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Archive for January, 2010

“Que sera sera,

whatever will be will be,

the future’s not ours to see,

que sera sera,

que sera sera”

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We cannot know the future..

…or can we?

Maybe it is actually possible to see the future. In fact don’t we do that all the time. In small and insignificant ways mostly to be sure, and without any great precision, but good enough to be useful. True, no-one foresaw the Indian Ocean, Boxing Day Tsunami for instance, so there is still much that is beyond us. And love is another phenomena we will likely never foresee. Who will my true love be? Perhaps that is a good thing.

But in many other ways, the future isn’t hard to see at all. Just extrapolate from the past and the present and you are looking at a pretty good picture of exactly what the future holds. It has more to do with taking the time and effort to conceive and visualise it than whether it is possible or not. Anytime you plan something you are glimpsing into the future. So it is less about whether we can see something of the future and more about whether we want to.

There is a lot in this world that is really about whether or not we want to. “There are none as blind as those that will not see”. Unfortunately, if you have already decided what you want the answer to be then you aren’t going to be terribly open to any evidence to the contrary. On that note, I found a lovely quote recently: “The great tragedy of science – the slaying of a beautiful hypothesis by an ugly fact” ~ Thomas H Huxley. It applies not just to science either. Most of us one way or another are walking around with our preconceived notions that we are very attached to. And which we would be obliged to give up if we had to acknowledge the ugly facts.

I was interested to read a little of a young woman’s blog recently where she stated she hated politics and wasn’t the least bit interested. Whenever anything political came on she just zoned out. Hmm… that would make it rather difficult to have any sort of political consciousness then wouldn’t it. Being an actively engaged citizen in your community is pretty much ruled out. You have pre-emptively removed yourself from proceeding, and at that point any decisions that get made are going to get laid down on you whether you like it or not. More to the point, you wont even see it coming. You will be a possum fixed in the headlights in the middle of the road. Squish!

There might well be some utility to being able to see what is going on around you and to see what is coming down the road.

Alternatively, we all can just carry on as usual having faith that the rest of society will protect us from harm. That would be the herd mentality… and on average it does kinda work. It just depends on whether you want to be a sheep I guess. So what are you?

If you were looking around now, and extrapolating into the future from what we already know, what do you reckon we could or would see?

I was talking a while back with a friend about perception and seeing and came up with an analogy that I still really like. It went like this: imagine you are walking out on a huge savannah grassland. You are following a friend, but he is several hours ahead of you so you can’t see or contact him at all. There are a number of various features about so it is possible to navigate on a very basic level. Anyway, you are heading for a rocky outcrop where you were supposed to meet up, but when you arrive he is not there. What to do? If you were a primitive aboriginal tribesman, you would probably have finely honed tracking skills to search around the rocks and vegetation and look for signs and spoor that indicated where your friend came from and in what direction he left. Probably you would have a petty good idea how long ago too and where he would be by now. But if you were fresh out of a city, that approach simply wouldn’t work, you would look but not see. What you might well be able to do instead would be to read the note your friend wrote in a rock wall that said where he had gone off to and why. They are both signs and signals to those who can read them. The moral of the story is that there are many ways of seeing, and the signs actually are there, it is only a question of what we can read from them. It is about our ability to see.

The interesting thing is that we all tend to see things just a little bit differently. Even better, the more people we have looking the more we can make out and comprehend. I have done a fair bit of gazing to the future over the past year or two and come to some conclusions, but what can you see?

Feel free to write any thoughts you have in the comments section below. I would be interested to get some more opinions and observations. It might be worth knowing what the future holds.

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Well, we all know that California is kinda F.. , err, messed up.

But they may be about to do something smart for a change.

Below is the link to a ‘Market Ticker’ (see Blogroll) article on proposed drug legislation reform. It could have been lifted pretty much verbatim from my essay “Drugs Practically“.

So, either I am a genius 🙂

…or maybe this stuff is just so painfully obvious that common sense couldn’t be denied forever.

Worth a read.

“California grows a Brain”

Sometimes it takes a crisis to get anything moving.

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(What to Change)

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the Nature of the Beast

We have got so used to how our governments run our money that we often can’t imagine it being done any other way. It can, easily, just cross the border into any other country and see, every one is different to some degree. Not that they may necessarily be doing anything you would want to emulate, but the point is not whether they are doing so well, as that they are doing things differently. Government, culture, rules and money are all created constructs, they are dreamed up out of nothing. There are very few basic laws of nature that say things have to be the way they are. Some things might be necessary like sewage and water systems, but after that things start becoming arbitrary pretty fast. That’s actually a good thing, it means we can change them if we need to or want to. I think we are rapidly approaching a time when we will need to and want to. That means we can and should, I would argue, look at changing how we conceive of and employ money in our societies.

Much of what we do is tradition and precedent, a lot too though is human nature. If you leave money operations to private interests then you end up with self-serving enrichment scams schemes. And if you leave it to governments then money is wasted or funnelled into political objectives (and not in a good way). It has been said about politics, that anyone who actually wants to be involved should be automatically barred from participation because the type of people who are attracted to power are the very last people you want wielding it. Much the same applies to money, the nature of money is to attract avarice, and the people who are most interested in it are the people to be least trusted with it. Inevitably the love of money and power both end up being about control over other people’s money and other people’s lives. That is the beast in the human heart, the hunger to dominate and control.

As for the traditions and precedent, that is a tricky one. Every conceivable law and regulation has been dreamed up over the centuries, many of them perfectly reasonable and desirable as well. On the other hand, just as many are completely unreasonable and all have been manipulated and evaded at some point too. Who is to decide what is reasonable or workable? In some circumstances the best solution is to make no decision at all. Should the interest or exchange rate be X or Y, actually the correct answer to that is NO. The rate shouldn’t be subject to some-ones discretion or, ideally, anyone’s manipulations either. Rates are an expression of relativity between two factors, the integrity of that relationship could do with considerably more respect, rather than the attempts at manipulation it typically attracts. They attract such attempts of course because of the money that can be made from skewing the playing field. I wont call that profits, because profits imply hard work, fair trading and mutual benefit. Manipulation is none of those and is the essence of the casino – the house always wins. If there is one true tradition and precedent, unfortunately it is the attempt to manipulate and game the system.

Most of us experience and use money on a pretty simple level. For us it is a medium of exchange for goods and services. I buy a pie off you, you buy a shirt from me. It is simple and straight forward. That is not the case with everyone. Some people trade not in goods or services, but instead deal in money. Often it is a family business that has lasted generations and has made them rich and powerful. In that sort of context, money is many, many things. It is power and influence, it is capital and investments, it is access to options and possibilities the rest of us barely imagine. It is all of that because they know what they are doing and the rest of us don’t.

That can be taken two ways – either:

A.)  they have taken the time and trouble to learn a complicated mechanism and therefore have the skills, resources and experience to achieve what the rest of us can’t.    – or..

B.)  they have concocted some secret and crooked deals that wouldn’t stand the light of day.

Typically both of those things are going on, although not necessarily by the same person.

Unfortunately, neither is terrible conducive to the greater good ultimately. The scam and the crook are simple enough to point the finger at, but even an honest money lender is problematic. The problem is not the individual per-se, it is in the systemic consequences of their circumstances. They own and control a vastly disproportionate percentage of the wealth. To some extent that is unavoidable, it is the 80/20 Pareto principle. On the other hand, even with the best will in the world, there is no way that can do anything other than create networks of influence and interest that decides outcomes. With enough influence the outcomes are invariably going to favour the interests of the already wealthy. Power and wealth concentrate and the beneficiaries claim it is merely natures course – how could they not. Never the less, it is not. It is system capture and it is the process that ultimately brought down the Roman Empire. It is a natural process in so far as it is a typical consequence of basic human nature, but it is by no means preordained, inevitable or necessary. Whatever anyone’s opinions of their own inherent superiority, enough aristocratic heads have fallen to le’ madam Guillotine to put the lie to that theory.

The world passed the point of being able to be run by aristocrats over 200 years ago. Inspite of numerous attempts to reinvent the model, the societies that have persisted with or resurrected divine elites have fallen from it. Be they communists, racists, high priests or financiers(Goldman Sachs ~ “we are doing gods work…”), there is no such thing as a group that has enough intelligence, wisdom or righteousness to run the world. We are all going to have to be involved and we are going to have to be educated, activist and invested enough to make it work. Regulation can only ever do so much. Good outcomes rely on good people, not just good rules. A crook can always evade or just break the law, and a clever crook can do it in plain sight without you knowing the difference. But you can’t fool all of the people all of the time. So the whistle blowers needs to have the protection of the law and not just end up being the only person prosecuted, but equally we all need to stand up and be counted when those sorts of shenanigans are going on.

Whether we like it or not, money is a major part of how we do things. It defines much of our relationships. Therefore, how we chose to construct it will define how we chose to construct our society. On one level at least, cash is cash, what is there to define? On another level our whole system of government is defined by money and vica versa; who gets to print it, how much, when, who gets to spends it, who is taxed and how much, what is the interest or exchange rates, what is legal use of money and what is not, how is it regulated, how is it denominated?

A lot of that is custom and precedent, a lot is pure utility, what works, but it could all stand to be re-examined. What began as the privilege of Kings and Courts is vastly bigger and more complex than that now. Excise taxes for instance were simply the local force de’jure taking his cut of the passing trade. As kingdoms grew bigger, it became profitable to institute a sovereign currency, once again skimming a percentage of everything. By defining and enforcing a legal currency, everyone has to buy their currency from the crown and sell it back at set and favourable rates, it is money for nothing. Or at least it was, while the same principle is still applied the complicating factors have multiplied. As the problems increase, so too do the expedient remedies, layers upon layers of them. Sometimes it is worth going back to first principles and starting over. If you were to do it all over again from scratch, what would you do differently, what would you change?

That is the great thing about a revolution, inherently you get to have a do-over, in fact it is pretty well mandatory. The new regime must have a new currency, otherwise you are just the old system in drag. Now, the politics and international relations of that are by no means easy, but they aren’t insurmountable either. Basically it comes down to people being reassured that their investments and savings aren’t about to get looted or eliminated. There is no need for that, in spite of the temptations to do so – why pay a debt if you can simply legislate it away? The answer on a purely practical level is because that isn’t how you win friends and influence people, let alone any moral considerations. And the whole point of a revolution was to aim at a more equitable and just construction of money, yes?

I will look at considerations, definitions and constructions of a sovereign currency in my next ‘Money’ essay.

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Bisphenol A

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We can but hope this issue is starting to gain some traction.

Bisphenol A could be outlawed in Wisconsin ~ by Jason Ramsey on Sat, 09/Jan/2010

And another more local report:

The New Zealand Herald

Interestingly, I noticed this subject pop up a couple of years ago and mentioned it to a number of people.  Which is why I was interested in this “takeaway” from the Herald article: – ” Yet when I walked into Auckland stores and asked customers and new mothers if they had heard about BPA, I might as well have been babbling in Aramaic. “

That was about what I found too.  No-one was either the slightest bit interested, or inclined to believe.

I would be very interested though as to why the media in NZ wasn’t all over this from the start?  Is this not exactly the sort of issue a free and inquisitive press should be actively investigating and warning about?

Finally after it starts to actually get taken seriously overseas we begin to murmur about it here.

It’s pathetic.

For a chemical that is implicated in harm to our children, we have meandered along with a hear-no-evil, see-no-evil attitude, it’s unconscionable.

Our children deserve far better from us. (in so many ways and in so many arenas)

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Well, that’s some sort of remarkable coincidence, I say that Interest Rates have to spike [here] sometime soon, and then less than a day later we get this:

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U.S. Warns Banks to Guard Against Rate-Rise Risks ~ By Scott Lanman and Craig Torres. Jan. 7 (Bloomberg)

U.S. regulators including the Federal Reserve warned banks to guard against possible losses from an end to low interest rates and reduce risk or raise capital if needed…

“In the current environment of historically low short-term interest rates, it is important for institutions to have robust processes for measuring and, where necessary, mitigating their exposure to potential increases in interest rates,” the Federal Financial Institutions Examination Council, made up of agencies including the Fed and the Federal Deposit Insurance Corp., said in a statement today.

The regulators told banks to run stress tests with scenarios including “instantaneous and significant changes” in rates and “substantial changes in rates over time,” including shifts of as much as 4 percentage points.   [Full article]

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In other words the authorities just told the financial industry to get ready for a shock.

How about you? Are you ready for a shock.

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NB.

Just saying…

Karl Denninger of the Market Ticker said that whatever the Fed (or Reserve Banks in general) might like like you to believe, they don’t really set interest rates, they actually follow them. If thats even remotely true then this would kind of suggest that they have lost control of rates, rates are building to blow and now the regulators are trying to front-run the news so that they don’t look like the irrelevances they really are.

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TEOTWAWKI: otherwise known as – The End Of The World As We Know It

Pretty much as long as there has been a world there have been Doom Merchants wailing that’s its all going to end, and the worlds going to hell-in-a-hand-basket, etc.

Well, in the grand scheme of things, sooner or later yes the world will have to end. But on the evidence to date I think we can safely assume that it wont be anytime soon.

So, much as some people love to make dire predictions and be pessimistic, the world is actually going to keep turning.

On the other hand, we do also have to keep in mind that history is written by the survivors. There are actually plenty of people throughout history that have come to a very sticky end. The dead tend to get buried and forgotten though.

So it is all very much a question of perspective really.

Is the world going to come to an end? Practically – no.

Relatively?

Well, that’s a rather more difficult question to answer. Because this is where TEOTWAWKI comes in. This is about the world “as we know it”. Even then that still leaves a very big and open field with which to work. For the people of Hiroshima, the world did end in a big hurry one day in 1945, but Japan continued. Then again, things were never the same for Japan after that in so many ways either (arguably the rest of the world changed on that day as well). History is full of seminal moments where an event changed forever the way of life of a people, or simply ended their lives.

Yes humanity endures and recovers, but lets not forget those that don’t, or the suffering that so many have gone through. The Depression of the 1930’s segued into the wars of the 1940’s. That was definitely the end of the world as a lot of people knew it. Arguably, the First World War was an even greater turning point that essentially ended the way of life of the Ancien Régime’s.

Are we at such an historical turning point now? My instincts and observations are screaming yes, but pretty much nobody else believes it. In a nutshell, no-one believes.

Yes, the economy is a bit rocky, there are rumblings about debt problems and we have heard about people getting laid off, etc, etc. But realistically, no-one actually thinks that we have tipped over a precipice and the world as we know it is disintegrating around as we speak. There is a good saying that it is only a depression if you don’t have a job. Currently in NZ the unemployment rate is officially around the 5% mark, in the United States and elsewhere it is much higher, 10% and above, but nowhere apparently is it high enough that the general population is alarmed to the point of activism.

The shopping malls are still open, there is food in the supermarkets, the ATM’s still work and TV, that modern opiate of the masses, is still crooning its soothing lullaby.

No-one believes.

Why should they? We survived Y2K, We survived 9/11, we survived the Tech Market Crash, and frankly we have survived the 2009 Crash as well. If we are in something of a recession at the moment, then what’s new about that? We have been in and out of recessions for decades. The economy always comes back bigger and stronger each time. There really isn’t any sort of objective proof that anything is different this time. Yes, the economists can talk about financial loses in the millions, billions and trillions, but that is all just funny money, it doesn’t bear any relation to real life. If some bankers on Wall Street have gone bust at their casino, what relevance is that to Main Street?

Frankly, the only thing that happened recently that did send a shiver down people’s spines was the cost of oil climbing up to around $140 a barrel. That genuinely did put a serious crimp in people’s lifestyles. But there again, another temporary fluctuation that just went away.

Nothing anybody can say is going to change people’s minds about the state of their world. People are optimistic that a year from now things will be better. I know, I have talked to my friends and acquaintances about exactly this and they all talk about things with the expectation that they will continue on exactly as they are now.

If there is a slim segment of the population that is alarmed by the portents and signs, then they are a very slim minority indeed. I like to characterise it per that old saying – Thinking is the hardest thing to do in the world, that’s why so few people do it. But on the other hand, if all I do is read the writings of other Doom Merchants and I have a depressive trait running through my family, I might not totally be the best judge of things. Maybe.

I might just be a pessimist.

Of course that could be like the situation with paranoids, just because you are paranoid, that doesn’t mean there isn’t actually some-one out to get you, haha.

Time will tell I guess. On the other hand, given enough time I will be dead anyway and it isn’t going to matter to me anymore, by then it will be some-one else’s problem… and so the world turns.

In the meantime, and assuming I have seen the truth of it all and am not just tied up in my own little apocalyptic fantasy… Seeing how this is the start of a new year and a new (sic)decade, lets have a look at some possibilities as I see them that would make for a very Unhappy new year.

1.)   The price of oil climbs back over $100 a barrel – possible, but I really don’t know enough about oil markets and oil market manipulations to hazard a guess as to what is going to happen there. Price doesn’t necessarily bear any sort of relation to the fundamentals. Although on the fundamentals, Peak Oil is looking like biting down hard from now on and that is serious on so many levels.

2.)   Peak Credit – Inspite of all the best efforts of central banks, credit is not going to be as free and easy again. Interest rates must inevitably climb sharply and again this is a situation that has impacts on so many levels.

3.)   Housing price collapse – the rest of the world has been hit hard by this, but so far NZ seems to have escaped. Not for too much longer I’m guessing. Imagine what the impact of a 30, 40 or 50% decline in the value of your home, on all homes, would mean. How many people would be feeling very poor, or worse would now owe more money on their home than it was worth? How many would that bankrupt? How many mortgages would foreclose? Why would anyone buy into a falling market?

4.)   Stockmarket crash – ultimately the stockmarket must be based on earnings. No earnings means no stockmarket. The American Dow Jones industrial average plunged 50% last year and then recovered half of that fall in pretty much the fastest recovery ever. But the fundamentals of employment, production, debt and sales never turned around and continue to fall. Apart from the torrents of government money printing and borrowing being funnelled into financial institutions, what else is holding up stockmarkets? Sooner or later the markets are going to have to find an equilibrium based on something real. For the last month they have just moved sideways. A break in some direction is getting set up here, I am guessing down. Even if trying to time the market is a fools game, the consensus is now betting on a further crash. Where the US leads, NZ will follow.

5.)   Unemployment – what is there to hold up employment in NZ? We have no industry to speak of. Most of our economy is build around food exports, tourism or government spending. Where are our export industries headed? I wouldn’t even want to try to guess, but if our major trading partners move even deeper into recession, you wouldn’t think that would be too good for us. Anecdotally, I have heard that tourist numbers are down as much as 50%. Ouch. That’s one of our biggest sectors for employment. Without a big turn around in a hurry, layoffs from there must continue to climb. Who’s betting on a big turn around any time soon? What if the numbers fall further? Then there is the government, but they are already borrowing $250 million a week to pay their bills. Tax receipts have cratered. With the best will in the world you cannot pay people with money you do not have. Increasingly government is going to have to look at cutting people. How can they not? Ohh, and one last factor. The building industry and related retail sectors are suffering and in real danger of further contraction. What is there to make anyone think that the bottom is in? What is there to stop further layoffs here either. Consider the question seriously, what is there to stop unemployment climbing to 10% or more?

6.)   Deflation/inflation – Does it matter which is happening or ends up happening? Either will hurt us badly. Of the things that caused the crash last year, none of them have gone away or been solved. All that has happened is that we have papered over the cracks with a wall of money that has been borrowed or printed into existence. If that was all that was necessary to solve the problems of the world then we would never have had any problems. I suggest that Zimbabwe and the Weimar Republic would argue that approach is not going to work. You cannot solve a problem of debt with more debt. Something has to break somewhere.

So where are the breaks going to come from this year? Can we muddle on through and continue on more or less as we always have? Or is The-World-As-We-Know-It going to crash down around us?

Place your bets everyone. Or more to the point, don’t worry, think, or care about any of this and just continue on per usual. Nothing to see here.

As far as I can see, pretty much no-one is unduly concerned. There are grumblings, but no-one else is panicking. I am yelling panic.

If there was belief, then there could be changes and action taken. Without belief then nothing changes.

Am I the prophet or the fool?

Are we accelerating towards Depression and War – or – will everything still be much the same another year from now?

TEOTWAWKI ???

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The system

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A quick little quote:
Taken from OfTwoMinds
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Formal education at all levels is fundamentally a factory model: raw materials (children/the unemployable youth) are assembled in large formally organized “factories” where a strictly rationalized mode of production “processes” the raw material into a standardized employable unit (tested and stamped “approved for work.”)

Some stamps are more valuable than others (Harvard, Cambridge, etc.) in terms of being employed in high-salary positions.

Units (students) which are defective after processing are either re-processed or sent to other even more tightly organized institutions, such as the Armed Forces, or the prison system.

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If the education system is anything like the rest of our social systems, then it might be assumed that it too is breaking down and producing ever more defective units. If the options are prison and/or the military, then that suggests a couple of rather scary scenario’s.

One way or another some sort of purging becomes pretty much inevitable. Ask yourself at such times, who’s benefiting…

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