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How to Cope with Inevitable Chaos

How to Cope with Inevitable Chaos

And that’s okay. You don’t need to. And neither does governments.

Is it me or does it seem like current times are more chaotic than ever?

The world seems to be constantly threatened by mass shootings, terrorism, war in the Middle East, nuclear proliferation, and lack of international diplomacy. Turn on the news and you’re bound to find a new threat that purports to destabilize the order of the world.

Right here at home, the national debt continues to soar to new heights, and the student-debt bubble seems more concerning as each day passes. Congress is failing to repeal and replace Obamacare, even with a Republican majority. News circulates about Trump’s administration constantly changing, while he still has over 1,000 top-level positions to fill. It seems like the people in charge of our domestic order can’t even seem to accomplish the very thing we elected them to do.

It makes one question just what is going on in our modern society? Are we seeing the social fabric unravel before our eyes? Why have things gotten so disorderly?

The Struggle Against Chaos

These are the questions posed, but something is missing. A certain historical context is left out. The real question we should be asking is, are current times truly more chaotic than ever before, or have things always been this way?

The history of humanity has been a struggle between order and disorder. Mankind has always been walking that fine line, struggling to find a balance.

This story goes all the way back to the Garden of Eden. A land of harmony and order, but man descends into chaos when a snake is let in and convinces Eve to eat the apple. Ever since, mankind has been subject to a world of disorder, struggling to keep a grasp on a life that seems random, and chaotic.

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The Triumph of the Invisible Hand

“By virtue of exchange, one man’s prosperity is beneficial to all others.”…Frédéric Bastiat.

It remains one of the most powerful metaphors in economics. In 1850 Frédéric Bastiat gave the world the story of the broken window. The son of a shopkeeper accidentally breaks a pane of glass in the shop. A crowd gathers at the scene. Pretty soon, the onlookers jump to the conclusion that it’s an ill wind that blows nobody any good. Admittedly, the shopkeeper is out of pocket by the cost of a window. But the glazier just summoned will reap the benefit. Where would poor glaziers be in a world without broken windows ? Imagine all the good uses to which the glazier can put his new-found windfall from repairing the damage. Think what he could buy. All that new money circulating through the economy. Perhaps we might all be better off if more windows got broken on a regular basis ?

“Stop there !” cries Bastiat, addressing the crowd directly.

“Your theory is confined to that which is seen; it takes no account of that which is not seen.”

Hence the title of Bastiat’s essay: ‘That which is seen, and that which is not seen’.

The six francs paid to the glazier for effecting his repairs are what is seen. The crowd can speculate to its heart’s content to what luxurious end those francs might be expended. But what is not seen is what the shopkeeper might have done with those six francs if he had not had to pay them to the glazier in the first instance. He would, perhaps, have bought some new shoes, or a book for his library.

“To break, to spoil, to waste, is not to encourage national labour; or, more briefly, destruction is not profit.”

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The Fog – Comprehending the Invisible Hand | Armstrong Economics

The Fog – Comprehending the Invisible Hand | Armstrong Economics.

Fog

COMMENT: I just wanted to thank you for all your charts and explanations of what was taking place on the DOW this week.  I have been reading your work for the past five years and I appreciate that you make this available for everyone.  I am trying to understand what is coming our way and what I need to do to help my family.  Sometimes I feel overwhelmed and in a thick fog.

The other day I was at the beach engulfed in this  surreal fog.  It captures what I feel so often.  I know you like to use visuals in your blog so I am sending this picture to you
if it can be of any help.  Thanks again for all your hard work.
Sincerely,
ID
REPLY: The free markets are truly infallible for they tell you what the future will be. The key is to listen and to grasp the body language of the market movements. I have stated history repeats because the passions of man never change. This also applies to market movements. We are setting the stage for the bond bubble. We are going to see a major crisis in government that will make your head spin. This is where the risk truly lies. Each 8.6 year wave produces a major high bit in a different sector or region. This wave is the high in bonds and it is precisely on time.

 

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Olduvai IV: Courage
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Olduvai II: Exodus
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