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Showing posts with label #finance. Show all posts
Showing posts with label #finance. Show all posts

Sunday, September 22, 2013

Paul Chefurka - "Paradise Lost"


“Paradise Lost”

Paul Chefurka




Many of us who have been paying attention to the state of the world over the last half-century have now begun to realize with growing horror that the progressive deterioration we have been tracking shows no signs of resolution   In fact, to some of us it looks as though there is no way to resolve this deepening crisis. The end of the track is in sight. The planetary factory is in flames, and all the exit doors are barred.

Proposed technical solutions are utterly inadequate to the scale of the problem.  Many ideas like geoengineering will simply make matters worse.  There is no political constituency for degrowth – none at all.  There is precious little political support for even putting a light foot on the brake.  This road to Hell has been paved with the very best of intentions – giving our children a better life stands near the top of the list – but here we are nonetheless. The climate is signaling that our future may be a little warmer than we were expecting, once our seven-billion-passenger train passes those gates.

Now that the denouement is in sight, I’m setting aside the anger and outrage, the blame and shame, to focus my attention instead on why this outcome seems to have been utterly inevitable and unstoppable.

Why has this happened?  I don’t buy the traditional “broken morality” or “flawed genetics” arguments.  After all, our genetics seemed to be perfectly appropriate for a million years, and the elements of morality that some of us see as sub-optimal (the greed and shortsightedness) have been with us to varying degrees since before the days of Australopithecus. I don’t think it’s just a mistake on our part or a bug in the program – it appears to be a part of the program of life itself. It looks to me as though much deeper forces have been at work throughout human history, and have shaped this outcome.

The main difficulty I have with all the technical, political, economic and social reform proposals I've seen is that they run counter to some very deep-seated aspects of human behavior and decision-making.  Mainly, they assume that human intelligence and analytical ability control our behavior, and from what I've seen, that’s simply not true.  In fact, it’s untrue to such an extent that I don’t even think it’s a “human” issue per se.

I have come to think that most of our collective choices and actions are shaped by physical forces so deep that they can’t even be called “genetic”.  I haven’t written anything definitive about this yet, but the conclusion I have come to in the last six months is that a physical principle called the "Maximum Entropy Production Principle”, which is closely related to the Second Law of Thermodynamics, actually underlies the structure of life itself.  Its operation has shaped the energy-seeking, replicative behavior of everything from bacteria to humans.  All our intelligence does is make its operation more effective.

This principle is behind the appearance of life in the first place, has guided the development of genetic replication and natural selection, and has embedded itself in our behavior at the very deepest level. Like all life, our mandate is simple:  survive and reproduce so as to form a metastable dissipative structure.  All of human behavior and history have been oriented towards executing this mandate as effectively as possible.  This “survive and reproduce” program springs from a universal law of physics, much like gravity. As a result, it even precedes genetics as a driver of human behavior.  And lest there be any lingering doubt about the connection to our current predicament, the survival imperative is what causes all living organisms to exhibit energy-seeking behavior.  Humans just do this better than any other organism in the history of the planet because of our intelligence.

In this context, the evolutionary fitness role of human intelligence is to act as a limit-removal mechanism, to circumvent any obstacles in the way of making make our growth in terms of energy use and reproduction more effective.  It’s why we are blind to the need for limits both as individuals (in general) and collectively as cultures.  We acknowledge limits only when they are so close as to present an immediate existential threat, as they were and are in hunter-gatherer societies. As a result, we tend to make hard changes only in response to a crisis, not in advance of it.  Basically, the goal of life is to live rather than die, and to do this it must grow rather than shrink.  This imperative governs everything we think and do.

As a result, I don’t think humanity, in general, will put any kind of sustainability practices in place until long after they are actually needed (i.e. after population and consumption rates have begun to crash).  I don’t think it is possible for a group as large as 7 billion people to agree that such proactive measures are necessary.  We are as blind to the need for limits as a fish is to water and for similar reasons. After the crisis has incontrovertibly begun we’ll do all kinds of things, but by then we will be hampered by the climate crisis and by severe shortages of both resources and the technology needed to use them.

I have given up speculating on possible outcomes, because they are so inherently unpredictable, at least in detail.  But what I’m discovering about the way life works at a deep level makes me continually less optimistic.  I now think near-term human extinction (say within the next hundred years) has a significantly non-zero probability.

Our cybernetic civilization is approaching a "Kardashev Type 0/1 boundary" and I don’t think it's possible for us to make the jump to Type 1.  Like most other people, Kardashev misunderstood the underlying drivers of human behavior, assuming them to be a combination of ingenuity and free will.  We indeed have ingenuity, but only in the direction of growth (and damn the entropic consequences).  We can’t manage preemptive de-growth or even the application of the Precautionary Principle, because as a collective organism humanity doesn't actually have free will (despite what it feels like to us individual humans).  Instead, we exhibit emergent behavior that is entirely oriented towards growth.

I see no purpose in wasting further physical, financial or emotional energy on trying to avoid the inevitable. Given our situation and what I think is its root cause, I generally tell people who see the unfolding crisis and want to make changes in their lives simply to follow their hearts and their personal values.  I'm not exactly advising them to “Eat, drink and be merry”, though.  You might think of it more as, “Eat, drink and be mindful.”
August 2013
Ottawa, Canada






Comments:

We struggle to explain why the conventional economic doctrine battles the realities of existential economic science; the first hypothesizes an infinite positive sum-game for human activity, while the latter goes begging to find a wider audience for its voice - that asserts a finite negative sum-game, dictated by the physical constraints and the laws of exponential mathematics. These two beliefs are deeply conflicting with one another because the first chooses to ignore the governing rules of the universe, whereas the other proposes integration with science, physics and mathematics, in order to set a better path for human activity.


So in our search for explanations we look to other writers, scholars, thinkers and activists for insights into why our collective actions and theories act in defiance of realities by endorsing infinite growth doctrines that are not only impossible to continue any longer, but they also push our species along an accelerated path destined for premature extinction.


As Paul Chefurka sets out in “Paradise Lost” maybe there is nothing to be done or anything else that can be said. Our internal wiring is so connected to the natural forces of the universe that it causes us to pursue and use more energy to serve our primary purposes of survival and procreation. Call it an inborn energy-seeking behavior. We are then just an integral natural part of the second law of thermodynamics serving to further and accelerate the causes of entropy in the whole universe. That being the case, conventional economic doctrines sadly wins the battle, as it is clearly aligned with entropic forces that invisibly shapes the destiny of humanity, the universe and eternity.



Hence in the last analysis, it is as certain as it gets - that we cannot defeat eternity, but that in itself should not dissuade us from seeking to optimize our entropic relationship with the universe in pursuit of a longer path. Too many things could happen along the way!     
.

T. A. McNeil
CEO and Founder
First Financial Insights









Sunday, August 25, 2013

INVESTORS' INSIGHTS - US #Dollar, #Commodities, #Gold, Jim Rogers

INVESTORS' INSIGHTS:

Week Ended August 25, 2013



FIRST FINANCIAL INSIGHTS
"Investors' Insights"

 

VISIT OUR WEBSITE

www.pwa2100.blogspot.com 



Does this mean we should land on the moon again for bargains? Folks could be waiting there right now looking for our business. Who we wonder?

Commodity prices are ready to shoot upwards whether there is a war in Syria or any big event somewhere else on the planet. Syria is somewhat irrelevant in this regard as markets are poised more on fundamentals to lift skyward.

The world is more fragile today than it was twenty years ago for obvious reasons. More people, fewer resources and wider geo-political tensions and instability. For more worries you may add in climate change, wildfires, water supplies and worst - fewer and fewer pollinating bugs. And that's the war we are really losing sleep over.

Bottom Line: Anyday, anything, or anytime - LIFT OFF ALICE!

INVESTORS' INSIGHTS
First Financial Insights
August 24, 2013

To the Moon...




Just cannot see eye to eye with Jim on the collapse of the US dollar, albeit the financial calamity is more or less a hangover from the 2008 Meltdown and remains plausible. Indeed we had  forecasted such a collapse two years back, by 2020. Bonds yes; but a currency short is fraught with too many pitfalls.

There are many reasons behind the likely stability embedded in the US dollar in such times. Two are big ones. One,  it will simply win by default because other currencies that are competitive, in any significant way, should be that much worse off in the turbulent economic times ahead. Remember, the US is a Hegemony with about 60 -70% of the world's resources and economies within its influences and/or control. There is little else in terms of a viable surrogate exchange media that could handle the global financial volume and liquidity needs as well. Former communist countries have huge credibility issues to overcome to garner any trust for this role.

But most importantly - they have bigger GUNS! In the end, that may be all that matters. 

INVESTORS' INSIGHTS
First Financial Insights
August 22, 2013 



Pentagon 2020 Outlook:
 Continues to See Strong US Dollar


(Read More)

International investment adviser Marc Faber is author of The Gloom, Boom & Doom Report. (SHERWIN CRASTO/SHERWIN CRASTO/REUTERS)

"BUY GOLD???"


While we have long held a position that in the long-run there is no legitimate or logical reason based on sequential forward events, and both historical asset-class performance and purchasing power losses over the past thirty-three years to own this object, yet this psychotic placebo continues to attract the attention of speculators.  Nouriel Roubini had candidly referred to it as a "barbaric relic" - his kind diplomacy is respected. 

So why do promoters such as Dr Doom continue with there promotions despite all this? We can presume that they understand the psychosis of small investors attracted to such a cure all placebo and operate to take advantage of their fantasy. The above purchase of Sprott affirms the possibility of such a tactic by promoters. 

But the most important issue is not whether to buy or sell this object - the real issue is disclosure. That is will the promoters advise the public of subsequent sales before they are effected or will they cleverly front-run them in various de facto forms ahead of small investors, underneath the radar of a complex myriad of international rules, laws and regulations?

Funny thing, we really don't expect  answers to these questions any time soon.


INVESTORS'  INSIGHTS
First Financial Insights 
August 20, 2013  

Just Keeping them ... 





 





Sunday, August 11, 2013

INVESTORS' INSIGHTS - Bloomberg, #JAPAN, Jim Rogers, New Taxes

INVESTORS' INSIGHTS:

Week Ended August 11, 2013


FIRST FINANCIAL INSIGHTS
"Investors' Insights"

 

VISIT OUR WEBSITE


(More)


Japan’s Economy Grew Less-Than-Forecast 2.6% Last Quarter

Investment Drops - 
Annualised Growth 2.6% 

Recently folks were applauding the turn around in profits for some of JAPAN INC's biggest exporters, as short-term delusional benefits of its managed currency devaluation jumped earnings in the second quarter, leading some to even proclaim that the two decades of economic decay had finally come to an end. That celebration was short lived, as overall GDP growth for the period, did not meet expectations.

Moreover, business confidence, as measured by capital investment, drifts hesitantly despite improved profits. Consumers can look forward to a possible increase in sales taxes, that certainly cannot add to their feel good levels. Plus, as import costs increase, they can expect their pocket books to be squeezed much more in the months ahead. 

In all, the deflationary overhang is still there as low interest rates cause both consumers and businesses to act cautiously. It is still hard for commercial banks to lend too, because lenders " collateral values" can disappear in an overnight whisper of a rate increase. These internal structural weaknesses play into foreign competitions' hands as they can invest capital more effectively. That's not good for the export business.

At some point, Japan's deflation should disappear with the import of hyper-inflation on materials from other countries, at the same time, so should exports. Then what?  Growing global populations and shrinking resources will not work to save this economy from the fix it entered after its financial bubble burst and the finite constraints of a shrinking planet set  in.


INVESTORS' INSIGHTS
First Financial Insights
August 9, 2013


U.S. Births per Year



Looking at this moving graph gives you that sinking dizzy feeling after a while, but nonetheless it is interesting from a general point of view. The baby boom and subsequent bust are obvious as well as the general flattening of the distribution over time as medical health care improves. By 2060, the vast majority are over 21 years old - that should shape into different consumption patterns.

Moreover, more breakdowns would be useful such as income, education, origin, gender, geography, and occupation, amoung other attributes. Calculated Risk provides its own observations.

But lets not forget the most important factors are the growing population numbers and diminishing resources (wealth dilution), that makes immigration of any sort economically illogical. What corporate entity gives away its shares for free and dilutes its current stakeholders' wealth? None! Down the road, as this issue becomes more apparent, then the levying of hefty "Immigration  Taxes" of say a $100,000 per applicant or higher, starts to.make a whole lot of sense as a way earn revenues to balance fiscal budgets, sustain taxes and keep the dilution of real national wealth in check

This form of tax recognizes that the ideals of three hundred years ago no longer apply in a shrinking world, where key resources grow scarcer by the moment. To do otherwise, exposes nations to the greater possibilities of social unrest and political upheaval as austerities unfold  - when the planet's capacity to deliver the essentials of living is curtailed.


INVESTORS' INSIGHTS
First Financial Insights
August 8, 2013


Growing sentiment for taxation fairness


(more video)



Shale's Big Shoes to Fill

No kidding? In fact, we have done this analysis once before using Bill Gross's (PIMCO) numbers that puts US total debt closer to $100 trillion once all contingencies, guarantees  and other unfunded future liabilities are thrown into the pot. And that's present valuing related assets using today's long-term treasury rates. What happens when they double?

So what would it take to pay off the US debt - you would  think that one trillion barrels in  world -wide oil reserves would do it?  Under strict assumptions it does, but then how do you run the future economy? To be fair, this assumes too, that all US debt is owed to foreigners. It isn't. The vast majority is owed to other citizens that Keynesian economists believe we should  not fret about under the theory  - it is just money you owe  to yourself. That could be a hard one to explain to pensioners if one day that debt is cancelled for whatever reasons.

Still. we are on-side with Mr Rogers, as it is going to take a lot more than shale oil to pay the debt and keep the "physical economy" running for a few more decades. Think about it!

INVESTORS' INSIGHTS
First Financial Insights 
August 6,2013 

Another set of NUMBERS







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