Jul 182012
 
 July 18, 2012  Posted by at 2:18 pm Finance
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Harris & Ewing Hot Air 1938
"Goodyear Blimp at Washington Air Post, Washington, D.C."

Jeff Rubin, former chief economist with Canadian bank CIBC, is very well known for his predictions of exponentially increasing oil prices (see for instance this 2009 lecture). Mr Rubin’s position was that prices would continue their rise due to a confluence of circumstances – that conventional supplies have peaked, that unconventional sources are expensive to produce and that demand would continue to grow with the energy requirement inherent in expanding global trade.

According to Mr Rubin, the assumption that transport costs would remain marginal led to the 2008 oil price spike, causing a global recession. In his opinion, high oil prices, not the sub-prime mortgage crisis, were the primary driver of financial crisis. This opinion is shared by many commentators. The simplistic approach of prediction by trend extrapolation is similarly common. In contrast, anticipation of trend changes is rare.

Mr Rubin’s price prediction was for oil first to pass $100/barrel and then reach $225/barrel by 2012, with continued growth and general price rises in an era of resource scarcity.

This was restated at the ASPO conference in November 2010, where Mr Rubin and I (both plenary speakers) ended up on opposite sides of the argument as to the prospects for growth, the trajectory for oil prices, the dynamics of the causative relationship between energy and finance, the nature of speculative bubbles, the importance of credit and debt, the probability of a major liquidity crunch, the basis for market prices, the applicability of positive versus negative feedback loops, whether or not equilibrium exists in economics, and almost every other important aspect of the way the world works.

We were, however, in agreement that resources are finite and that this will have very significant consequences in the future.

The position I espoused at the conference was that the oil price recovery from 2008/09 was close to peaking, and that, rather than the huge price spike Mr Rubin was predicting, we would see oil prices fall substantially over the next few years, as a result of financial crisis. The bursting of a thirty year financial bubble would be the primary driver of changes in the real economy, including the energy sector.

My explanation of the 2008 price spike and collapse, and also the manner in which next few years will play out, was (and continues to be) based on the context of the largest speculative bubble in human history. This has been a period of enormous inflation – a drastic increase in the supply of money and credit relative to available goods and services. Specifically we have seen a huge credit expansion, and, in the process, have accumulated a massive amount of debt on a global scale.

As we have explained many times at TAE before, credit hyper-expansions create excess claims to underlying real wealth through ever-increasing leverage. The additional purchasing power leads to the bidding up of assets prices, and, over time, to the expectation that prices can only continue to appreciate. The real economy becomes subsumed into a speculative mania.

Such periods have always resolved themselves with the extinguishing of these excess claims (deleveraging), which, being a contraction in the supply of money and credit relative to available goods and services, is deflation by definition. Investors wake up to the fact that asset price appreciation is over and that there is nowhere near enough collateral to back all the outstanding debt. The great grab for over-subscribed collateral begins. The resulting free-for-all picks up momentum as it proceeds and does not play out as a slow squeeze. The effective money supply collapses, and the impact of this is compounded by a very large fall in the velocity of money, leading into an economic seizure, or period of Great Depression. Prices follow the money supply to the downside, as speculation goes into reverse.

Naturally, such a period would be characterized by very weak demand for a long period of time. Economic activity would be greatly reduced, and a lack of purchasing power, thanks to monetary collapse, would leave money, not energy, as the limiting factor, probably for several years. While energy is the primary driver of expansion, finance is the primary driver of contraction, as the time constant for changes in finance is simply much shorter than for changes in supply or demand in the real economy. Finance is the operating system. When that crashes, resource availability becomes temporarily secondary.

One only has to look at the Great Depression of the 1930s to see the effect of a bursting credit bubble, even in the midst of plentiful resources. As the people who lived through it at the time said, they had plenty of everything except money. Our bubble will follow the same pattern, but as it is very much larger than the bubble of the Roaring Twenties, we can also expect the aftermath to be much larger. Resource limitations will bite in the end of course, but financial crisis extends the timeframe (at the price of making it worse later by sucking investment out of the sector for years, thereby setting us up for a later supply crunch).

Into 2008, increasing liquidity had been driving up asset prices across the board. A combination of liquidity and the perception of imminent scarcity led commodity prices to be bid up greatly in excess of what the fundamentals would justify at the time. The story of oil in 2008 is one of exaggerated boom leading to exaggerated bust as liquidity was rapidly evaporating, and the perception of scarcity became a perception of relative glut. The price collapse on speculative reversal (78% in five months) had very little to do with actual supply and demand, neither of which change so quickly. Financial crisis was clearly in the driving seat. At TAE we pointed out, as oil was reaching for the sky in early 2008, that the price would peak and then crash. Anticipating trend changes is a large part of what we do.

The resurgence of confidence, and therefore liquidity, from 2009 led to the beginning of the second price cycle of boom and bust. I was arguing in my 2010 ASPO talk, that oil would not regain the 2008 peak, but that price would once again overshoot the fundamentals on a perception of scarcity, and we would thereafter see prices fall again, probably to below the 2008/09 bottom – in other words to a level at or below that of the lowest price producer.

When Mr Rubin was asked his opinion of my ASPO lecture at our shared podium, his response was to call my boom and bust model “a bastardized form of monetarism that could only have been derived by a non-economist”. The audience was encouraged to laugh at the concept. I was not given an opportunity to respond at the conference, so I posted my thoughts at TAE and expressed them to Jim Puplava at Financial Sense Newshour. I posed a rhetorical question to Jim, asking if, given the generally dismal predictive abilities of economists, non-economists could possibly do any worse.

If we fast-forward to 2012, we find ourselves in the thick of a sovereign debt crisis in Europe, substantial deleveraging, spreading financial contagion, ineffective bailouts, widening credit spreads, tightening credit availability, deepening financial scandal and falling oil prices. It is absolutely clear that finance is in the driving seat once again.

Rubin acknowledges that his price forecast has not been realized, but he continues to argue, as he did in 2008, that high oil prices are causing the financial crisis.

Whatever happened to $200 oil?

If a mea culpa is in order, its roots can be found in the decision to underplay the demand side of the equation. Oil prices plunged to $40 a barrel after economic growth collapsed, taking global oil demand along for the ride. And that same movie is about to play out again. Recessions are already rolling across Europe. Economic growth in North America is lackluster, at best. Meanwhile, the spectre of sovereign debt defaults in the euro zone continues to hang over global financial markets. Added up, it spells another sharp drop for oil prices not because fuel is abundant, but because once again the world can’t afford to stay out of a recession. What happened to my forecast for $200 oil? Quite simply, the end of growth.

The inexorable build up to financial crisis has been measured in decades, with a smooth exponential rise in the money supply (i.e. inflationary credit expansion) in the post WWII period, while oil prices have been all over the map in that time. Did oil cause Europe to introduce a single currency with a highly flawed architecture for instance? Or cause a long period of negative real interest rates to bait a debt trap (leading, among other things, to huge housing bubbles)? Or allow banking to be deregulated so it could become too big to fail? I think not, at least not directly.

Energy is not the sole driver of events, at least not in the highly simplistic manner Mr Rubin suggests. Energy and human systems interact in far more complex and non-linear ways. Time constants for different kinds of change vary. Sometimes one factor is the key driver and sometimes it is another. The role of finance as a driver clearly cannot be ignored. Operating systems can take on a life of their own, in the sense that their own internal dynamics become a major factor in their own right.

Underplaying the demand side of the equation was indeed an error, but not in the sense that Mr Rubin mentions. The change in demand in 2008 was nowhere near large enough or rapid enough to trigger the price collapse at that time.

The crisis was entirely predictable to those who understand ponzi dynamics, however. Major bubbles act to bring demand forward during the expansion phase, at the expense of crashing it thereafter. In the last three decades of catabolic ponzi growth, we have probably burned our way through a century of demand. Leverage allowed us to borrow from the future, but deleveraging is now going to crash demand and asset prices.

In the case of oil, the effects of phase II of the financial crisis, and the coming demand crash, on oil prices will be exacerbated by a major shift in the perception of supply – from scarcity to glut, as a result of the unconventional oil fantasy. We covered this additional aspect in detail here at TAE not long ago in Unconventional Oil is NOT a Game Changer and in Peak Oil: A Dialogue With George Monbiot.

As we pointed out, unconventional fossil fuels and other low EROEI energy sources are caught in a paradox – they are unable to sustain a society complex enough to produce them. The additional supply will be minor and temporary, but the perception that we are suddenly swimming in oil will act to undermine oil prices further, to the point where such sources rapidly become uneconomic, which is exactly what we have already seen in natural gas.

Mr Rubin’s $225 price prediction for 2012 will be looking far more off-base in the relatively near future than it does today. If we do see that kind of price in the future, it will have to wait for the peak of the third boom and bust cycle, which likely will not even begin for several years (once massive deleveraging has run its course).

Mr Rubin’s view of the future remains at highly odds with our view here at TAE, although he has in some ways moved closer to our position. His view of energy driving finance suggests that once oil prices have fallen far enough, the economy will recover, until demand pushes up price once again and the cycle repeats. We, on the other hand, see no prospect of demand recovering for years, despite what should turn out to be historically low oil prices in nominal terms. Financial crisis is the driver, and will continue to be so for a long time.

Jeff Rubin has recently written a second book, in which he maintains that a lack of economic growth will be good for the environment, and that it will lead to a stable non-growing economy. To put it mildly, this is not our view at TAE. There is no such thing as a stable, non-growing society.

Stasis simply does not exist. It is not a mere lack of growth we are facing, but a very strong and prolonged period of economic contraction, as the demand borrowed from the future during the expansion years must be repaid. To say that this would be good for society or the environment is a bit of a stretch. True, we will emit less CO2, but financial crisis invites and entrenches escalating conflict, which is exceptionally hard on both the environment and society. Mr Rubin still appears to have little idea what we are truly facing in the coming years.

I find myself inclined to agree with the late 2010 assessment of Mr Rubin by Dan Gardner for the Ottawa Citizen:

Jeff Rubin is a guru you shouldn’t listen to

Jeff Rubin is an almost eerily perfect example of the sort of expert people should not listen to — but do anyway.

The foundation of Rubin’s fame is a correct call he made a decade ago. At the time, oil prices were low and stable. Most experts were sure they would stay that way. But Rubin became convinced the world was approaching “peak oil” — the point at which oil production would cease to grow and the price of oil would soar.

As Rubin predicted, oil prices started to climb in 2003. Up and up they went, to previously unimaginable highs. In the first half of 2008, oil topped $140 a barrel. Rubin and the few others who called the surge became media darlings.

… In November 2008, Rubin told a reporter that high oil prices killed the economy. Of course, this was well after the crash of the financial system, the global economy and the price of oil. I can find no record of him saying this beforehand.

The story he has told since then about oil prices yo-yoing the economy is — whether correct or not — an explanation he came up with only after the fact.

Not that any of this has humbled Rubin. Throughout 2009 and 2010, he forecast the return of triple-digit oil prices. It didn’t happen. But these flops, too, made no difference to Rubin’s confidence. He is as sure of himself as ever. And just as persuasive. How could he not be? He is supremely confident. He has a simple analytical story. And he is a superb communicator, in print and in person.

This is the stuff that satisfies the psychology of the audience. It is the stuff of which gurus are made.

Unfortunately, seminal research by University of California psychologist Philip Tetlock shows it is precisely this sort of expert whose predictions are most likely to fail.

Caveat emptor.

 

Home Forums Jeff Rubin and Oil Prices Revisited

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July 18, 2012 at 2:18 pm #8466

Nicole Foss

Harris & Ewing Hot Air 1938 "Goodyear Blimp at Washington Air Post, Washington, D.C." Jeff Rubin, former chief economist with Canadian bank
[See the full post at: Jeff Rubin and Oil Prices Revisited]

July 18, 2012 at 8:41 pm #4699

Golden Oxen

Nothing worse than a guru that is not humbled by forecasts made that are just plain wrong.
The MSM as usual is a major contributor to this ridiculous guru problem. Someone makes a correct call on something, they fawn over him and build him up on a pulpit of wisdom and infinite knowledge, and it continues for decades. Quotes of every utterance become blaring headlines trumpeted everywhere!

Soros Says!

Buffett Says!

Roubini Says!

Abby Cohen Says!

The fact that their last ten or twenty forecasts could have been totally wrong and missed the mark considerably means nothing to their worshipers, and the madness can go on for decades once they have been canonized GURU by the MSM.

July 18, 2012 at 10:41 pm #4700

davefairtex

If we anticipate a non-growing economy, we really need to change our debt-based money system that requires constant growth simply to survive. I wonder if that little nugget made it into the book.

July 18, 2012 at 11:47 pm #4703

Nicole Foss

When I spoke to him at ASPO he didn’t think debt was an issue (or the money supply, or the velocity of money). Neoclassical economists typically hold that view. Their model is fundamentally wrong, so it’s no wonder they can’t anticipate trend changes.

And as for gurus. I agree. Why anyone would want to be considered one is beyond me. Guruhood seems to come with ideas that are far too simplistic, which is why they catch on so readily. I prefer complexity and nuance. It’s more intellectual honest for one thing. The challenge is to embrace complexity, but to make it comprehensible. Gurus do soundbites. I never will.

July 19, 2012 at 3:05 am #4705

Jerry McManus

Not sure what folks here think of Michael Hudson, but I found this article quite illuminating:

The Weaponization of Economic Theory

“The result is a doctrine of financial war not only against labor but also against industry and government. Gaining the financial power to indebt economies at increasing speed, the banking and financial sector is siphoning resources away from the real economy. Its business plan is not based on employing labor to expand output, but simply to transfer as much of the existing flow of revenue as possible into its own hands, by capitalizing all such revenue into interest payments, on loans collateralized and pledged to creditors.”

July 19, 2012 at 3:08 am #4706

Jerry McManus

Hmmm…, no HTML in comments?

http://michael-hudson.com/2012/07/the-weaponization-of-economic-theory/

July 19, 2012 at 3:17 am #4707

skipbreakfast

I have noticed an undeniable change in tenor from the MSM’s favourite “inflationists” like Marc Faber, Jim Rogers and Doug Casey. They seem to be back-pedalling on a number of calls (such as US dollar collapse in 2012 and commodity prices going to the moon). It’s downright awkward to be honest.

In one interview, Doug Casey finally ends his fumbling justifications for the lack of hyper-inflation with his prediction that we’ll be saved by getting on spaceships and moving to Mars! Yikes. I think he just lost a little bit of credibility in my book. And I’ve seen Mr. “Print-Print-Print” Marc Faber fair no better in a few of his own recent interviews.

Anyhow, my point being many of these commodity super-bulls are starting to look plain wrong, and now they’re trying to cram some deflationary outlook into their story while trying to retain some dignity. Problem is the new story just doesn’t fit very well and they end up sounding like they’re all over the place, self-contradictory and confused. There is some loss of that shiny uber-confidence that these commodity hyper-inflationists shouted at me over CNBC for the past 3 years. (I’m especially talking about you Mr. “Shouty” Jim Rogers who barked at everyone like they were an idiot if they couldn’t see how perfectly obvious his commodity super-bull market and China infinite-growth outlooks were.)

What does it take to just say, “Oops, I think I was wrong”? Guess they depend on appearing infallible and so they cannot admit they are wrong on any count, let alone issue an apology. And being unable to admit that might be their biggest downfall in the long run.

July 19, 2012 at 5:11 am #4710

Viscount St. Albans

Stoneleigh,

If you’re going to parse someone’s historical record of pontifications about financial markets and their movements and their timing:

Don’t you think it might be wise to recall that old aphorism about casting stones and glass houses?

July 19, 2012 at 7:49 am #4713

everything

Oil is big, to me, it’s in the drivers seat, being used for so many more industrial purposes than ever before, we truck it, drill it, pump it, commoditize it, and make an awful lot of stuff out it these days. We are more than just addicted to it, the world would literally seize up without it.

I agree about economies being in flux, the markets in general, still up and down like a yo-yo, but also still in some kind of “parity mode”. Some people are still partying away like it’s 1999, others burned hard in 2008, are becoming more skeptical of these booms & busts.

July 19, 2012 at 8:11 am #4714

IanFraser

Viscount,

Perhaps it would be more useful to give a few specific examples of wrong predictions rather than make a general statement. Not only would these examples give a focus to a response, it would also validate your ‘generalisation’.

July 19, 2012 at 8:46 am #4715

TheTrivium4TW

Hi Nicole, another excellent article – thank you.

I agree with you about gurus… parties… movements…

The system creates groups so that it can then set them against each other while it conquers everyone within the system.

I value individualism and ideals like knowledge, wisdom, logic and, most of all, kindness and compassion. I sense a spirit in you that is blessed with all the above in good portion and I think we all are blessed to have both you and Ilargi sharing your insights as a revolutionary act within a world of deceit.

I would note that this credit bubble is actually the result of criminals breaking the law – search Section 2A of the Federal Reserve Act. I suspect you know this quite well, but choose “not to go there.”

But I will. ;-)

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

Regarding Viscount, I think he probably refers to Stoneleigh’s comments about the dead cat bounce probably lasting into 2010 or 2011 and recommending that one should sell their gold around $1,000 an ounce.

Stoneleigh would likely counter that she’s made it clear she is into predicting macro trends and not individual price movements and that she’s never even attempted to call a top in gold, rather, she’s just trying to get people prepared for the coming “crunch” of mega epic proportions and that trying to game the system and pick tops is a good way to get one’s head cut off in the end.

Rubin is a hack, IMHO and Stoneleigh has the “big picture” view down, even if she can’t gauge micro time frames very well (something that she really makes no attempt to do, BTW).

Again, she’s trying to get people ready for an economic collapse (engineered on purpose by Big Finance Capital criminals in control of your government – she won’t say it, but it is a proven fact and I’ll say it).

2-3 years too early is much, much, much better than 1 second too late. When this goes down, IMHO, nobody who is 1 second too late will argue, either – and they will wish they had sold out and protected their assets in cash as recommended by Stoneleigh.

My one question remains… what happens to our Treasury Direct money when the banks shut down and limit deposits… will they also limit Treasury Direct money as well?

I don’t know about anyone else, but I don’t think the “too late” moment can be too far down the road (but I suck at micro timing as well – so don’t go on my feelings).

July 19, 2012 at 8:49 am #4716

Barak

“Not that any of this has humbled Rubin.” Common symptoms of pride: it blinds you to your own errors, closes your mind to what others might have to teach you and makes you dig in your heals regardless of the evidence in front of you.

Beware of those who are incapable of swallowing their pride and changing course even when presented with new information.

July 19, 2012 at 9:16 am #4717

Viscount St. Albans

@Ian
There have been more than a few errors over the years.

Perhaps none more spectacular than her 2009 call predicting DOW @ 1000 (yes, that’s one-thousand) and S&P at 100 (yes, that’s one-hundred) by the end of 2010.

3 years later, those markets are merely 14X higher than her prediction. And yes, it was a prediction.

So to pick on Rubin that his oil number is about 2X off the mark, it all just seems a bit much. I’m all for claiming that you’re into macro trends and what not, but I don’t like the white-washing history bit that comes off as holier-than-thou.

Selective memory: Remembering, with crystal clarity, those correct calls, and then trumpeting them. And then, at the same time, getting rather forgetful about other items. In the long run, we’re all dead. And after 3 years, according to actuarial tables, some fraction of the readership has gone to the grave without any of the predicted fireworks.

July 19, 2012 at 11:09 am #4718

Nicole Foss

Viscount St Albans,

You misremember what I said back then. Look it up if you like. I said that I would be surprised if the Dow was above that level by that time, and I said nothing about the S&P. I have been surprised before, as all of us have no doubt. Market timing is probabilistic, so predictions are made on the balance of probabilities. When I talk about timing, I am looking at the ebb and flow of liquidity, and everything else flows from that because markets are not independent. They are all moving with the ebb and flow of confidence and therefore liquidity. I did not expect the counter-trend bounce to last as long as it did (into a rolling topping process across all markets beginning in May 2011). The fact that confidence held up for a little longer than I expected, and that other trends therefore continued their former trajectory for longer before reversing, is entirely immaterial to the outcome. It does nothing to invalidate the model of where we are going and why, and that is far more important than short term timing.

Notice, if you read what I wrote carefully, that I am not criticizing Rubin for his timing. If the issue was a minor one of timing, I would not have written this article at all. I do not nitpick. My point about his position goes far deeper. I am saying that his view of the world is fundamentally mistaken in almost every way. His model is wrong, his understanding of drivers is wrong, he extrapolates trends forward with no means of anticipating trend changes, he has no idea of large scale economic cycles or the role of credit and debt, he doesn’t understand collective psychology or geopolitics, and has no idea of the broader context, including ecological overshoot. He has a highly simplistic drum that he bangs again and again. When it conspicuously fails, he papers over the cracks with superficial justifications that do nothing to improve the predictive power of the model, even in terms of its one-dimensional task of predicting oil prices.

His abilities as a communicator are obscuring huge flaws in what he actually says. People like simple explanations and soundbites. They can relate to those far more easily than to nuanced complexity, and the resulting memes can be very catching. They can become entrenched very easily and are then very difficult to shift, despite multiple failures to explain important outcomes. Mr Rubin is very good at implanting incorrect memes into the public imagination, and is very handsomely rewarded for it. To each his own. I’ll stick with complexity in all its glory.

July 19, 2012 at 11:24 am #4719

Nicole Foss

TheTrivium4TW,

There is a risk with treasury direct, as with everything else. It is one of the least worst options at this point, but that doesn’t in any way mean risk free, or a long term bet. The point is that it is liquid, and that you could extract it fairly quickly if risks increase. Warning signs will be evident in advance if you know what to look for. Keep your eyes open for rising interest rates on short term US debt, because when those yields start to go parabolic, it’s the endgame.

Short term treasuries and cash under your own control are both means of preserving capital as liquidity. Each option has its own risks. In the case of short term government debt, the risk is that at some point the government will probably convert short term debt to long term then default on it later. I would argue that we are nowhere near that point right now, hence in the relatively short term the risks are lower than for most other things. be careful though, because risks will be everywhere no matter what you do.

As for gurus, they generate herding behaviour. This means that people jump uncritically on to their bandwagon, which then picks up momentum. Of course it always ends up over the cliff, like all swings of positive feedback. I want people to think about the foundations of everything and how it all fits together. Ideally they would read all the primary sources and make up their own minds, but few have time. I offer my view from a position of having done that over many years. People are free to accept it or not, or evaluate it themselves with more research of their own. There are no bandwagons here.

Also, as you say, there is more to life than knowledge – there is humanity and all the values that come along with it. At the end of the day, people will not care how much you know until they know how much you care.

July 19, 2012 at 11:27 am #4720

Nicole Foss

Jerry McManus,

I think Michael Hudson is great.

July 19, 2012 at 11:31 am #4721

Viscount St. Albans

Just to be clear. My misremembering is at the margins, and your opening sentence seems intended to obscure your admission.

Your 2009 comment was: You’d be surprised if the DOW was above 1000 (that’s one-thousand) by the end of 2010.

Do you agree that the comment was rather spectacularly off the mark?

Off by 3 years (since your original comment) and counting and a multiple of 13x.

13x is not a small mistake. It’s not a small surprise. Most scientists, when confronted by a measurement that is 13x off the mark, would re-examine their model. Or admit that their understanding has some very serious limitations.

I agree with your overall thinking. Yet I’ve always been bothered your tendency to dismiss and downplay your mistakes. The tendency to retrench into the mode of Stoneleigh the lawyer rather than Stoneleigh the analyst. Why not just say I got “X, Y, and Z” wrong in a big way. It’s rather like corporate, big brother, big mainstream media behavior to be so dismissive of past errors. The “balance of probabilities” phrase that you use when something didn’t come-out quite right always strikes me as newspeak. Referring to timing as Short-term, medium-term, and long-term can mean anything. They are very malleable terms. Is a 3 year duration short term or medium term? Is it medium term or long term? As you know, a 3 year duration can be whatever term you want it to be. Whatever you need to frame your argument. There is an element of lawyer here rather than analyst. I think that’s what irks me most.

The markets that are most meaningful to Americans and most financial analysts are the DOW and the S&P, and they reached new post-financial crisis nominal highs in March 2012 (not 2011, as you mentioned). Not a rolling top (again, that’s lawyer-speak working to frame your argument) — March 2012 marked a new nominal high (that’s objective reality).

July 19, 2012 at 11:37 am #4723

davefairtex

Viscount -

Prediction is a tough game. To be useful to someone attempting to place their savings in the right place, not only do you have to get the path right and the level (mostly) right, you also have to get the timing right as well.

Of course advising “cash” is usually safe in the near term – well unless you get a hyperinflationary outcome in the near term, and then of course its suicidal.

So I think instead of predicting dates & levels, its probably more useful to have if-then cases, which admits the possibility you could be wrong – wrong about timing, and even wrong about whether an event will take place. Along with that IF-THEN statement there should be a set of signposts to watch; indicators of how close that IF statement is to becoming true, as well as some trigger events to watch for.

For example:

IF the banking system collapses, THEN we should see SPX 400 relatively soon thereafter and cash would be the place to be.

Sample Directional Signposts:
* bank stock performance vs the overall market
* capital flight from peripheral economies to core economies
* interbank lending market freezing
* CDS spreads widening
* bank capital raises
* rising bank bond yield spreads vs sovereigns
* money + credit deflating
* manufacturing, consumer spending falling
* spreads between peripheral bonds & core bonds rising
* letter of credit availability shrinking
* deleveraging signs (commodity prices dropping, etc)
* likelihood of money printing (based on tea-leaf reading of the Fed/ECB statements)
* level of sovereign indebtedness

Confidence/Trigger Events to watch for:
* depositors losing money from bank failure
* unplanned sovereign currency devaluation or default

In this way it wouldn’t be about chest-thumping and saying how right we are and how this news article we found PROVES this, it would be more about really understanding in a more comprehensive way where we are today and how that compares with 2008, noting the current trajectory, and discussing the relative impacts of events on the model (and presumably also the real world).

Likewise, we could have a model for hyperinflation. An if-then statement, trigger events, directional signposts, etc.

If there was some way to take the ego out of it all, I’d certainly be happier. Ego definitely interferes with accurate assessment. Once you have determined how you think things will play out, confirmation bias rears its ugly head and down the rabbit hole you go.

July 19, 2012 at 11:54 am #4724

TheTrivium4TW

Viscount St. Albans post=4386 wrote: Just to be clear. My misremembering is at the margins, and your opening sentence seems intended to obscure your admission.

Your 2009 comment was: You’d be surprised if the DOW was above 1000 (that’s one-thousand) by the end of 2010.

Do you agree that the comment was rather spectacularly off the mark?

Off by 3 years (since your original comment) and counting and a multiple of 13x.

13x is not a small mistake. It’s not a small surprise. Most scientists, when confronted by a measurement that is 13x off the mark, would re-examine their model. Or admit that their understanding has some very strong limitations.

But Stoneleigh has… she is surprised by the continuing level of confidence and liquidity in the system… that wasn’t part of her original model.

She argues that her overall paradigm is correct, though – and I think she’s right.

I do see where Stoneleigh can be perceived as being a bit arrogant. For example, I think her POV is exactly correct, even if for slightly different reasons. She’d argue mechanics of the system (which is correct), but I’d argue that her POV benefits the criminal banking cartel, which is more FUNDAMENTAL than the system because they could – and would – change the system to benefit themselves.

This leads me to believe that deflation is a criminal Big Finance Capital choice (leaving the current system in place instead of changing the system midstream) rather than what Stoneleigh argues is the necessary outcome (assuming the system remains the same).

The point being – she comes off as certain (seemingly arrogant) based on current mechanics while I continually try and see how different outcomes could benefit the parasitic criminals at the top that would cause them to change the game and the outcome. So far, I think busting and asset stripping society is still the “go to” plan. If I’m right, perhaps confidence in mechanics is being misperceived as arrogance. Is someone arrogant for claiming 2+2=4 when Winston might believe it is 5 or is that simply confidence based on an in depth understanding of math definitions?

Anyway, I think your criticism boils down to Stoneleigh not correctly predicting the level and durability of societal mass delusion and acceptance of criminal activity and manipulation that has allowed the DOW to be 13x higher than she thought it would likely be much sooner.

I think she’d agree, but she’s much too nice and polite to say that in public. ;-)

July 19, 2012 at 12:29 pm #4725

skipbreakfast

Given the massive, unprecedented scale of the asset-price collapse that is coming, the ONLY prediction that is important is the one that gets you out of harm’s way. Staying in the markets to game another year or three of asset-price gains is playing Russian roulette with a nuclear warhead. The downside is far too great. If TAE was all about how to turn a profit in the markets, it might be open to this criticism, because timing would be important to profits. But I’ve never seen TAE claim to offer a route to riches or profits, only capital protection. The crux of TAE’s prediction is about crippling deflation, even when nearly no one else was in agreement. As such, TAE is only wrong if the asset-deflation doesn’t arrive.

Seriously, I’m not making excuses for anyone, but 24 or 36 or even 60 months of being off on the precise timing of a certain level of a stock index is nothing compared to the magnitude of what is really being predicted–that the entire index is at risk of dropping off a cliff. It’s so big, there is currently no risk worth taking unless you can afford to lose EVERYTHING. And most people clearly cannot. So TAE has said get out NOW, whether “now” was three years ago or one year hence. I continue to believe that for most people, that is the right advice. If you want to play the ups and downs in the markets in the near-term, good luck to you. You’ll need it.

July 19, 2012 at 2:04 pm #4726

davefairtex

skipbreakfast -

Thats a great perspective. Really what we’re talking about is essentially trying to assess the probability of a black swan. Well not a black swan per se, but the probability of a large step-change in the pricing of assets vs currency. In some sense, the market is in one of three states:
* around 100 SPX after a deflationary collapse
* in a “normal” range from 800-1400
* hyperinflationary, over 10,000

Stating the SPX level isn’t about predicting a particular price, but more about giving people a rough sense as to what the world will look like after such an event occurs. Of course if the event doesn’t occur, neither will the step-change in asset pricing.

Rubin is also talking about a step-change in asset pricing of oil, namely, a move from BAU to the global acknowledgement of a permanent decline in oil production and all the implications of that. To date, neither events have occurred, and so no step-changes in asset prices have happened yet, and so as a result everyone looks a little silly.

For those of us who aren’t as certain about the eventual outcome, its helpful in terms of reinforcing belief (and convincing our relatives to build those Arks) to understand the factors involved in assessing the near term chances of this happening – IOW measuring the current level of pressure on the system and which way things seem to be leaning.

Another way of looking at this is: you’ve decided to cross the Atlantic to New York in 1912 with your Mom. Do you take action (and alarm your Mom) when:
* you read in the papers that they think the Titanic is unsinkable
* once onboard, you realize there aren’t as many lifeboats as there are passengers
* you notice the ship is steaming into an ice field at 20 kts at nighttime
* you feel a bump at night and the ship stops
* the crew asserts that all is well and tells you to go back to your cabin
* you see a few lifeboats are launched “as a precaution” but only half-full because its COLD out there (and Mom really doesn’t like cold)
* you see people start seriously running for the lifeboats
* you notice the ship starting to settle
* you are swimming!

July 19, 2012 at 5:51 pm #4727

gurusid

Hi Folks,

Of course it all depends how you cut the cake. It might be a case that instead of right and wrong, we might have neither right nor wrong.

In terms of simplifying what could be loosely called a systemic approach, we have three major systems in play here: the economic (in terms of money); the energetic; and the environmental (resources/pollution – input/output). as Ayers and Warr have pointed out, there seems to be a strong ‘correlation’ (note correlation does not equal cause) between the amount of ‘physical work’ extracted from energy and economic growth. That the amount of available energy has for the last three hundred or so years been increasing cannot be denied. This has allowed the correlating (again correlation does not imply cause) extraction of resources from a finite environment. One of the biggest and key resources is the source of ‘physical work’ – fossil fuels. Regardless of cause or effect there will be a strong correlation between ‘physical work done’ and economic growth/energy used. Whether it is the body economic ageing and dying hence using less energy or that it is the body economic being starved of energy and hence dying can be argued to infinity, as IMHO the ‘causative’ elements are too complex and chaotic to be discerned. All we have is ‘correlation’. Yes depressions have happened before and we are it appears also in a deflationary period. But what is unique NOW (and few realise?) is that we are in a ‘correlating’ age of resource depletion; not just in terms of energy but many other vital resources such as soil and water.

Add to this the final ‘correlated dynamic’ of continued increase in human population and we do indeed find ourselves in ‘interesting times’.

BTW, ‘guru’ in my pseudonym of ‘gurusid’ is an acronym: gee (g) you (u) are (r) you(u) sid – many meanings on many forums but here perhaps the most pertinent is the 1980′s uk ad for ‘gas shares’ (privatisation of former state owned British Gas) “…if you see sid tell him”.

Besides pundit is the term I think your looking for, in sanskrit the term guru is given to one who is a spiritual teacher and has ‘experience’; and pundit to one who has studied and has ‘learning’. The western usurpation of the term ‘guru’ to designate ‘celebrity’ (charismatic or otherwise) is I think left better defined by the latter… a true guru is anything but.

L,
Sid.

July 19, 2012 at 8:10 pm #4729

william

So I looked up this guy and did some considering and listening. I like some of what he is stating and parts of what he is thinking is true. It should be noted that the statement I found was (paraphrasing) oil will be $200 by 2012, if not it will be because the world is in a recession.

Is it a credit crisis or is it an oil crisis? Really if you look carefully it is much like a chicken and the egg concept. Banks lent out more than should based on plentiful oil. So I am not sure anyone can separate which is the driving force because they seem to work in sync. If things get bad oil drops in price quickly. If oil goes up in price things get bad.

Clearly he is off in thinking capitalism will become ecological minded with carbon credits. I am seeing more clearly what carbon credits are – they are a superficial front to keep going towards destructive development and are currently ultimately failing today.

July 19, 2012 at 8:45 pm #4731

CJ in VT

That was a lovely post, thank you.

I have a general comment that I hope you’ll address at some point. The Transition Towns movement has linked peak oil, climate change, and financial collapse. There seem to be other ideas that mesh nicely with those:

Permaculture;
Low carb/paleo diet [how's that going Nicole? I'd love an update - I'm down 20lbs, halfway to my goal];
Aquaponics (the only topic TAE hasn’t mentioned at all);
I’ll tentatively add the Occupy Movement/Libertarians which have some interesting overlap.

So my questions are:
Am I missing anything? [I'm already off grid, raising animals, and so on]

Do these all fit together nicely because they deal with the end of growth [possibly linking the question to the post at hand]?

I’d create a thread but I’m not really sure what to call it. I think the new TAE site is trying address/link some of these but I’m not sure it’s there yet.

There’s a religious quality to these ideas – especially when the various “sects” argue over the details.

July 19, 2012 at 8:48 pm #4732

Otto Matic

First of all, The Market, as Max Keiser has shouted for years, is rigged.

It is Rigged Market Capitalism. Totally.

Anyone at this point who takes any number the equities’ markets post at in the MSM whores are themselves not to be taken seriously.

The Dow and S&P reflect nothing but the Fed’s pumping credit into ‘the markets’ through the back door.

Your precious quoted ‘markets’ are a Casino Gulag.

A friend sent me this:

“Charles Ponzi should get a posthumous Nobel Prize for Economics.

The world has been run on economic principles devised by him for many decades now.

He is far and away the most influential economic thinker.”

Yoa Viscount, your touting ‘markets’ and numbers that are fake to the core is a sign of your cluelessness about the accuracy and ‘truthiness’ of the financial ‘press’.

The ‘market’ is held up at the level it is currently at and at every point it’s been at for years with Pure Fraud.

Spare us your reverence for ‘market’ level Faux Facts spewed out by Pressitutes, which you seems to be a Big Believer in.

Get over it, your Dow and S&P numbers are rigged worst than a Vegas casino and will disappear in an instant at the stoke of a key.

High frequency trading by front running Wall St banks, who having servers BETWEEN you and the trading floor of both Rigged Dow and S&P ‘markets, account for 85%+ of all ‘trades’ of the two fake ‘exchanges’.

You sound like you believe the ‘numbers’ in the same way as what James Kunstler refers to as “the Jiminy Cricket syndrome”—a childish belief that any outcome we want can be had just by wishing for it.

hahaha

Dream on baby!

July 19, 2012 at 9:51 pm #4734

ashvin

Jerry McManus post=4371 wrote: Hmmm…, no HTML in comments?

http://michael-hudson.com/2012/07/the-weaponization-of-economic-theory/

Hey Jerry,

HTML tags have to in brackets rather than <> tags, i.e. [insert html here]

July 19, 2012 at 10:13 pm #4735

ashvin

TheTrivium4TW post=4389 wrote:
I do see where Stoneleigh can be perceived as being a bit arrogant. For example, I think her POV is exactly correct, even if for slightly different reasons. She’d argue mechanics of the system (which is correct), but I’d argue that her POV benefits the criminal banking cartel, which is more FUNDAMENTAL than the system because they could – and would – change the system to benefit themselves.

This leads me to believe that deflation is a criminal Big Finance Capital choice (leaving the current system in place instead of changing the system midstream) rather than what Stoneleigh argues is the necessary outcome (assuming the system remains the same).

So according to your BFC criminal cartel model, could the Owners simply maintain the status quo financial capitalist system for the next 5, 10, 20 years if they wanted to? Could they keep the masses confident in the banking system, the international bond markets functioning smoothly, the mercantile countries exporting, the debtor nations consuming, etc.? If not, then we must necessarily place a limit on their power to produce specific outcomes.

I’m not saying that many of the current crises were not anticipated and/or planned by groups of elites, or, even more obviously, that they are benefiting from these crises in many different ways. But it seems very unrealistic and counter-productive to me when we assume these already powerful people and institutions are borderline omnipotent. Instead, I am confident that there will come a time when they are rendered nearly impotent, and how soon that time arrives is ultimately up to the rest of us.

July 19, 2012 at 11:42 pm #4737

SteveB

Viscount–the markets are illusory. Asking TAE (or Nicole in particular) to frame things within an illusion would help whom?

Taking that a step further (back), money–exchange, really–is illusory. Framing things within that illusion is the biggest lie we tell ourselves. (Of course, there’s probably something about death that tops it.) It just happens to be the biggest picture frame most people can see. Daniel Quinn wrote of ‘stepping back’ to Mars in order to see humanity from the outside. It’s a useful thought experiment.

July 19, 2012 at 11:49 pm #4738

Nicole Foss

Viscount St Albans,

I have no reason whatsoever to change my view of reality. Nothing I said hinges on the specifics of timing. I suggest you think about the implications of what I am predicting and prepare for a very different world rather than trying to game the system for a little extra profit. The prudent would be on the sidelines in cash already, and if they have their house in order early, so much the better for being able to sleep at night. We do not exist to make you money. If that is what you are looking for, feel free to look elsewhere.

Market timing is always probabilistic. Get over it.

We most certainly did see a rolling top. The trend change began in May 2011 and we have seen a series of tops in different markets since then.

Can you honestly not see the bright red flashing warning lights in the global economy? They are very clear to me.

July 20, 2012 at 1:46 am #4740

bluebird

Most everyone that I know, do not see the bright red flashing warning lights in the global economy. They have come to believe that the best way to create wealth is investing in the markets via dollar cost averaging. Also that while markets go down, they believe that over time, staying in the markets will increase one’s wealth. A sister has told me that she refuses to get out of the markets because she will miss the gains when the markets go back up. This same sister couldn’t believe my money was in a credit union that earns a pittance. She asked why I didn’t put my money elsewhere. And I told her it was more important to preserve my principal rather than losing 50% when the markets go down. These people just don’t get what’s coming.

Edit – And a credit union, or even Treasury Bills, is for the short term. Long term there is nothing safe.

July 20, 2012 at 1:49 am #4741

SergioI

thanks Stoneleigh, lasts 3 posts have been very clear, It’s the most convincing lookout for me of how things are going to role out. Cheers from Mexico, where elections just passed, all candidates where preaching on nonsense economic growth and society is wishful thinking that we have to continue growing in the sake of progress.

July 20, 2012 at 2:39 am #4742

draego454

>> Mr Rubin’s $225 price prediction for 2012 will be looking far more off-base in the relatively near future than it does today.

I’m sad when people who fundamentally understand and accept the concept of Peak Oil get wrapped around the axel on issues of timing. These days, isn’t it rare enough to find someone who at least understands the problem, that we don’t have to work the Us/Them angle on the quality of their timing predictions? And face it, Peak Oil as a discipline – all of us combined – have no ground to go around bragging about the timing predictions that we’ve given to society at large.

If someone even accepts that Peak Oil is a valid theory, then that’s 90% of the battle for me. He could be worse – he could be a Yergin.

Steven in Dallas

PS: My new insult, “Don’t be such a Yergin!”

July 20, 2012 at 10:50 am #4747

TheTrivium4TW

ashvin post=4400 wrote: So according to your BFC criminal cartel model, could the Owners simply maintain the status quo financial capitalist system for the next 5, 10, 20 years if they wanted to?

I don’t see how they could – the reason being that the mathematical limits on the current system appear to be stretched to the limit. The point I’m trying to make is that “The Owners” are the reason this system exists in the first place and they understand the mechanics and use them to their advantage.

*If* they wanted to change the rules and, therefore, the mathematics of the system, they could – who would stop them? I believe the current system is operating exactly as they want it to, so why would they change it? They wouldn’t. But that doesn’t mean they could not change it. That’s the distinction.

For example, they could mint $50 trillion debt free coins and hand them out to, equally, to every citizen in the country.

You do see how that 1) is possible and 2) would destroy the deflation / societal asset stripping argument, right? They won’t do that – not because they can not do it, but because it doesn’t serve their interests (which aren’t the common person’s interests).

ashvin post=4400 wrote: Could they keep the masses confident in the banking system, the international bond markets functioning smoothly, the mercantile countries exporting, the debtor nations consuming, etc.? If not, then we must necessarily place a limit on their power to produce specific outcomes.

All else being equal… of course. But it need not be equal. As mentioned above, they could mint $50 trillion in debt free coins and hand them out equally to everyone in the entire country or they could hand them out in proportion to the debt one was in… either way… it’s a *game changer* compared to the status quo.

ashvin post=4400 wrote: I’m not saying that many of the current crises were not anticipated and/or planned by groups of elites, or, even more obviously, that they are benefiting from these crises in many different ways. But it seems very unrealistic and counter-productive to me when we assume these already powerful people and institutions are borderline omnipotent.

Ashvin, that’s your interpretation, not mine. I do not think these people are omnipotent or even borderline so. However, they do have immense power and they have an agenda and the world continually moves in the direction of enriching them and increasing their power as it impoverishes everyone else and reduces everyone else’s power.

Where, exactly, do you think that ends up?

ashvin post=4400 wrote: Instead, I am confident that there will come a time when they are rendered nearly impotent, and how soon that time arrives is ultimately up to the rest of us.

While I hope you are right, I’m nowhere near confident that you are right. As it stands now, the average person defends the oligarch systems of oppression and they likely won’t “get it” until they are homeless and starving.

Is that too late to “get it?”

I hope not.

The problem, as I see it, is that people lack empathy and concern for others (and even themselves, ultimately, but they don’t know it yet!) to take ACTION BEFORE THE HELLFIRE ACTUALLY BURNS THEMSELVES. IMHO, that’s too late.

I highly recommend watching The Ultimate History Lesson with John Taylor Gatto (3 time NY state teacher of the year, skip the first 17 minutes or so if you are so inclined):

https://www.youtube.com/watch?v=YQiW_l848t8

There are 5 parts, so keep clicking through.

In addition, I highly recommend you listen to the following audiobook:

Disciplined Minds
A Critical Look at Salaried Professionals and the Soul-battering System That Shapes Their Lives, by Jeff Schmidt (2000)

http://www.unwelcomeguests.net/Disciplined_Minds

I’m only through the first 6 chapters, but the information and viewpoint presented up to this point would be worth the entire book – I’m sure more goodness lies ahead.

I haven’t listened yet, but next on my audiobook list is:

The Underground History of American Education
An Intimate Investigation into the Prison of Modern Schooling, by John Taylor Gatto (2001)

http://www.unwelcomeguests.net/The_Underground_History_of_American_Education

I don’t have all the answers, but I do see the results of the system in which we live.

For example, I see a Federal Reserve System that has criminally broken its own statute for 25+ years running and lies about it to cover it up.

No media covers the crime biggest non World War crime event of human history – not even Stoneleigh will touch it. She’s far to intelligent to deny it, though – it is simply off limits.

Call it self censoring.

How does the evil system cause someone as gifted and good as Stoneleigh to self censor? Not just Stoneleigh, but Ilargi as well? Not just those to, BUT NEARLY EVERYONE! It is trivial to prove beyond all doubt and back… it is the root cause of the Greatest Depression… but it is, apparently, off limits.

Why? How? It isn’t an accident… it benefits Big Finance Capital and it hurts the average citizen… will eventually murder 100s of millions, if not a billion people.

What causes a highly intelligent and compassionate law student bent towards social justice to just *accept* the criminality that ultimately will lead to the Greatest Depression human history has ever seen?

Because I’m livid about it – and it is awful lonely being livid because nobody else seems to be able to acknowledge the root cause, let alone give it a second thought.

As a process engineer, I know very well that if you don’t address the *ROOT CAUSE*, you haven’t fixed the problem.

The Rockefeller and Carnegie Foundations created teacher pensions – BUT ONLY IF THE TEACHERS TEACH THEIR CURRICULUM. Of course, they all line up to teach their curriculum – who doesn’t want “free money?” The cost? Nobody bothers to ask – the money is flowing… the fraudulent gains of a debt based treasonous monetary system, that is.

The average MD doctor thinks putting toxic waste in the water is equivalent to “mother’s milk” when the EPA scientists oppose it (few of them even know this, of course – the system is rigged) and point out that no solid research supports the practice and lots of research indicates it is detrimental to the health of the population.

WHY EPA HEADQUARTERS UNION OF SCIENTISTS OPPOSES FLUORIDATION

http://www.nteu280.org/Issues/Fluoride/NTEU280-Fluoride.htm

Do you, an intelligent, compassionate person, still slurp down your Big Finance Capital Central State sanctioned toxic brew (including lead, mercury, radioactive isotopes) without even knowing why?

It is linked to reduced IQ over long exposures… do you think Big Finance Capital benefits when older, experienced people lose their mental faculties and then have to surrender what little wealth they’ve accumulated to the Big Finance Capital sick care system to “care” for them?

I have no doubt that the manipulation and control of the system requires our consent… even if misguided… but how does it get our consent? How does it deceive otherwise bright people?

I don’t know exactly, but I do know that it does.

So this crowd has incredible influence and power and the common person either can do nothing about it or believes they can’t do anything so they don’t even try… they give up and then the [D]elites have even more control over the system and use it to oppress even more people in ever diverse ways.

It is happening. Period.

PS – They feed you untested for human safety GMO “pesticide” food and you guys can’t even muster the effort to speak out against that kind of corporate corruption… you just sit back and accept that others control your food supply and tell you that your ignorance is best… not being able to complain any more than a cow can complain about his food to the farmer.

They exert incredible control over people because no rational, free minded, independent person would every put up with that BS!

“A really efficient totalitarian state would be one in which the all-powerful executive [Big Finance Capital that sponsors politicians] of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude. To make them love it is the task assigned, in present-day totalitarian states, to ministries of propaganda, newspaper editors and schoolteachers…. The greatest triumphs of propaganda have been accomplished, not by doing something, but by refraining from doing. Great is truth, but still greater, from a practical point of view, is silence about truth.”
~Aldous Huxley (whose brother was a high up United Nation’s big wig and Big Finance Capital minion)

July 20, 2012 at 11:53 am #4748

Raúl Ilargi Meijer

Trivium

It’s time to shorten your comments. And we’ve seen enough references to the ultimate history for now.

July 20, 2012 at 12:36 pm #4749

backwardsevolution

Otto Matic – I totally agree with you. How could Stoneleigh have predicted the level of fraud and corruption, the accounting rule changes, LIBOR rigging, and on and on? Who could have foreseen this unprecedented intervention?

Viscount, on an intuitive level, you know she’s right. If not for the intervention, she would have been right long ago.

Stoneleigh, another brilliant piece! Thank you.

“… his response was to call my boom and bust model “a bastardized form of monetarism that could only have been derived by a non-economist”. The audience was encouraged to laugh at the concept.”

He pulls rank and laughs – what a jerk!

July 20, 2012 at 5:44 pm #4750

Hircus

ashvin post=4400 wrote: I’m not saying that many of the current crises were not anticipated and/or planned by groups of elites, or, even more obviously, that they are benefiting from these crises in many different ways. But it seems very unrealistic and counter-productive to me when we assume these already powerful people and institutions are borderline omnipotent. Instead, I am confident that there will come a time when they are rendered nearly impotent,and how soon that time arrives is ultimately up to the rest of us.

I agree with you, Ashvin. And when that happens, it’s the “emperor has no clothes” moment. And that’s when everything TAE has been predicting will happen, possibly very fast, too.

July 20, 2012 at 9:07 pm #4751

JoeP

Ilargi wrote: It’s time to shorten your comments. And we’ve seen enough references to the ultimate history for now.

Triv,

I don’t think your comments are too long – you should see how long some of Ashvin’s fundy comments are at The Diner :woohoo:

…and there is absolutely no censorship there. You should make a visit:

http://www.doomsteaddiner.org/blog/

July 20, 2012 at 9:47 pm #4752

ashvin

TheTrivium4TW post=4412 wrote:
For example, they could mint $50 trillion debt free coins and hand them out to, equally, to every citizen in the country.

I disagree. They may have been instrumental in creating the system, but they can’t simply change the most basic rules without changing the entire system. That means they are being forced in a certain direction in order to maintain their grip, i.e. more centralization/consolidation of wealth, more intervention/regulation of markets, more explicit handouts to the elite class, more extraction of wealth from workers/taxpayers and mid-level owners of assets, more police state repression, etc., basically – more complexity to maintain complexity. I believe that forced path will eventually lead them to a steep cliff somewhere, with nowhere left to go but down… way down.

Call it self censoring.

How does the evil system cause someone as gifted and good as Stoneleigh to self censor? Not just Stoneleigh, but Ilargi as well? Not just those to, BUT NEARLY EVERYONE! It is trivial to prove beyond all doubt and back… it is the root cause of the Greatest Depression… but it is, apparently, off limits.

Why? How? It isn’t an accident… it benefits Big Finance Capital and it hurts the average citizen… will eventually murder 100s of millions, if not a billion people.

What causes a highly intelligent and compassionate law student bent towards social justice to just *accept* the criminality that ultimately will lead to the Greatest Depression human history has ever seen?

Because I’m livid about it – and it is awful lonely being livid because nobody else seems to be able to acknowledge the root cause, let alone give it a second thought.

We’ve been over this too many times before… you are assuming that no one else knows about it because we don’t write about it every chance we get. That’s not true. We have written about it several times in the past, but we also feel our time is better spent on a regular basis writing about different aspects of what’s going on, including the ways in which the BFC is potentially losing control.

You are not lonely, Triv. As you well know, there are hordes of other people who have been saying what you’re saying for many years now. It is actually a very common argument, and there is a lot of merit to it. The problem is when you assert that anyone not making this argument on a repeated basis is somehow missing the point and being duped by the BFC into not caring enough. Do you really think we don’t know about the Fed, debt-dollar tyranny, fluoridation, academic/media corruption, and a million other related things?

It’s not self-censorship. Speaking for myself, I have decided there’s really no point parroting that same information over and over. Most people who read TAE are already aware of a lot of that stuff, and by focusing on it too much you miss the nuanced big picture that is actually unfolding this very moment. The elites have their tricks/tactics to not-so-subtly convince the masses of their own power/control over the direction of humanity, and we have ours to convince people that the elites are self-deluded and wrong – humanity can change it’s ultimate destination, one person at a time.

July 21, 2012 at 8:29 am #4761

John Day

Lovely Stoneleigh!
This is another case of perfect clarity on your part.
I really liked the line about expansions being resource driven, and contractions being financially driven.
There will be no resource to drive an expansion after the coming 2 decades of “conflict”, I fear.

July 21, 2012 at 1:02 pm #4766

snuffy

A excellent analysis..[I had a 200 word post I just erased..by accident.ouch.]

This is what TAE is…solid brain food..

Bee good,or
Bee careful

snuffy

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