The most bizarre thing happened
Most of us in developed nations go about our daily routines (I spent this rainy Saturday working again in my yard, thankful it wasn’t 30 degrees Celsius again), but I can only imagine what this event must have initially provoked in the minds of the witnesses. What a phenomenon to try to comprehend, especially in the moments after, but it is still the most bizarre thing I have heard happening in quite some time. Chance and coincidence… my, my.
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Our inability to see the truth or reality
Perhaps it is that I have been sick and working too much lately but I am tired. Tired, that is, of our inability to see just what the hell is going on in the world. Tigger’s dead Dad speaks to him in a friggin Nike commercial and all is well in golf-and-money land as the Hero is a philanderer no more… “all is forgiven”… at least according to all the Viagra-munching geriatrics who think golf is a sport. Moron journalists (I should insert ‘so-called’ in there) spot a speck of dust floating in the air and proudly pronounce: “This is just another sign that the global recession might be over.” (Translation: “I have no clue what the hell is going on and no idea what anything means… I’m a TV news-reader!”) People who would not be able to change the battery in their laptop (“arn’t laptops disposable?”) are pronouncing that Steve Jobs’ latest boutique techno-gadget is a “game-changer” that is going to revolutionize the world. (Well, that might be true if by “revolutionize” they mean it will change even more computer users into mindless mass-consumers who do nothing but download farting apps and repeat whatever marketing slogan they heard in the latest Apple ad, convinced that buying crap online is THE epitome of “using technology.”) (On another side-note, a question for the tech-industry: if you turn all technology users into mass consumers, who are you going to hire in the future to create the next generation of branded, mass-consumer gadgets? A fart-app-downloader will not have the knowledge to program or engineer your next device. Or are you planning to rely on Chinese and Indian labour?)
Grrrr… I shouldn’t be so harsh. BUt I just get so riled when it is so easy to see that the world is facing such extreme probelms and all we can think about is the return of some golfer and how we still live in La-La-Credit-Bubble-Land and how some mass consumer device is going to save the friggin world.
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2010: The year we realized that the modern economy is nothing but a giant Ponzi Scheme
I really need to start posting more uplifting items… but, as usual, I spent my lunch hour reading some of the news and financial sites I frequent and finally had confirmed what I have been suspecting for some time: that the modern economy is nothing more than a giant ponzi scheme. Of course, I am not the first one to come to this realization but even today I am really surprised at the level of negativity by those who would appear to know what is what when it comes to fianances and economics (and, of course, who are willing to discuss it).
It might be that modern economies are nothing more than the creation of a financial elite or cartel (and the politicians who empower them) which would include the U.S. Federal Reserve but it goes well beyond the U.S. and the 20th Century. I suspect that the true underlying cause was petro-wealth (cheap, petroleum-based energy) which was plentiful for most of the 20th Century. The bounty allowed developed nations like the U.S., Japan, Britain, Canada… to build a modern, growth-based economy where much of what was promised to citizens would actually be realized in the future. Promises and expectations blossomed.
Today, we are entering an era that will be characterized by expensive, hard-to-access and hard-to-refine energy. However, the promises and expectations are absolutely dependent upon vast quantities of cheap (20th Century) energy. And so, quite simply, something has to give. Unfortunately, it will most likely be our modern, consumption-based, cheap-energy-dependent, and put-off-until-the future economies.
And what will this mean? In some ways, I am sure it will affect your average citizen and his or her current lifestyle. But here is where I am less doom-and-gloom. While it will no doubt affect you and me (assuming you and I are both ‘average’ citizens of a developed country), I am sure it is going to affect the elites much more than anyone else. It will also affect governments (who are or who represent the elites) who tax away wealth and squander it (think of all the wars fought over the course of the 20th Century) or hand it over to those same elites (think of all the financial bubbles, printing of money, and corporate welfare/bailouts). For them, the Ponzi Scheme will no doubt end soon… and let’s hope it is a rather gradual and peaceful transition.
At any rate, these are some of the lunch-hour (or so) readings that influenced this post:
What Does Japan’s Implosion Mean For the Rest of Us? by John Rubino on January 26, 2010
Bernanke’s Doom Loop by Gary North
Banking on the State, Piergiorgio Alessandri & Andrew G Haldane, Bank of England, November 2009
On the end of the era of cheap energy, see:
Aleklett, Kjell, Mikael Hook, Kristofer Jakobsson, Michael Lardelli, Simon Snowdon, Bengt Soderbergh. “The Peak of the Oil Age: Analyzing the World Oil Production Reference Scenario in World Energy Outlook 2008.” Energy Policy, vol. 38, no. 3 (March, 2010): 1398-1414. http://www.tsl.uu.se/uhdsg/Publications/PeakOilAge.pdf
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The extremes of the housing bubble
I have been reading a lot of the posts at Dr. Housing Bubble (DHB) recently… mostly out of morbid curiosity I guess. But to illustrate all of the crap that has been going on in this financial crisis, I can think of no better examples than the price histories of some of the homes documented at DHB. Here are three that I find frightening. Most of these home, I would not pay more than $100,000 Canadian for… let alone what they were being flipped for or what banks thought they were worth in providing equity financing (well, except for the first example perhaps) and some of them I wouldn’t buy at all:
Example. 3 (these ones are simply pathetic)
I really cannot grasp the kind of thought process that would produce a system whereby these homes would be priced at the levels they were in the recent past. But, then, after looking at these home and these prices, is it any wonder the world is in such a financial mess?
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