to create the illusion of solvency when the punter's $100 million bet goes bad: borrow $100 million from credulous possessors of capital or counterfeit it on a printing press. These are precisely the strategies being pursued by central banks and states around the globe. BUt since risk remains disconnected from gain/loss, then capital and risk both remain completely mispriced.
Risk is being transferred to the entire global financial system at a fantastic rate, because counterfeiting money or borrowing it on this scale to cover losses creates new self-reinforcing feedbacks of risk.
As long as risk is being masked or transferred to others who don't reap the gain, they only reap the losses, then the system is doomed to self-reinforcing instability and eventual collapse.
The only solution is to enforce the causal connection between risk and consequence: those who took the risk have to absorb all the loss. Since risk cannot be eliminated, it can only be masked or transferred, then all the tricks that are being played out in Europe, China, Japan and the U.S. are only enabling risk to pile ever higher in the system itself.
At some unpredictable stick/slip point, the accumulated risk will cause the system to implode like a supernova star.
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The futures so bright, I've got to wear shades........
The world is diconnected from reality and we would really need some sort of restart.
I 100% agree with this article. America needs to make it RISKY for these damn immigrants to cross our borders by imposing tough penalties. They need to know that their actions have CONSEQUENCES. Multiculturalism has been allowed to thrive in America, and it has infected our culture and economy. It's time to get this country back on track. Vote Ron Paul in 2012!
Billions and billions and billions and POOF RIP Carl Sagan
Risk being transferred and masked. Billions and billions WILL go poof! At this point all I want is to SAVE what I have, and most of that is the best saving vehicle in town: Gold. "They say" that gold and other elements heavier than iron were created in supernovas... That gold came from the stars...
+ 1 re Carl Sagan.
That gold came from the stars...
Just like almost all the other elements. Our hydrogen comes from the Big Bang, if the theories are right.
Not that it matters where Gold comes from - as long as the fuckers can't print it, that's the main thing.
The f.ckers can't print real estate either, especially prime cash-flow-generating real estate.
They can tax your real estate. They can kill the economy so your cash flow doesn't. The hordes can then come and burn it down.
And they can change the rules of title and simply confiscate your land just as they are doing to greek bondholders.
There are no rules by which we can play their game. When they are losing they will simply change the rules in their favor.
Gold, art, collectibles and any thing else you can carry, stash, play by their own rules.
Gold comes from supernovas.
You mean if the economy supernovas we'll have more gold?
If the economy supernovas, you will have more value in your gold.
It is interesting that Type II supernovae (which make gold) show decreasing time between energy crises and decreasing effectiveness of each energy "bailout", all superimposed on an energy ramp-up. A core burning timetable can be seen in the table near the top of this page: http://en.wikipedia.org/wiki/Type_II_supernova. When the star makes iron in its core, it self-destructs five days later because iron cannot generate energy from fusion. This is when the sheeple fear inflation, or when the Keynesian multiplier collapses. I know a very smart guy who worked on Type II supernovae and I pointed out the similarities with the financial system. Here is a copy of an email I sent him:
Economics is like physics in that there is always a point at which your assumptions break down, and you need to know these points to protect yourself. I can see the atoms in the core of a dying star thinking there will always be fusion energy available, and laughing at the paranoid survivalists in the outer envelope who talk about declining fusion returns and gravity getting a bit steeper than 1/r^2 and such. And so we go from helium burning (creation of the Fed) to carbon burning (off the gold standard) to oxygen burning (S&L bailout) to neon burning (LTCM bailout) to silicon burning (Crash of '08) and now we come to iron, which is when the Fed buying bonds reduces bond prices instead of raising them. This happened last year. Our core has become so corrupt it is not releasing energy, it is extracting it exponentially. Get out. Get the fuck out!
The rants and ZH links do not seem to have broken through. He has a signed picture of Obama in his house. Probably paid quite a bit for it. Despite this, I would hate to see him get sucked into the black hole (along with four other physicists I know). But the masters of logic and rigorous assumptions have falsely assumed that their fellow Ph.D.'s have the desire and ability to fix things. Meanwhile, I have a flatmate who is a total oaf with no education but I converted him to silver buggery with three simple words: "It's all bullshit". He understood immediately. These aren't the only such anecdotes I can give. Lesson: School sucks. More school sucks more. Just as Rockefeller intended.
Hope that works out for you.
We are all star stuff.
They say that we are made of the exact carbon atoms that everyone that has lived before were made of. Your carbon atoms used to be Ghengis Khan's..
I guess I should have said from OTHER stars...
Heavier elements like gold all came from supernovas, which is why they are scarce and BB can't print them.
... a google-plex...and the ~poof~!
Is nobody going to call this guy out as an anti-Ron Paul shill account? Every one of his posts is racist, anti-immigrant, and ends with a plug for Ron Paul. Between that and the confederate flag I'd think it's blatantly obvious that he's trolling to create the perception that Ron Paul supporters are anti-immigrant racists.
In fact, Ron Paul is possibly the softest on illegal immigration of those Republicans still in the race. He basically says you go after the employers and when the illegals can't get jobs/money, they go home (which is correct).
I think you just did "call this guy out as an anti-Ron Paul shill account". So what? Free speech is protected here. Feel free to Down Arrow if you don't like what he says.
Amen brother. if people can't post thoughts here... it's already over
He didn't say censor, he said call him out.
Which he did. Admirably.
Thoughts are one thing, open provocations are another.
Would you still comment here (or tell others to visit ZH) if every other comment was nothing but a racist neo-Nazi, white-power supportive one? What if the ratio was 70%? Or 80%? Or 99%?
There are other things to consider here, primarily the signal to noise ratio. The higher the noise, the harder is it to get to the valuable signal. Worse yet, as ZH grows more influential in the financial world, more and more will find it in their interest to attack the ideas presented here.
As I mentioned in my other post, the downvote threshold should be turned on so that the community can help to weed out the noise. It isn't really censoring, since anyone can sign up and see this garbage if they want to play with the trolls.
No. No. NO! We'll end up like some financial version of Slashdot. Group think and dissenting opinions incapable of being aired.
Fuck.
That.
I have. It's clearly Red Neck Repugnicant, who has a LONG history of pulling shit like this.
Why I'd almost forgotten about him.
"He basically says you go after the employers and when the illegals can't get jobs/money, they go home"
Exactly... but funny thing, those big boys want as cheap, under the rules labor either here or abroad (it's all the same thing) and notice, those congressmen say a lot but do very little to those employers.
(Saying a lot and doing very little - or the opposite- is their expertise)
It's a lot like the big chemical companies selling quantities of stuff that can have no other purpose but to process cocaine down south and never getting a phone call or pleasant visit.
it's almost as if the rules don't apply to some folks
i"t's almost as if the rules don't apply to some folks"
Say it isn't so! I thought justice was blind.
yes, but that's because the bankers poked her eyes out .
Fuck rules and risk, Angelo walks without nay a single charge filed.
http://online.wsj.com/article/SB1000142405274870352900457616028161665234...
Laws a for suckers and fucking peasants.
There is no such thing as risk as this example CLEARLY demonstrates. Risk is castrated by zero prosecution.
Fuck Angelo, I hope a piano lands on your head.
Anti multiculturalism and racism are two very separate doctrines. Racism is about color, multiculturalism is about assimilation.
Do you ever have anything else to say? Anything of significance? You aren't a very good troll. Maybe you should talk to MBD ,Robo, or Hamy. They are some good trolls.
What elementary school did you not graduate from?
Multiculturalism has been allowed to thrive in America, and is a source of strength and creativity. Diluting the blood and culture of ignorant, uneducated bigots with that of hard workers and ambitious spirits increases the flow from the well springs of loving kindness and imaginative minds.
It is fine for multiculturalism to thrive in the free market of ideas and culture, but it is completely bad that it is being jammed down our throats by government thugs.
actually multiculturalism isn't a source of any strength. It's simply a source of faction used by those in power to divide and conquer to retain power. As such it is the enemy of a free people.
Multiculturalism has been allowed to thrive in America, and is a source of strength and creativity.
_____________________________________________
There is multiculturalism in the US?
Made me laugh.
There were various cultures on the same superficy now occupy by US citizens of A.
Compare the numbers and see that US citizenism has decreased diversity and singularity over time to favour conformity and uniformity.
But as well known, the cure for the ailments of US citizenism is more US citizenism, more conformity, more uniformity.
Nothing new in the US world order.
Herp -a- derp.
Every single one of your posts is racist...you best mates with that Norwegian shooter by any chance?
The nation prospered because of E PLURIBUS UNUM, From Many.. One. Multiculturalism means the UNUM is never happens.
No one here suggests having a diverse group of peoples come to our country is a bad thing. We DO suggest that diverse groups pushed to stay that way via vote grabbing gov policy is very, very bad.
Look no further than the PC monikers of AFRICAN-American, Italian-American and so on.
Don't know about you cats, but while my Grandparents were all born in Sicily, I AM AN AMERICAN.
Dont worry, from the colour of your speech, it is clear that you are a US citizen.
I thought this article was about limiting risk on bankers, not on immigrants. You can go back to your hick friends now....oh, and change your tagname to Born Idiot
exactly my thinking
Take your stupid Ron Paul smear posts and go back to HuffPo where you might get some bites. You do realize they fall off the face of the net, and are not seen by anyone of the general public, right?
Fail Troll Fails. Hard
Edit: Okay, I see now that the downvotes do not eliminate the trolls from the view of the general public. Worse yet, the GP can't see the up/down votes either, so they cannot even determine what messages the commenters have approved/disapproved. This gives the trolls quite a bit of leverage in their attempts at character assassination (including tainting ZH).
Tyler, perhaps you and Sacrilege should consider turning the Trollspray feature on, otherwise the bots and other brainless trolls will have the run of the place.
FWIW-
I seem to remember a feature that caused comments with 50 negative votes to disappear.
But, once disappeared, the follow-up comments, taunts, and frivolity lost their frame of reference.
Maybe just allowing the view of the up/down votes without the ability to vote for the non-registered?
Regulars seem to catch on to who is who pretty quickly.
How about whenever someone without a login views a page, if any of the posts have more than 50 junks, the username will appear as "Certified psyops troll" and the avatar will appear as the DHS logo. Keep the post itself the same. This might teach a few awakening sheeple to recognize manipulation.
Nice to see the souther biggot crowd join in.
Son,
Please stay out of the sun or turn your collar up, at least.
WE ARE ALL IMMIGRANTS HERE OR SONS AND DAUGHTERS OF IMMIGRANTS
After three more than three hundred and fifty years in the colonies and later the us of a---I was the first of my family to immigrate to South America, and actually, I am American----so why should need permission to come and go as I please in the Americas
Please explain what seems like nonsense to this oldman thanks BP om
BornPatriot gives the Confederate battle flag a bad name. Just like the KKK.
Immigration and mis-allocation of capital have exactly zero to do with each other. In fact, immigration helps the economy, especially in a country with an ageing population. Without immigration, the US would be a country of Natives in TP's.
i'm sorry, i didn't realize that multiculturalism and illegal immigration was now IN at zero hedge???
Can anyone expound please?
"Real multiculturalism threatens the legitimacy of the NATO war agenda. It also constitutes an obstacle to the implementation of the 'Clash of Civilizations' which constitutes the cornerstone of U.S. foreign policy. In this regard, Zbigniew Brzezinski, former U.S. National Security Advisor, explains why multiculturalism is a threat to Washington and its allies: '[A]s America becomes an increasingly multicultural society, it may find it more difficult to fashion a consensus on foreign policy issues [e.g., war with the Arab World, China, Iran, or Russia and the former Soviet Union], except in the circumstances of a truly massive and widely perceived direct external threat. Such a consensus generally existed throughout World War II and even during the Cold War [and exists now because of the 'Global War on Terror']'."
-Mahdi Darius Nazemroaya
http://www.globalresearch.ca/index.php?context=va&aid=27029
Give it time. When this bomb blows, the consequences will be begin with heads on spikes over the town gates.
I wait for the restart day by day.
More like a strike/slip point causing an earthquake...
Then again, doesn't this current system really, really NEED to be DESTROYED anyway??
<----I would quit my job soon to convert my 401K to PM's
<----I will wait until the first big leg down and then move it as Im laid off...and risk missing it all together as it hyperinflates away
So let me get this question in early...
My reply would be to convert yor 401k to PMs (which is what I partly did when I took down my IRA in late 2008). And keep at your job as long as possible and save whatever you can. Work and save.
Keep at your job?
10-4 re error
That would be: "keep your job."
"How much risk will you take on in gaming if you can lose $1 million without any loss to yourself?"
Let's go to an expert.
"Well, I'd leverage it 40:1 and take unhedged speculative bets on European debt"
-Jon Corzine
It looks like the mainstream (alternatrive) media is really trying to get the Word out!
Kudos!
Will the sheep be reached in time?
Will the Facts overwhelm the Sheep?
Will it sink in?
Will De-Population be side tracked thru the education of the masses?
I can only Pray, that this will be the case..
There may be some movement in the people's understanding that things are VERY BAD.
But, I do not think that most will get it in time. Prayer may help. Gold will help too. Yet, I still get that 1000 yard stare, that slack-jawed look like I'm from another planet when I encourage others to save, beware and buy gold.
I guess they just don't want to hear it. They don't want to deal with the cognitive dissonance that buzzes in my ear every day, all the lies...
+ 1 to you, o, town crier! But, do they listen?
Prayer? Most religions discourage persuit of wealth.
God? She doesn't care about your materialism.
Leave religion at home.
Baaa,baaa,baaa
As Leona Helmsley might have said, "Risk is for the little people".
Nassim Taleb on Antifragility:
http://www.econtalk.org/archives/2012/01/taleb_on_antifr.html
CHS...Where have you been for the last 100+ years? It's called a business because it can transfer risk to others, that is the PRIMARY reason for business formations!
Tell that to the entrepreneur who opened a restaurant with his life savings and is now watching it wither and die.
You need a little more perspective, Dope. While what you say is partially true, it is also partially false, which discredits the entire statement and the point you were trying to make. Think big picture, Dope. Two words can summarize it: moral hazard.
+ 1
I wish I could give you another for both good points:
-- moral hazard (bitchez)
-- restaurants are risky businesses
Also, business formations are not so much designed to transfer risk, but to limit it to an acceptable level. Like the sole proprietor who incorporates in order not to place their home (or other personal assets) at risk.
Besides, most of the risk transferred still has to be paid for by insurance. The rest, all comes down to due diligence of all parties involved in their business transactions.
If one party has limited risk what does the other party have? By limiting your risk you are transferring risk to those parties which are unable to limit risk.
Parties which are unable to limit risk are the future, the environment, wage earners, the undereducated (third world countries) to name just a few.
When the GOP cries out for environmental and labor deregulation what exactly do you think that is? It couldn't possibly be the transferring of risk to those parties which are not able to limit their risk?
When the politicians called out for globalization what do you think that was? It couldn't possibly be the transferring of risk to the underinformed countries could it? Because everyone knows China's environmental catastrophe was not a risk transfer from the developed world.
Since a secondary activity of a business is to capture the printing of money a restaurant owner may consider looking at ways to do so. Perhaps restructuring how food is sold and prepared at the restaurant would open up the ability to accept food stamp program payments (money printing). Customers choose ingrediants which are paid via food stamps and the profit from the food "sales" pays for the overhead (preparation).
Think you could get tangled in your rope, dope?
Makes me wonder if management bonuses significantly increased on Wall Street after the investment brokerage houses were taken public. /sarc
We had a major problem brewing long before the "global financial crisis."
a bit confused, are we?
business can transfer SOME risk to others, but the first losses are theirs, in the original idea of the corporation
The only reason this system keeps going is that individuals are willing to send their hard earned money to bankers in far away places and take computer digital records in return. The bankers take enormous bonuses for swapping computer digits in unfathomable ways but take their bonuses in the form of gold, yachts, mansions and other tangible assets. What happens when there is a rush to the exits to trade in computer digits for real assets? The Maddoff investors were very happy with their digits until there was a rush for the exits.
Mark to butthole modeling, bitches. Who needs price discovery when one pulls prices out of their asses?
Record bonuses for ass-packers, spelled F-R-A-U-D.
Piper's piping bitchez!
No worries. BHO plans to step in and save the world. He has a long track record of outstanding accomplishment, and he'll git er done. 100% fer sure. Worry not.
Supernova reference is great. A star fuses hydrogen into helium and gets some energy - excellent, let's do it again. And so with each fusion process through the periodic table, more energy is produced and the joyride goes on.
...until it gets to iron. Game over.
Fuck the system.
Excellent article Tyler.
+ mucho!
Fitting, classic tutorial from Uncommon Valor:
http://movieclips.com/9T2qP-uncommon-valor-movie-a-lesson-in-explosives/
"At some unpredictable stick/slip point, the accumulated risk will cause the system to implode like a supernova star."
Charles, there is only one small change I would suggest to improve your ending paragraph:
"Gold Bitchz!"
Gold just spiked $20...bitchez.
Double secret probation. pffft!
and when risk gets out of hand there's JPMorgan to pillage MFGlobal.
"Their money or your life!"
Poor Corzine, what else could he do?
Risk is risky.
Heads they win.
Tails we lose.
Ask those motherfuckers who stole my money at Full Tilt Poker.
No wonder the 1000/2000 NL Hold em games were so strong from 2004-2008. They were playing with my money!
And here I was always told the reason the CEOs made the big bucks is because they are the ones taking ALL the risk. Maybe THE SYSTEM is at risk because it's not based on reality anymore and all of it's lies are catching up to it.
"The consortium has only two ways to create the illusion of solvency when the punter's $100 million bet goes bad: borrow $100 million from credulous possessors of capital or counterfeit it on a printing press."
So "buy" gold. Simple.
We learn by experiencing consequences, both good and bad. What kind of man is he that never fails?
the result of greed on modern WESTERN "men" and "woman" put into song. Its the GM sound! http://www.youtube.com/watch?v=KkLj3on6oUs&feature=share
Love the clueless fools who blame all those issues on immigrants...shows how little they know about economics.
Mission accomplished Ben. Inflation is here. can you back off the printer a bit please?
http://tampa.cbslocal.com/2012/02/22/florida-drivers-shelling-out-nearly-6-a-gallon-at-some-gas-stations/
If you give a mouse a cookie...
.....he shits chocolate chips.
No heaven without hell, baby!
we supernovaed a long time ago into a black hole
Family: Drilling the Vortex of Perception
The values of 1 and 0 are not absolute, as any engineer will tell you. They are relative to the event horizon looking glass, which gives you LRC. -1 is relevant to them. The clock is being wound through the neutral to complete the overall circuit. You just don’t have a meter to gauge it.
The problem/solution is diversity; symptomatic facts / perceptions are generated faster than they may be processed by the limits of the meters. Just when you think you have a foundation to build upon, it blows up. It’s not about the destination; it’s about the ride.
At some point soon, the rest of the world is going to look back at America’s consumption weakness as the cause of its austerity, and the inclination will be to start a war for the sake of misdirection. Beneath the façade of daily events, America was built to provide artificial demand for the world’s artificial supply. Government gets captured by legacy time when its looking glass, constitutional character, is ignored.
A handful of legacy families initiate war and a handful of new families end it. A nuclear bomb is trivial relative to the scale of humanity’s current capability. The amount of hell unleashed will depend upon participation in the middle. I’m not a fan of Ron Paul, but what the rest of the world sees is that he has more support among veterans and young people than the rest of the candidates combined, and he is promising to cut their government budget. Something to think about.
The problem with logic is that all the facts are never present at processing time. The problem with emotion, logic head wind, is that it is simply anti-logic. Left to their individual processes, both will discharge. Emotional intelligence, the point of passion, is to employ the headwind of emotion against itself for propulsion. Set the sail of logic to employ gravity. Homosexuality is noise in the circuit, which may be further employed in the feedback loop.
Civil marriage occurs within an event horizon, or across close horizons, pulling them close to the ground, the social construct of the past. Real religious marriage crosses event horizon gaps, extending relative ground, with distance depending upon the gaps crossed. At the next integral in the multiplexer, the intelligent children passing through the flux, the path to the future is being set across the resulting stepping stones.
Programming intelligence is not about solving the traveling salesman problem to the end of corporate welfare. It is about expanding the market, space, to provide for corporate growth, which then may be employed as a catapult, triggering the next iteration. When you follow implicit and explicit law within an event horizon, you are winding the clock, loading the quantum spring, to the extent your non-conformance cannot be measured. The empire seeks to eliminate private life accordingly. You seek to expand it.
Being angry at an empire is like yelling at your sculpture because its destination does not comport with your original intent. Where you go depends upon the starting material chosen and what is revealed as its false character is chipped away, to the hidden beauty beneath. Likewise, the landscape you paint is a function of the limitations you accept, in a balance between order and disorder.
To the so-trained eye, military explicitly appears to be big government, which may only result in central control through a hierarchical apparatus, which may only result in rape / exploitation. But beneath the surface, across militaries, runs an implicit spring waiting to be revealed. Explicitly, military is an aggregate of individual insecurities masquerading as social securitization. Implicitly, it hides the seed of the next generation from time.
Miscommunication among nations is a function of operation within separate time horizons, confronting the empire of History from different angles of incidence. Their jealous 2-yr-old civilian administrators always look for any excuse to play emperor, seeking the support of empire robots accordingly.
The emotional empire, led by the tyranny of its least common denominator, in the form of an emperor, naturally seeks to turn logic on its head, to sail directly downwind with the largest sail possible, made up of identical, easily replaceable pieces, on a boat expanded to accommodate the sail.
It is against this headwind that the religious family sails, sometimes in a fleet, sometimes alone, and not so magically ends up in a common destination with others, just before the next sail is set for another adventure. It is not the admiral, but rather the child, that is really in charge of the voyage.
Teach your children the fundamentals of sailing, but do not demand a strict policy and expect anything other than to travel in smaller and smaller circles, on a ship of shared misery on its way to death. When you set your course based upon fear in the rear-view mirror there is no other possible outcome. Life is meant to be lived, not in repetition, but in the spring of diversity.
Teach your children to sail competently and let them go, to become captains of their own industry. That is the flame of democracy, all hands on deck, to each to own purpose, with a common set of values under development, but no particular destination in mind. Learn to tack before you need to tack. Play to learn and learn to play, to maintain an elastic looking glass, a healthy perspective on life, which aggregates into the NPV window required by all.
Value is a perspective, sometimes measured, sometimes not, but life is extremely fair over time. Bet accordingly. Religious marriage is a leap of faith, against the waves of time. Some make it; most do not. Subsidizing failure is not the path to success. Pick your kids up, brush them off, and put them back on the horse.
The empire is a stage. Your private life is your private life. Don’t mix the two and expect a happy outcome. The problem with escapism / drugs is that the cause, relative empire control, increases when you get back. Addiction is prisoners dilemma. Logic is a prisoner to historical priorities. Emotion is a prisoner to lack of priority. Set the tack to balance the two, in the order required to befit the environment.
Just a babe in a black abyss, no reason for a place like this
Revelations: the world can consume by itself.
The US world order is organized so that the consumption is done by US citizens.
And Steve Martin said...
Tipping Point Bitchez...
Good article. Concise, thought-provoking. I personally believe that 'personal accountability' must inherently leave the equation when one appoints a 'representative' to make decisions for them – IE a government official. Government is itself a system of offloading moral hazard which always unwinds into the kind of fascist kleptocracy you see before us now. Therefore the only solution is to re-introduce accountability by undoing our ties to the state – a circumstance which will probably be forced on us anyway with the coming collapse and infrastructure breakdown.
One of the clearest arguments I have ever read for why the OTC derivatives market needs to be nuked.