Apr 162013
 
 April 16, 2013  Posted by at 12:40 pm Finance



Artwork: Ilargi for The Automatic Earth

The Nicole Foss 2013 tour of Australia is well underway, and since I'm not there, it's a bit hard for me to write about it. But we do keep in touch on a daily basis of course, so I know things are going well, with lots of good people, good ideas and good conversations. Though I will never understand, and yes, I know I'm biased, since we've been working together for years, why every single one of Nicole's lectures doesn't attract 10,000 or more listeners and spectators. Do people really need a fait accompli, do they have to watch a system collapsing in their rearview mirror, before they start paying attention in larger numbers?

Ironically, Australia has, at least at first glance, both one of the strongest looking economic systems left in the western world – though that won't last -, and one of the most open attitudes towards possible alternatives to that system. Mind you, when I say Australia, I mean a small subset of the population. Most people, not just in Oz but all over the west, even when they are ready to consider something beyond what they've been spoonfed, they seem to fluctuate towards and get stuck in Buy Gold! or Buy Bitcoins! or Buy Guns! much more easily than they do towards ideas that take more time to process and more effort to realize.

I'm happy with, and for, those that do turn up, but I do think people should think about why it is that we can’t make our message more sweet and easy and palatable: it ain't worth squat if you want it served on a silver platter.

If you think that what is required is merely a change in what passes for investment strategy, a move from bonds to stocks or precious metals or farmland or something, then you don't know what is going on in the financial markets or, for that matter, in your own lives. The "leaders" of our world, whichever country you live in, are not solving the issues that have led to the present crisis, they're not even trying. They are, instead, using your future wealth, and that of your children, to hide the fact that there is a crisis so profound they have no chance of solving it.

Your money is being used to make whole the gamblers who lost everything including the clothes on their backs and fronts and more, and because of that, pretty soon you will have hardly a thread left to wear. Buying gold or stocks will not save you. Period. The only realistic option you have is to reach out to those around you, or move to a place where such reaching out is potentially more promising if where you are now looks like a dead end, and establish a sense of community. You will need "your people" to make sure there is a minimum of essential skillsets in that community, as well as sufficient food, energy, shelter and other basic necessities.

Once you have that down, you can sit down and ponder what more you can do, and whether there's anything left in you in terms of money or energy or desire for flatscreen TVs. But only when you have all the basics down. Like where does your potable water come from? From a large centralized system that increasingly depends on high energy inputs to filter out increasing amounts of toxins? If so, are you comfortable with that? Are there alternatives, can you and your community seize – more – control? Would that make you more comfortable going forward? Some questions are easier to ask than to answer.

Unless you want all of your, and your children's, fresh food to come either from Monsanto or from China or both in the future, trying to seize control of basic needs is a very easy and logical first step. It doesn't matter how rich you think you will be, being dependent on 1000 mile+ long transport lines and/or scarce resources just to eat is never a good idea; indeed, it's an insidious level of madness, no matter how widespread it may be.

So as long as you have some wealth, virtual as it may be, use it to lessen your dependence on people you don't know (and on corporations) to feed your children. The world has never before been addicted to either food from the other side of the planet, or to food addicted to oil-based chemicals. Not until now, not until we started buying our basic needs in faceless supermarkets. Why then would these supermarkets be more than a mere passing fad? Because they represent progress? Monsanto is progress? Food from China is progress, when we could just as easily eat food from our neighbors', or, indeed, our own gardens?

Sure, you can gamble that the supermarkets you shop at and which are already often the only place in towns and cities to buy food and other necessities, will stay open indefinitely, first for you and later for your (grand) children. But if you do, don't fool yourself about how big of a gamble that is. The just in time delivery system that we are increasingly dependent on is by definition very vulnerable, since it lacks any and all redundancy and resilience: once the doors are closed, there will be nowhere else left to go to buy food.

Well, except maybe the people who didn't make the same bet that you did, and who instead tried to built a local food system that doesn't need all the thousands of food miles that make our present system so unnecessarily weak. But who says they’ll have enough left to sell to you? And what are you going to use as payment? When supermarket doors close, do you think bank machines will remain open? Why would they?

Those supermarket doors can close for all sorts of reasons that have nothing to do with you, what you might want or demand. Supermarkets are profit based operations, not salvation armies. If enough people in your hood get poor enough not to be interesting for Walmart or Tesco's or Aldi or Cole's bottom lines anymore, it'll be curtains, lights out, good night and good luck. And if enough hoods get too poor, the whole chain becomes unprofitable and folds.

Globalization is sort of harmlessly alright when it's limited to stereo's and fancy cars and phones. Those things you don't need in order to survive. When it comes to basic needs, it's a whole different story. But we've completely lost sight of the difference between the two. Everything's been globalized and outsourced, and anonymous financial institutions and corporations have both taken hold of our – no longer so – democratic political frameworks, and of the economic machinery behind our basic necessities. And if you think you can turn that around by voting for another party next time around, you're simply not getting it – yet.

And you should really, really, if you can, even if you have to make an major effort to do so, come and listen to Nicole Foss for a few hours. You will have that opportunity in Australia in the next few weeks, thanks to The Automatic Earth and to the tour organizers at Sustainability Showcase (thank you Kari and David), in Melbourne (April 21@ Fitzroy Town Hall), Adelaide (April 27@ Hawke Centre, UofSA), Perth (May 1 @ Perth City Farm), Margaret River (May 4 @ Tingrith Meeting House) and at additional venues, yet to be announced, for instance on the Sunshine Coast. Please go for all details to the tour's website, AutomaticEarthTour.org .

And for the vast majority of people, wherever you live in the world, who can't go see Nicole Foss live, I urge you to order the DVD set with her lectures, "A World of Change", for sale here at The AutomaticEarth.com.


Then, here's a wonderful podcast interview – with transcript – that Nicole did down under last week with Karl Fitzgerald at Earthsharing Australia in his series Renegade Economists. Thanks and kudos, Karl.

First, a few choice snippets:

 

Nicole Foss – Relocalizing the Trust Horizon

I don’t think you can reform [the finance system] – I think it’s beyond anybody’s control and history teaches that we have these large structures that rise and fall all the time. This is just our form of empire – our form of economic imperialism, and we’re going to see that collapse and then we will do something different.

I don’t think it is a question of reforming what is already there – I think it will collapse all by itself. We don’t really have to do anything about that, we just have to concentrate on building something that comes out of the other side.

So it is "how do we reboot the operating system?" – there's no point trying to build a better dinosaur, let’s be mammals. The dinosaurs are going extinct anyway, no matter what anybody does. So let’s concentrate on building new systems of government from the bottom up – new systems for money, new operating systems. [..]

I think we’re going to have something that’s actually based in something other than just faith, which is going to look like plain vanilla financing in comparison to what we’re used to.

What we’re used to is financial innovation and those are two words that should never be in the same sentence because it only means Ponzi scheme. So we’re going to outlaw a whole lot of Ponzi dynamics, and move into something that’s much more grounded in underlying real resources.



File Download (27:56 min / 13 MB)



KF: Nicole, in terms of systems thinking, how does The Automatic Earth function?

NF: Well, basically the idea is to look at as many different subsystems of reality as possible and understand how the system works – what the time constants for change are in that particular system, and that allows you to prioritize which systems are going to be the key drivers at what time. Then the idea is to integrate those subsystems and get a picture of reality. We prioritize finance because finance has the shortest time constant, so it is going to be hurdle number one over the next few decades. Then, we would look at energy as being hurdle number two. Then we would look at resource shortages, carrying capacity, population, pollution, climate, psychology, realpolitik and all manner of other things – so the idea is to have the biggest possible "big picture" so people can navigate their way through a time of uncertainty and upheaval.

KF: In more detail, explain why finance is first cab off the rank.

NF: Because the world of finance is mostly virtual, and the time constant for change in virtual systems is really short. So what happens is when you reach a limit in finance – and these limits are endogenous, you don’t need to trigger an event – you reach a limit in finance, and the changes can be extremely rapid. So if you look at what happened in Cyprus for instance, in two weeks they went back 50 years – they went from being a modern economy to having the banks closed, the ATMs empty, the shops shelves mostly empty, a cash-only economy, capital controls, and the value of these banks went from their full value down to next to nothing in a very short space of time. And so when you have the value of human promises suddenly disappearing, you crash the system.

So the money supply is mostly credit – the vast majority of it is credit, which just means human promises to repay – these have value as long as we believe the promise. As soon as we stop believing the promise, the value goes away all at once. Then you can end up with a tiny fraction of what was previously your money supply. Then because there is no money in circulation, – and money is the lubricant in the engine of the economy, like motor oil is the lubricant in the engine of your car, -because there is no lubricant, the engine seizes up on you. You can’t collect buyers and sellers, producers and consumers, and you have an economic depression. So, because this can happen so fast and it is a very large impact, it amounts to crashing the operating system. When you crash the operating system, you can’t do anything with your resource base until you reboot the operating system. That’s really what these periods are, and this is why it’s the first hurdle because it simply happens so quickly.

KF: How then can we look to reform the finance system when we’ve essentially forfeited democracy to these banksters?

NF: I don’t think you can reform it – I think it’s beyond anybody’s control and history teaches that we have these large structures that rise and fall all the time. This is just our form of empire – our form of economic imperialism, and we’re going to see that collapse and then we will do something different. But, I don’t think it is a question of reforming what is already there – I think it will collapse all by itself. We don’t really have to do anything about that, we just have to concentrate on building something that comes out of the other side.

So it is "how do we reboot the operating system?" – there is no point trying to build a better dinosaur, let’s be mammals. The dinosaurs are going extinct anyway, no matter what anybody does. So let’s concentrate on building new systems of government from the bottom up – new systems for money, new operating systems. That tends to be my focus – I would say that all the large scale things will not work when you have a very large scale economic contraction, because trust determines effective organisational scale. You lose trust when the economy contracts – you lose political legitimacy at that high level of organisation, so those things over time go away anyway, and then you need to work at an effective organisational scale that’s much smaller and reboot the operating system from there.

KF: You’re talking about resilience there and creating resilience at a local level. How does that flow through then in terms of practical outcomes? You’re talking about money and creating new ways of creating trust. What are you proposing on the monetary front?

NF: Well, basically we would have to go through a similar kind of process to the way money developed in the first place because money is an emergent property of scale meaning that as you scale up the size of your society you have to have more sophisticated mechanisms for exchanging value. So initially you would go from, say, a gift economy to perhaps time-banking. When you get large enough that you don’t know everybody personally, it is hard to have just a gift economy, so you start keeping track of who has put what hours into the system. You get a little larger and you would be looking at some kind of currency to allow you operate more efficiently so you don’t have to work out how many eggs a bunch of bananas is worth and things like that – you have some abstract mechanism for exchanging value.

When you scale up to a great extent, now you have to move away from the personal into the transpersonal, so you have an institutional framework instead, and the trust that is surrounding the monetary system goes from being placed in people to being placed in the institutional framework. So that’s where we are now – we have a very large scale institutional framework that did enjoy political legitimacy. I would say it’s going to lose that. We have to start from the bottom up again and go through a similar progression depending on what scale we’re trying to operate at. So I would say we’re going to be looking at things like time-banking, the exchange of time with no need to exchange money, things like local currencies, so that when the main currency has ceased to be available or has ceased to function because the institutional framework is breaking down, then we have some other form of currency that functions to support the velocity of money and the availability of liquidity in a local economy.

And each local economy would have to do that for themselves. Then I think we are going to scale things up again to something that’s going to be a currency backed by some kind of commodity, whether it’s precious metals or energy or some other form of resource. I think we’re going to have something that’s actually based in something other than just faith, which is going to look like plain vanilla financing in comparison to what we’re used to. What we’re used to is financial innovation and those are two words that should never be in the same sentence because it only means Ponzi scheme. So we’re going to outlaw a whole lot of Ponzi dynamics, and move into something that’s much more grounded in underlying real resources, I would say. So it’s a question of scaling things up again from the simple to the more complex, getting to the point where the trust allows you to maintain an institutional framework that actually works, and I think we will go through that progression over a number of years.

KF: You mentioned there outlawing the Ponzi game. Behind that sits the very profitable return on investment that certain forms of business activity encourage and deliver. How do you feel that would play out?

NF: Well, basically what happens in periods of speculative activity – when you have a speculative bubble like we have had this time, returns to speculative activity get very much larger, so the returns to capital are much larger than the returns to labour, and you get more and more rewards for speculation in comparison to actually doing any kind of real work. So, speculation becomes a parasite on the real economy, but eventually you reach a limit in terms of your speculative bubble, which is where we are at the moment. Then that bubble will burst and you go back to something that will be a lot more grounded in real work, but the returns on investment will be a fraction of what people have come to expect, because typically these high returns that people are looking for are all grounded in speculative activity. And in fact these high rates of return, relatively speaking, are a reflection of the risk of the underlying business, but they fail to accurately reflect that risk. In other words, when you chase yield, you are chasing risk, but that yield is not adequate compensation for the risk that you’re taking.

So you actually run the risk of losing all the income and all the capital – that’s one of the major problems that you have in a financial crisis – the people who’ve been playing the Ponzi scheme lose everything. So for the people who have been working more in the real economy, especially where things are based on essential goods and services with local supply chains and local distributions networks, there is no reason that shouldn’t continue. You may have a sticky patch when customers don’t have any money for a while, but it is much more resilient and robust if it’s local and it’s not part of the speculative economy. But people who do things like that are going to be accepting very low rates of return – very low margins in comparison to what people are used to, but that’s a reflection of less risk.

KF: So your hopes to reform this speculative bubble revolve around self-destruction on behalf of the rent-seekers, is that what you’re saying?

NF: Yes, well, that’s baked in the cake, pretty much. When you have an enormous credit expansion, it is going to implode because you build an enormous pile of promises that cannot possibly be kept. And what this means is everything is under-collateralised – you have this tiny little bit of collateral and this massive amount of loans that is backed by this small amount of collateral. What this means is we’re all playing a giant game of musical chairs. There’s about one chair for every hundred people playing the game. As long as we’re all up and dancing we don’t notice how few chairs there are, but when the music stops, the people best positioned to understand the rules of the game are going to grab a chair.

Everybody else’s claims will disappear because they were excess claims to underlying real wealth – they were virtual wealth, not grounded in anything real, and so you have this crash. Now, lots of people who hold excess claims to underlying real wealth are currently very wealthy people, so that whole rentier economy I think is going to implode and a lot of the games will end up in the hands of wealthy people but by no means do all wealthy people come out of this looking particularly good, because they are often in a position to have their assets most at risk, all in financial assets that could be revalued at pennies on the dollar from one day to the next. People with real physical assets are likely to be considerably better off.

And in fact, one of the things I’m trying to do – understanding that I can’t get any more wealth out of the collapsing the Ponzi scheme that was going to come out otherwise –, what I’m trying to do is redirect it. By teaching ordinary people how the economy works, I’m trying to make sure that some of what comes out of the collapsing Ponzi scheme ends up at the base of the pyramid in the hands of ordinary people who are best positioned to do something with it. Otherwise it will all disappear into the back pockets of bankers or disappear into a giant black hole of credit destruction. So I do think that the bursting of that bubble is absolutely baked in the cake at this point – you can’t prevent it, you just have to see it coming, prepare accordingly, and then work through the crunch period and try and get something better at the other side.

KF: I remember hearing you, post-the global financial crisis, being one of the first to really talk about the role of deflation and from that there would be a falling money supply and this would impact upon each other and from that there would be an extended recessionary period. Whilst that has played out in America, it has been fascinating to see the disjoint between economic theory and practice in terms of the extortionate amount of money that is being printed into the economy, and I’m just wondering how this money printing phenomenon is playing out into your forecasting of future trends.

NF: It’s not changing anything at all because if you look at what they’re doing they’re not printing money. Nobody has a printing press and is generating physical currency. What they’re doing is monetizing debt. So they’re attempting to engage the engines of credit expansion, like fractional reserve banking and securitization. They’re putting money into the banking system in the expectation that this will then be lent into real economy, that we’ll have a multiplier effect in the inverse proportion to the reserve requirement, and then that will go through another engine of securitization. So it would be, if it worked, a way of reigniting the Ponzi scheme of credit expansion, but it only works if you have willing borrowers and lending.

Because the engines of credit expansion are breaking down – the lenders are coming to understand about risk, the borrowers are mostly maxed out anyway, – what’s actually happening is the banks in the United States are taking that bailout money that they are being handed by the Federal Reserve and putting it back on deposit with the Federal Reserve, so it is not getting out into the real economy, it’s having no multiplier effect whatsoever, and in any case, even though those numbers look very large, they’re absolutely trivial in comparison to the outstanding debt. So it’s really not going to have any effect at all. They would like you to think that they have the control over the monetary system that they imply that they do, and that they have the ability to inflate the currency because the last thing in the world they want you to think is that it might be a case of deflation, where the banks might close and there might be another Cyprus.

The minute a critical mass of people start thinking that then the game will be over, so they don’t want anybody thinking that – they would rather you think nobody in their right mind should hold cash because they’re just going to print money like there’s no tomorrow, so your cash won’t be worth anything, so you might as well go out and get in debt up to your eyeballs and have a house and fancy cars and everything else. This very much suits the agenda of the powers that be because it keeps people from understanding what the real risks, keeps using those people as engines of credit expansion in a very predatory way and is going to leave that whole generation of people as empty bag holders when the Ponzi scheme collapses. So, I’m trying to explain how the world really works and point out that those are not the risks that we’re facing at all – the risks are to do with too much debt and being over-extended and over-leveraged. The risk is not that your money will not be worth anything. The risk is that you might lose it all in a systemic banking crisis.

KF: I’m horrified by what’s going on in the world of private equity where we have groups like Blackstone Capital and Colonial scouring the world – they’re setting up giant real-estate investment trusts in China, through Australia; they were buying up 10,000-odd properties in America last year and really starting to push this bubble back into play and ironically they’re raising fresh capital rather than relying on cheap federal-related finance. Property investors have been sold that there is little risk because we have a shortage of housing, we have a naturally rising population augmented with some immigration as well, and we have the Chinese boom continuing and from that it’s almost at the point now where young people are being conned into believing that paying 40% of your income on somewhere to live is perfectly rational, regardless of the fact that in the mid-90s people were borrowing $100,000 for a mortgage on average versus about $200,000 today.

NF: Absolutely, this is predatory. The whole idea, especially for young people, is to convince them to be engines of credit expansion: you must have a house – you haven’t arrived, you haven’t grown up until you own your own home, therefore whatever the cost you must borrow all this money and buy something. So it has been pushing up prices because there is a lot of money that people are allowed to borrow, so people have access to borrowing at relatively moderate rates of interest, plus there is money coming from overseas that has been pushing up marginal prices, but nothing continues forever – when people say "but it’s different here", or "it’s different this time, we can justify these valuations", this is simply what they say every single time there is a bubble. Every single time in history there is a bubble, people are told it’s different this time and it never ever is. So of course property can fall – property can fall a very, very long way. And it can take an extremely long time to recover.

A couple of examples that I’m familiar with – if you look at what happened to property prices in real terms in Holland after they moved away from their period of being a major global naval power, it took three hundred years for their property values to recover. After the fall of the Roman Empire, it took 1500 years for property prices to recover. So, of course they can fall and they can stay down for a very long time. The thing is, if the asset price falls, the debt is still there and you owe the difference, so this is a recipe for indentured servitude – debtors’ prison – and turning debt slavery into real slavery, perhaps, or being strong-armed into the military. So I am absolutely determined to keep as many young people out of trouble as I possibly can. For them to start off behind the 8-ball before they have even had a chance is just a horrible thing to do to the younger generation.

I think people need to look at the situation with renting and say renting is not throwing money away, renting is paying someone else a fee to take the property price risk for you, and that is going to be a really good bet over the next few years. So, just don’t get yourself over-leveraged at a time when the leverage game is coming to an end.

KF: I agree with most of what you’re saying but what I can’t fall into line with is this let’s just lay down and let the system collapse around us – don’t you think that while these huge returns on investment in the land-based Ponzi game continue, wouldn’t it be effective or part of a diversity of tactics to be looking to reform the system that used to finance teachers, that used to finance our public rail systems and so forth, and that is the tax system.

NF: The problem is the system has an enormous amount of inertia. Even if you had the best people running it, who were incredibly well-informed, incredibly public-spirited and prepared to do something about it, the system has so much inertia that they wouldn’t be able to achieve anything in the amount of time that there is available. So you simply are in a position where the system as it exists is unreformable, and in fact there has been comprehensive regulatory capture, so the rules are written by the very people who benefit from them the most. And these are the people least likely to go changing the status quo, because it has served them so well and often they can’t see that it wouldn’t serve them exactly the same way in the future (even though I don’t think it will, but they think it will). So why would they reform that?

We actually do not have a democratic process. In most developed countries, what we have is the appearance of democracy, we have the institutions, but they have been hollowed out and they no longer serve the functions in the way that they once did. So, comprehensive regulatory capture – and most of what passes for politics these days is political theatre, or prolefeed, if you like, in Orwellian terms, so this is not the ability of ordinary people to actually generate change at the political level. I think those days are gone, and they have been gone for quite a long time, so we’re not in a position to be able to vote for that kind of change. I don’t think any change of policy is actually going to make any difference because I think we’re going to be in crisis in the next couple of years in a place like this, and so that whole level of governance will be even less effective than it is now, and I would simply like to see us build something from the bottom up because I think we stand a chance of being far more effective if we work at the most effective organisational scale, which will depend on where the trust horizon lies.

When the trust horizon contracts, as I would argue it will over the next couple of years, then the effective organisational scale will be much smaller. And I think, because we have limited capacity, we need to use that capacity as effectively as we possibly can, which means working at a more local level.

KF: So, in summing up then, Nicole Foss, what should we be learning right now in preparation for the climate challenge future?

NF: Well, we really need to look at the big picture, and how different things fit together. So, there is a lot of focus on certain issues – there has been a lot of focus on climate, for instance, but a lot of people who are focusing on that are not looking at other subsystems like finance, and the problem is that if you fall at the first hurdle, you’re out of the race, because you lose your capacity to do anything about the challenges that come later. So, if we don’t understand the financial system then we will lose our capacity to do anything about climate thereafter, or about energy, or the other resource limits that we’re approaching.

So, I think we absolutely have to prioritize the different subsystems of reality, look at the big picture and navigate our way through what will be several decades of upheaval, because we really are reaching our limits to growth in just about every way all at the same time. And we have to be able to work our way through that, and that’s going to cause a bottleneck, I think, and that’s going to be very hard on a lot of people. But the point is to minimise the pain – to mitigate the impact. You can’t prevent the contraction from happening, but you can mitigate the impact. The way I put that is that you can’t change the waves, but you can learn to surf, and that’s what we need to do.

 


Home Forums Nicole Foss In Australia: It's No Use Trying To Build A Better Dinosaur

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  • #8387

    Artwork: Ilargi for The Automatic Earth The Nicole Foss 2013 tour of Australia is well underway, and since I'm not there, it's a bit hard for
    [See the full post at: Nicole Foss In Australia: It's No Use Trying To Build A Better Dinosaur]

    #7425

    jal
    Participant

    Though I will never understand, … why every single one of Nicole’s lectures doesn’t attract 10,000 or more listeners and spectators.

    I understand why.

    The majority has been “captured” by the “system”.

    As Nicole said,

    The whole idea, especially for young people, is to convince them to be engines of credit expansion:

    There is so much more that I could quote that I agree with.
    However, it would be talking to the choir.

    I’ve had the pleasure of meeting Nicole and having satisfying discussions.


    ~~~ Since I’m learning, I reserve the right to change my mind.~~~

    #7426

    bluebird
    Participant

    Ilargi said “Globalization is sort of harmlessly alright when it’s limited to stereo’s and fancy cars and phones. Those things you don’t need in order to survive. “

    Unfortunately, many people today think that is the only way to survive. They’ve lived most of their lives that way and think it is normal and can’t or unable to see anything different.

    #7427

    Gotta love those people who tell us to change our lifestyles, lower our carbon footprint, etc etc etc and then they hop on a plane and fly to the other side of the world. Kudos to Rob Hopkins of the Transition Town movement who stopped flying years ago. I don’t see that it has hindered his work in any way.

    #7428

    davefairtex
    Participant

    Helen –

    Did you listen to the interview? I did. Nicole didn’t talk about lowering carbon footprints, she spoke about finance and effectively trying to get ordinary people to realize that they’d better start claiming some of the real wealth before their claims vanish.

    Reminds me of a student answering a question in class without actually reading or understanding the material. Said student ends up looking silly. Doesn’t help the credibility of the atta-boy for whoever Rob Hopkins is, either.

    #7429

    To wit: neither Nicole nor I have ever told anyone to lower their carbon footprint.

    And we don’t tell people to change their lifestyle in order to save the planet, but to save their own asses.

    #7430

    p01
    Participant

    Yep. No carbon footprint reduction that I heard of, either, probably because it doesn’t work.
    Simply not going into debt and realizing how outrageously overpriced cars and houses are, takes care of much of the footprint.
    On the other hand, people who are vaguely aware of something being wrong will always tell you you’re not “doing anything” about it. No matter how much you try to explain that paying down debt (and almost hopelessly avoiding getting into it again because everyone else is causing the inflation by taking on debt and “doing something”) and saving (*gasps*what’s saving, that’s like what old people living last century did, no?) takes most of your time and you don’t have enough resources to “do something”, the “do something about it” meme is prevailing. I wonder about many transition movements made with debt…and with indebted people…how long will they last.

    EDIT: There was a Guy who preached lowering carbon footprint for everybody (except for him, because in his case, he was trying to burn it as fast as possible to save the Planet, go figure). I think he went down under for a visit also. Maybe that’s the Guy or P[strike]h[/strike]erson that’s being referred.

    #7431

    EVERYONE Should Understand That Business Insider Is A Lame Fed Mouthpiece https://chartistfriendfrompittsburgh.blogspot.com/2013/04/everyone-should-understand-that.html

    #7432

    Professorlocknload
    Participant

    “And we don’t tell people to change their lifestyle in order to save the planet, [ but to save their own asses “]

    Bravo, there Ilargi! And the last half of that sentence is the key. My friend, THAT is the incentive element that will fix it all!

    Let pain bring about change. It’s a harsh, but natural solution.

    Pain at the pump? Well, gas consumption is falling. Pain at he grocery? Garden supplies and seeds soaring. When consumption is less affordable, it will ultimately be reduced…like it or not. Two by four, meet side of head.

    Free, Underground, Alternative, Shadow, Local or what ever you want to call them, markets, will find equilibrium eventually.

    The power of Voluntary Association.

    Now, if all the holy anointed interventionists, alchemist social mechanics and special interests would just get out of the way, the process could begin. It will happen anyway, so why stall it?

    #7433

    Professorlocknload
    Participant

    ” ~~~ Since I’m learning, I reserve the right to change my mind.~~~”

    Excellent, JAL. More often the better, way I see it! It’s a sign of advancement in the scheme of things.

    More I learn, the less I “know.”

    #7436

    I have been trying to make changes to my attitude and reduce complications in life in order to prepare for a more disconnected future.
    I have been doing so since 2005 or so, explaining to anyone who is interested why.
    One thing I have noticed is my considerable fatigue, kind of emotional fatigue at being the Cassandra of my peers. There’s a big hit on your social fitness at the present because people do quite often feel a great deal of subconscious unease about the current way of life. One thing they don’t want is the “red pill” – (hope I have the colour right). They don’t want the danger or futility crystallised in the way Nicole does because it might just remove their remaining mojo, their remaining impetus to continue day to day, and of course, damage their current social fitness as well.
    You have to be strong already to take on this level of dislocation.

    Anyway I have fatigue, so I’m slowing down a bit, but I’m not stopping.

    Anyone else get this?

    James

    #7437

    Nassim
    Participant

    James,

    I am reading the translation of a Swedish book “Let the Right one” about a boy of 15 who falls in love with a vampire who is 12 years old (or 200, take your pick).

    I learnt an awful lot about vampires and of how people who have been bitten, and survived the experience, go on to become vampires and zombies themselves. All almost quite new to me. Quite enthralling stuff.

    Your reflections on life as a “Cassandra” have a lot in common with life as a vampire. People are afraid that you might “infect” them and that it will bring permanent bad luck to their household if they should become like you. Quite understandable really. 🙂

    #7439

    Thanks Nassim!

    I think this subject is worthy of more consideration and I made noises about writing a TAE article about it. I feel I have a better grip of the emotional side of things than the technical, but I’m not very confident of my voice so the article never got written.

    Because of my location, I have met Stoneleigh and Ilargi on more than once occasion and count them as good friends, they both understand very well the psychological barriers to change.
    I think you need two toolkits in order to make the necessary changes in your life to cope with the future, that which helps you understand the bigger picture, the trends and the approximate reasons why collapse is happening, and the toolkit which helps you manage your own reaction and grieving process and understands where others stand in their understanding, their investment level in the current paradigm, and their ability to change direction.

    Because neither I nor my family have the ability to really change to a more sustainable lifestyle, I’m concentrating on reducing my (our) discretionary spending and getting mentally prepared so that I can be someone who prevents over-reaction in other and helps them understand what’s happening in a structural sense rather than relying on narratives from the media.

    #7440

    Please excuse my muddled sentences! We have a two year old and I am sleep deprived.

    #7442

    gurusid
    Participant

    Hi Folks,

    Telegraph, By Andrew Oxlade 12:00PM BST 15 Apr 2013

    ‘Win win’ for house prices as 1m prepare to buy, say economists
    The Ernst & Young Item Club today predicted improvements for the property market, with a million buyers poised to buy.

    Britain’s property market is a “win-win” scenario in 2013, the influential Ernst & Young Item Club said in its spring forecast today.

    It said incomes would edge higher, largely thanks to the rise in the personal tax allowance for most Britons, and predicted that mortgage affordability would improve, with the impact “multiplied” by the Chancellor’s new Help to Buy scheme.

    The first phase of the Help to Buy scheme began earlier this month. The Item Club, an independent group of economists, said that with £3.5bn of government funds paying 20pc of the purchase price, the scheme could underpin 100,000 mortgages worth £200,000 each.

    The report stated: “We think one million families will move house in the coming year, a sharp increase from the recent level of 800,000, driving higher house prices, additional housing-related spending, and ultimately construction.”

    With Help to Buy, those with a 5pc deposit can get an extra 20pc of deposit as a loan from the Government when buying a newbuild home for up to £600,000. The loan is interest free for five years and carries a low rate of interest after that, starting at 1.75pc but rising each year ahead of inflation.

    etc.

    But in their editorial they question this optimism:

    https://www.telegraph.co.uk/finance/comment/telegraph-view/9996408/%5DWin-win-forecast-for-house-prices-may-be-built-on-shaky-foundations.html

    It said incomes would edge higher, largely thanks to the rise in the personal tax allowance for most Britons, and predicted that mortgage affordability would continue to improve, pushing up prices.

    Home loans are becoming cheaper chiefly because of the Bank of England’s Funding for Lending Scheme, backed by the Government, which is offering £80bn of loans at rates as low of 0.25pc, to banks and building societies. The result has been a fall in mortgage rates, and the Bank is predicting more declines to follow.

    Rates remain at rock bottom and quantitative easing helps keep mortgage costs pinned down. Demand, therefore, is clearly being supported, by the State if nothing else.

    On the supply side there are clear constraints. Government forecasts suggest the number of households in England will grow from 21.7m in 2008 to 27.5m in 2033, which implies an average 232,000 homes must be built each year to keep up with demand.

    But the most recent figures from the Home Builders Federation show permission was only granted for 45,000 homes in the final quarter of 2012. This was a vast 66pc improvement on a year earlier but the total falls short of a theoretical target of 58,000 required to match projected demand.

    Of course, measuring these forces of supply and demand can only ever be theoretical. The notion of a restricted number of places to live on an island nation with an attractive standard of living is compelling for those selling the story of rising house prices.

    But history shows the danger of believing the forces of supply and demand can be coordinated into a forecast. In Japan, an island state more densely populated than the UK, the population grew from 123m to 128m between 1990 and 2011 – two decades that saw Japanese house prices plummet.

    (Bold in text added)

    $200k (australian) mortgage? We got £200 sterling mate! That’s $295,540 (as of 18/4/13) of yer Ozzie dollars! Owzat!

    Excuse me if I sound a little mad, but its seems the only suitable response in this current reality. I have a sneaking suspicion that these house prices will be kept high come what may (at least in official statistics) as a way of siphoning off every spare penny (as Illarhghi has pointed out) into the [strike]military-industrial[/strike] housing-government complex (well they got rid of the government-housing complex after all). The delusion and fear of ‘not having your own place’ will trump any affordability issues; these people both young and old, will pay through the nose until they are jobless, penniless and on the streets. And even then they will moan if house prices start to come down… Its more than predatory, its a national psychosis.

    L,
    Sid.

    #7443

    gurusid
    Participant

    Hi Carbon,

    The very definition of madness is being outside of the consensus reality of the society that your are [strike]obliged[/strike] forced to participate in. It is very difficult trying to think differently without that psychological conditioning of wanting to conform kicking in. The only way I have found that is remotely useful IMHO, is to consider oneself as an early explorer in new territory. You are marking out new ground and exploring new ways of being. It seems like the hardest thing, but in actual fact it is what humans have done throughout their history. Its only the dumbing down process of mass education (you know being herded into just one age group, controlled with bells and whistles, threats of violence and exclusion, i.e. your average concentration camp experience) that prevents everyone going off and doing their own thing. And it takes energy to swim against the tide; its exhausting. And its why so many people end up compromising in their efforts, and often get quite negative when confronted with the truths that they already know; often the most un-hearing are those who have already heard. They know the score, have felt the pain and exhaustion and just don’t want any more of it. I have seen a lot of this in such movement as the Transitions Towns thing, where people just get burnt out trying to deal with it. They end up instead fighting some more familiar battle to do with a re-assuringly familiar political or environmental agenda, rather than have to radically restructure their own neurons (which is why teenagers are always tired btw – their brains are working overtime – that and your two year old, who is doing much the same thing. Maybe you should join him/her in his/her exploration of their world on their terms – who knows you might actually discover a few things if you can get over the stuckness of your own world view – I bet your toddlers not sleep deprived! – sorry hope that doesn’t sound patronising)). That’s the weird thing about the human brain, it is infinitely reconfigurable, if we let it, and don’t allow other’s opinions of what we’re doing stop us.

    Even if the great god TEOTWAWKI doesn’t strike, at least you can say you led an ‘interesting life’… :cheer:

    https://www.youtube.com/watch?v=stOoC-Ikx7A

    We Shall Not Cease From Exploration – T. S. Eliot (1888-1965) reads the concluding lines of Little Gidding – The fourth and final poem of his Four Quartets:

    We shall not cease from exploration
    And the end of all our exploring
    Will be to arrive where we started
    And know the place for the first time.
    Through the unknown, unremembered gate
    When the last of earth left to discover
    Is that which was the beginning;
    At the source of the longest river
    The voice of the hidden waterfall
    And the children in the apple-tree
    Not known, because not looked for
    But heard, half-heard, in the stillness
    Between two waves of the sea.
    Quick now, here, now, always —
    A condition of complete simplicity
    (Costing not less than everything)
    And all shall be well and
    All manner of thing shall be well
    When the tongues of flame are in-folded
    Into the crowned knot of fire
    And the fire and the rose are one.

    L,
    Sid.

    #7444

    gurusid
    Participant

    Hi Chartist,

    That sure looks ominous:

    A Gold Top Foreshadows A Stock Drop

    &

    Hope you don’t mind me showing the charts directly.

    Thanks,

    L,
    Sid.

    #7445

    sensato
    Participant

    As well as gradually getting their country homestead in order with her like-minded husband over the past 5 or 6 years, my sister has recently been focusing on ‘inner transition’. And in sharing this, she has been finding some receptive audiences. She has just blogged one of her most concise statements:

    https://transitioncornwall.com/2013/04/17/earth-day-2013-death-and-life/

    Up river from Cornwall, in Brockville, ON, I’ve been tagging articles with similar concerns as ‘coping’:

    https://transitionbrockville.com/tag/coping/

    #7447

    Thanks Sid

    I think you have described my situation quite well, except that I can make my own internal transtion just fine. When I learned about oil depletion in 2005 ish, I joined the dots with the end of the growth economy – something most people seem unable (or unwilling) to do.

    It’s the effort of thinking differently to the prevailing opinion which is tiring. You know, when you meet someone, discuss financial collapse (they call it recession) and they can only see growth and “restarting the economy” as the light at the end of the tunnel, while we might see a restart of business as usual in the current paradigm to be one of the worst options, which would bleed away the last of our resources without producing sustainability, and which would widen the gap between rich and poor.

    Now you know you are messing with somebody’s noodle when you tell them that “recovery” would be a disaster and a whole new way of thinking which addresses declining energy and resources fairly is our only hope, and that probably means relocalisation and a redefinition of what we think we need in life.
    That’s when you become Nassim’s infectious Cassandra – (see Nassim’s comment below) You can see the pain of their cognitive dissonance.

    Incidentally I was one of three or four people who registered our city as a transition town. I have seen several rounds of transition participants burn out and leave, and now I can’t participate either because of the toddler care. But, due to the hard work of others, the transition town has morphed into an urban food collective where volunteers grow vegetables for a box scheme. That’s good, and a whole lot more practical than the peak-oil talking shop that it once was.

    James

    #7448

    SteveB
    Participant

    James,

    I’ve shared previously my positive experience with The Work of Byron Katie. From her and it I learned that everything is perfect, everything happens for me (not to me), the past and future don’t exist, what’s not my business or your business is God’s business (or, simply, reality), and that stressful feelings are signals to question the thoughts behind them and turn them around. In short, I learned to love reality.

    Katie’s form of inquiry has been the path to freedom, clarity, sanity, happiness, peace, and understanding for me. I use it on my relationships as well as thoughts about big-picture context of the sort discussed here. It’s simple enough that a child can do it, and it’s not unnecessarily wrapped in spirituality or the like.

    Her first book, Loving What Is, is a great place to start, as is her web site (or The Work web site), where you can see videos of her facilitating people doing The Work. My favorite of her books is Question Your Thoughts, Change the World, though they all have been helpful.

    I’ve also found it easy to share, which might appeal to you.

    #7449

    Anonymous

    I agree on the need to build up ones cash position in order to get a hold of one of the few chairs that will be available when the music stops. The question I have is, “Where does one find a safe place to store their cash and in what form? Are T-Bill accounts at Schwab or Fidelity safe? Cash accounts are MF Global certainly were not. Cash on deposit at banks are not cash, so where does one safely park their “cash” and still be able to access it when the banking holiday’s are declared, or when accounts are frozen (as in Cyprus)? Any ideas?

    #7450

    Cliff,

    First, there’s investing in hard goods that you will need down the line, tools, maybe some land (property makes sense only if it will allow you to produce basic needs, food, wood, water, shelter, that sort of thing, and not just one of them). As for “money”, the backyard bank is good for the first batch. One needs to be creative about how to make one’s deposits there water- and fireproof etc., but it can be done. We don’t explain how here, because that alone would make the backyard a less safe bank. T-bills can be good if the backyard becomes too small (the government won’t default on them), but not when kept in custody of a large financial institution: like any and all investments, having them under one’s own control, within arm’s reach, is vital.

    #7452

    BadlandsAK
    Member

    Hello! I have been reading your excellent blog over this past winter & thought it time to speak up. I am a mother of three children, ages 2, 3 1/2, and 5 living in the N. Plains of U.S. in South Dakota. We are in the NW area of the extreme drought when you look at all that red on the drought monitor, so have no illusions about the severity of climate ‘change’ and the implications. I have been desperately trying to find any forum or network of ‘awake’ parents to communicate with, but my findings have been pretty limited, as in none.

    I try to follow the information on the economic side of things, but must admit, a lot of it goes over my head. The housing market is very expensive, but we managed to find a rental house when we moved here about 2 1/2 yrs ago, with the intention of buying this year. We have decided against it, instead working to eliminate debt, per advice given here. (Plus, I find the ‘zombie’ house next door to be a little ominous, as well the for sale signs everywhere on over-priced houses.)
    We have reduced most debt, with apprx. $10,000 in medical bills remaining, but I’m not sure if I should use a large portion of my remaining ‘savings’ to pay that off, or just keep up w/monthly installments.
    Because of renting, we aren’t free to do as much as we’d like as far as gardening, and could barely grow a tomato last summer with the heat/drought anyway. Even though we can’t really dig in at our current location, we do subsist through hunting/fishing, have good practical skills, and extensive tools, but really worry about many things regarding the children. I have many questions, but will spare you for now. I have learned a lot reading here, so just wanted to take the next step, though not sure how much insight I have to offer to the discussion.
    Thank you again for this forum!

    #7453

    Welcome Badlands,

    And don’t be a stranger about what you might contribute. We are certainly interested in your story, in what you’ve done and why, in your neck of the woods. I don’t know that we have a lot of Dakota around here. And don’t be shy about asking any questions you think you might want to ask. Plenty of “awake” parents (to an extent, of course).

    #7454

    Anonymous

    I for would would really really like it if you could expand on what Nicole says in the couple of paragraphs in bold where she says “Nobody has a printing press and is generating physical currency. What they’re doing is monetizing debt”.

    Could you explain what is going on between the government, the Fed and the banks? So the Fed is not printing money, it is buying Treasury bills. This is different… how? What is it buying its T-bills with?

    #7455

    davefairtex
    Participant

    The Fed is a bank. All the big players have accounts. Imagine you are one of them, and you own 100 billion in treasury bills. The Fed comes to you one day and says “gosh I’d like to buy those treasury bills from youu, and in exchange, I’ll give you 100 billion dollars.” You agree.

    How does the Fed pay you? It credits your account at the Fed with 100 billion dollars.

    Where did it get this “money” from? It didn’t. It just changed the numbers in your account – in the “up” direction. That’s the Fed’s super power. It can credit anyone’s account with any amount it feels like.

    Of course the rules of the game require the Fed to account for all this crediting.

    Now then, as the seller you *could* use this money to buy stuff with. You could withdraw this money from your account, and buy buildings, or bribe congressmen, or whatever. Or you could keep it at the account at the Fed. $1 in new credit money in your Fed account spends exactly the same as the green FRN in your pocket that you earned selling apples on the street.

    Of course, by crediting your account with $100 billion new dollars of “credit money” the Fed instantaneously reduces the value of dollars everywhere by some percentage. More credit money is “out there” now, and no new things were created. That devaluation is why people call it “money printing” and they object to it.

    #7457

    Gravity
    Participant

    Like a starving man eating his own excrement to gain nutrition, no bureaucracy can live in a medium of its own waste.

    Conversely, I’ve been trying to cut down on the carbon hysteria, co2 is a non-isolated variable in a stochastic system, with the greatest number of coupled variables being unknown unknowns, hence no predictive qualities may be attached to its atmospheric concentration alone.
    Its a greenhouse gas, for sure, inside a greenhouse. The planetary atmosphere is vastly complex, randomly chaotic and not as predictable as a greenhouse. Since atmospheric co2 has risen another 10ppm in the past ten years, now approaching 400ppm, but the global temperature has not risen in this period [or in fact at all since the ending of glaciation], the elementary greenhouse-hypothesis seems questionable.

    Moreover the anthropogenic element is non-falsifiable and not causally determinable. The rapid rise in atmospheric co2 since the industrial age is anomalous by paleo-atmospheric standards, but not necessarily caused by industry or deforestations, or not provably so under scientific scrutiny of falsifiability. For the convenience of urban civilization and ecosystemic integrity, atmospheric co2 probably shouldn’t rise above 500 ppm during this interglacial period, unless other variables require it to.
    Back in the cretaceaus atmospheric co2 was presumably above 3000ppm, yielding a rich tropical biosphere, but solar intensity was 10% lower too, and atmospheric oxygen much higher, and there were mechanisms in place which prevented aquatic ph-forcing by carbonic acid, since there are hard-shelled aquatic fossils aplenty from that period.

    Climatology is a hopelessly politicised pseudo-science with no reliable predictive functions but is nonetheless used as powerful tool of social control. The political demand for scientific ‘consensus’ in predictive climatology is fallacious and unscientific, consensus is a political term only. The methods of research funding by green-industry profit incentives compromise scientific integrity.

    Of more immediate concern than carbon footprints is the artificial cloud coverage [possibly involving chemtrails, welsbach seeding, ionospheric/stratospheric heating via microwave resonance] which now regularly appears overhead and is clearly caused by the intense airtravel around the large airport here.
    On trailly days, the dimming-effect of this artifical cloud coverage easily reduces solar radiative intensity by 10%, diminishing the effectiveness of all photosynthesis, and if prolonged and global in scope, inducing an autonomous rise in atmospheric co2, in conjunction with a collapse of terrestrial and aquatic foodchains [aggravated by cumulative metallic contaminant toxicities and soil ph-forcing], more quickly and with greater certainty than temperature-coupled feedback trajectories solely dependent on atmospheric trace gasses [co2, methane, water vapour].

    Shifting local weather patters or global climate change, as witnessed, are not entirely unrelated to the massive clandestine weather modification/geoengineering programs going on everywhere, invalidating all measurements of coupled variables and rendering all climate models obsolete.

    However, there remain perfectly good economic reasons to advocate sustainable energy development, relocalised food production and ecosystem preservation which have nothing to do with atmospheric constituents or climate, insofar as those also maintain or increase economic and cultural wellbeing locally, if not globally.

    #7458

    tpverde
    Member

    Downsizing is a challenge, but I’m so glad I moved to a rural area in Costa Rica some 20 years ago, where most of my neighbors still know and practice the basic skills that kept them going for centuries. Fortunately a few friends and other like-minded families have joined the effort here at Pueblo Verde. We don’t need much to keep us warm, but beach wear is handy to cool off after a day turning the compost piles.

    #7512

    jal
    Participant

    More and more people are saying different versions of this blog.
    More and more people are feeling the consequences of the actions of the central banks.

    https://www.zerohedge.com/news/2013-05-02/ron-paul-jim-rogers-government-theyll-use-force-and-intimidation

    Ron Paul & Jim Rogers: “There’s More Chaos To Come”

    Here is three minutes of clarity from Ron Paul and Jim Rogers…”I would expect that there is going to be a lot more chaos still to come.” – Ron Paul; “They won’t take our bank accounts…they will take our retirement accounts.” – Jim Rogers

    correction:
    THEY are already taking our retirement accounts by keeping interest low and by printing more money.

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