From the administrator at theburningplatform.com:
I’m sure glad Nixon only “temporarily” suspended the convertibility of the dollar into gold. When a politician or banker uses the word temporarily to describe some un-Constitutional act they are taking to protect you, be sure it’s permanent and you are getting screwed on behalf of the establishment. Nixon closing the gold window in 1971 allowed him to continue the welfare/warfare state.
Bernanke temporarily reduced interest rates to 0% eight years ago to avert some sort of financial disaster (Wall Street banks reaping the consequences of their actions and going bankrupt). Rates are still essentially 0%, supposedly 7 years into an economic recovery. Obama and his minions temporarily were going to run huge budget deficits to jump start our economy with Keynesian magic. It’s seven years later and the budget deficit will exceed $600 billion this year and on path to exceed $1 trillion in the next few years. Temporarily is code for bend over citizens.
The de-linking of the dollar to gold allowed politicians to promise free shit to their constituents in order to buy votes, with no immediate consequences for their re-election campaigns. Politicians gone wild led to the national debt going from $370 billion in 1971 to $19.1 trillion today. It allowed these treasonous bastards to promise $200 trillion of goodies to the people, which they won’t honor.
It allowed Wall Street to peddle credit cards, auto loans, mortgages, and home equity loans to the unwashed masses through the greatest propaganda program in history. They’ve lured generations of math challenged Americans into the debt slavery of low monthly payments for eternity. We now sit with $60 trillion of total debt and a faltering economy which will never generate enough wealth to pay off the debt.
We’ve passed the point of no return. The economic collapse is a forgone conclusion. It’s just a matter of how much longer the sociopathic establishment can keep the charade going. There are cracks appearing everywhere. Time is running out. Thank Trick Dick for his temporary suspension of dollar convertibility.
http://www.theburningplatform.com/2016/03/12/what-nixon-wrought/
The entire asset mania of the last 46 years has been built on a foundation of monetary debasement. What’s worse, monetary debasement via credit creation (and thus debt issuance) is a far more insidious mechanism, allowing for the appearance of normalcy to last long enough for the hole digging to reach epic proportions.
I suggest that the economic destruction baked into this cake would have self-limited far earlier if the monetary debasement occurred via Zimbabwe-style banknote printing. Our current experiment with monetary folly is thus far, far worse, and the looming catastrophe (multiple versions, actually) far more terrifying. The amount of wealth slated for evaporation and the breadth of promises (e.g., pensions) slated for destruction have no historical precedent.
Truly, we sail into uncharted waters, with neither sextant nor compass, with a mammoth storm on the horizon and the sounds of reefs and rocky shoals on all sides.
Your last sentence is not just true, it’s poetic.
Poetic or not, it’s been 21 years since I bought (in both senses) Bob Prechter’s At the Crest of the Tidal Wave. That’s a long time to fret over which way to turn, what action(s) to take, and despite two decades of missed opportunities and learning markets the hard way maintain an unshakable conviction that the doom-and-gloom denouement is inevitable.
I just want to stop worrying about it, but I can’t. Every action (including no action) has consequences. There is no set-and-forget strategy that is not buried under carrying costs as time passes.
I now see that timing, not direction, is the most important criterion of all. Perhaps my sons will benefit from this almost-too-late-for-me insight.
In the meantime, I find that Election 2016 is shaping up to have parallels to an Epic Greek Poem (the Odyssey.) Odysseus supposedly means “trouble” in Ancient Greek, in both the sense of being trouble and delivering trouble to others. In this regard, perhaps Mr. Trump’s larger-than-life presentation, vexing as it does the cultists of today’s Cultural Marxist Cathedral, is life imitating timeless art.
I, too, have been heavily influenced by Prechter. I met him for the first time in Gainesville, Georgia two weeks ago and we had lunch. He is as smart in person as he is on paper. I think you may be too hard on yourself. Prechter’s apocalyptic prediction is based on the end of a grand supercycle wave that is over 200 years old. Almost by definition one is doing well to anticipate the end of such a wave within a decade or two. However, the correction of such a large degree up wave will be correspondingly devestating when it reaches full force. I would argue that the first subwaves arrived in 2000 with the tech wreck, followed by the financial crisis of 2008, but that the ultimate devestation is yet to come. I have also argued that the overture to this next huge down wave arrived in the second half of 2014 with the oil and commodity crash (see “Oil Ushers in the Depression, 12/1/14), which means the main event cannot be too far in the future. Practitioners of Elliott Wave analysis will one day put the final labels on the chart, perhaps after we’ve departed this vale of tears.
I had dinner with Bob about 10-12 years ago and came away with the same impression. The problem he faces (as do we all) is found in the Wave Principle of HSB. There he describes the two track system for cognition we humans share, where herding behaviors originate in the limbic system and, due to neuronal connections sporting both higher amplitude and speed, they overwhelm the higher brain functions of our reasoning mind in the neocortex.
I now conclude that people generally start with their beliefs and biases (co-located with their seat of “self” in the limbic system), decide on whatever, and then engage their neocortex to rationalize the notions, beliefs, etc., bubble up from just above the brainstem. This seat of “self” is also the location for emotions and it does not learn. This is why, when we debate with those of unlike mind, it quickly becomes emotional and heated. People are simply not open to incorporating facts that undermine the rationalizations they produce to justify their beliefs. They make the same analytical mistakes time after time, ignoring the contrary signals Reality provides.
This has the unhappy effect of making it difficult, if not impossible, to know when one embraces a correct interpretation or if one is simply rationalizing a belief held despite fact. Almost all situations of any controversy have multiple, mutually contradictory explanations, each of which is consistent with some subset of the “facts.” The neocortex simply embraces those that are consistent with conclusion, and ignores, filters or attacks the messenger of the rest.
This describes the Wave Principle in spades. There are always multiple, often contradictory interpretations of a particular wave count. Even today, we have no way to know in advance whether a small pull-back in a market is the beginning of a new downtrend or a brief correction in an extension of the old. Mr. Market can (and often does) take the less-likely path, and an overbought market can see multiple non-confirmations reset and a rally resume to the point of leaving an “objective” analyst open-mouthed, stopped out at a loss.
The problem with all this is that the smarter one is, the better one becomes at those rationalizations. Bob is a member of a society whose lower limit for membership is about IQ=146. He’s a very smart guy. I get that, and I respect that. But once one looks at this thing the way I do, it becomes just another layer of paradox. Very smart people with strong convictions are very persuasive. I’m left with the belief that the Wave Principle is the most elegant hypothesis explaining the ebb and flow of nature, including the ebb and flow of human social behavior. I’m also convinced that selling it as something to be included in one’s OODA loop should come with a disclaimer as big as a 747. It is not a useful trading tool for me (although I’ll admit I’ve not found anything that is more useful than exponential moving averages and maybe two momentum-type technical studies.) I’ve rationalized my way into all sorts of errors, and only near-abstinence has allowed me to stop the hemorrhaging.
This is the lesson of the last 20 years. The next 20 may teach me a whole other set of lessons, including whether my Plans A, B, C and D approach proves to be a useful construct. In the meantime, opportunity costs mount.
I will add that this is an elegant explanation for why some extremely stupid, persistent ideas captivate some extremely bright people, and why the modern sub-cult of “trust in experts” is so full of folly.
I suspect each of us has a genetically coded amount of common sense, and that it does not vary in proportion to “g” (which is of course measured on an IQ test.) This means that the smarter we are, the better we are at ignoring common sense as we form rationalizations to encapsulate our premises. This is why sometimes we’re better off asking a farmer with an 8th grade education about something rather than trusting a Ph.D. to answer the question.