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Which Nations Will Crumble and Which Few Will Prosper in the Next 25 Years?

Which Nations Will Crumble and Which Few Will Prosper in the Next 25 Years?

Adaptability and flexibility will be the core survival traits going forward.

What will separate the many nations that will crumble in the next 25 years and those few that will survive and even prosper while the status quo dissolves around them? As I explain in my recent book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic, the factors that will matter are not necessarily cultural or financial; being hard-working and wealthy won’t be enough to save nations from coming apart at the seams.

Here are the factors that will matter in the next 25 years:

1. The ability to engage and survive non-linear change, which is rapid, unpredictable and systemic, as opposed to linear change which is gradual, predictable and limited in nature.

None of the current political systems are decentralized enough and adaptable enough to survive the non-linear era we’re entering. As I explained in What If Politics Can’t Fix What’s Broken?, the politics of centralized compromise and incremental, top-down adjustments are wholly inadequate to dealing with non-linear disruptions.

2. The nations that cannot jettison their parasitic elites will fall; the few that find the political will to jettison their parasitic elites will have the wherewithal to survive and possibly even prosper as the global status quo collapses around them.

The problem, as we all know, is the parasitic elites rule the centralized hierarchies of wealth and political power, and they will cling to power even as the nation they rule crumbles around them. The hubris, complacency and greed of the ruling parasitic elites is near-infinite; the idea that the political and financial structures that they dominate will not survive simply doesn’t exist in the parasitic elites, with the exception of a few outliers who are constructing remote bugout compounds with landing strips etc.

 …click on the above link to read the rest of the article…

As The Perfect Storm Approaches, Most Americans Are Partying Instead Of Preparing

As The Perfect Storm Approaches, Most Americans Are Partying Instead Of Preparing

I can’t think of a time when Americans were more apathetic about getting prepared, and yet this is exactly the time when the urgency to get prepared should be at the highest.  Earlier today, my wife Meranda and I were discussing the fact that every single element of “the perfect storm” is coming together just as we had anticipated.  One by one, the pieces are all falling into place, and I share the most recent things that my research has uncovered with all of you on a daily basis.  Unfortunately, most Americans are absolutely convinced that there is no reason to get prepared for hard times because everything is going to be just great.  In America today, most people either believe that the future is going to be totally wonderful or that the future will be totally wonderful once we get rid of Trump.  Because so many of us have adopted one of these false narratives, most Americans are partying instead of preparing, and that is going to mean big trouble when things really start going haywire.

Are you familiar with “the rule of three”?  I just looked it up on Google, and this is how it is defined…

“You can survive for 3 Minutes without air (oxygen) or in icy water. You can survive for 3 Hours without shelter in a harsh environment (unless in icy water) You can survive for 3 Days without water (if sheltered from a harsh environment) You can survive for 3 Weeks without food (if you have water and shelter)”

Of course these numbers are not exact.  For example, many have gone without food for more than 3 weeks without serious problems.  But in general, this is a pretty good guideline for survival.

 …click on the above link to read the rest of the article…

Breaking the Chains of Debt: Lessons from Babylonia for Today’s Student Crisis

What’s the Real Meaning of the Stock Market Swoon?

What’s the Real Meaning of the Stock Market Swoon?

Nobody dares discuss it openly for fear of triggering a panic, but there aren’t enough lifeboats for everyone.

There’s no shortage of explanations on the whys and wherefores of the US stock market’s recent swoon / swan-dive / plummet. Here’s a few of the many credible explanations:

— the economy has reached peak earnings so there’s no fundamentals-driven upside left;

— bond yields are now high enough to dampen enthusiasm for inherently risky stocks;

— central banks curtailing / ending their quantitative easing programs have reduced liquidity in the financial system;

— US markets are catching up to the rest of the world’s market slump;

— the US market is overvalued by just about any measure;

— uncertainty about the mid-term election;

— corporations had to limit their stock buy-backs in the pre-earnings season blackout;

smart money has been selling all year, and this finally overwhelmed dumb moneybuying the dips;

— low volatility begets high volatility;

— key technical supports were broken like toothpicks;

— the increasing probability that trade wars will actually start impacting corporate bottom lines;

— market punters peering into the future saw higher rates, and decided to dump stocks now rather than later;

— the market is discounting the coming recession;

— complicated currency / FX reserves dynamics, mostly involving China’s attempts to control its currency while propping up its domestic credit bubble and tightening the screws on capital flows.

Whew. Got all that?

My explanation is much more simple: the status quo is fragile, and everyone’s grip on the crumbling cliff-edge of “prosperity” is precarious–and we all sense it. The security we all took for granted is turning to sand as the system breaks down. Job security–you’re joking, right? Pension security–you take us for chumps? Sure, your bank account is guaranteed by the FDIC, but nobody’s guaranteeing your income, your purchasing power or the security of your grasp on the good life.

…click on the above link to read the rest of the article…

Our Delusional Economy Is Poised To Slam Into The Brick Wall Of Reality

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Our Delusional Economy Is Poised To Slam Into The Brick Wall Of Reality

Will you thrive, merely survive, or fail?

While life has always been uncertain, today our choices matter more than ever. The decisions each of us make today will determine if we thrive, merely survive, or fail during the future time of upheaval ahead.

The window of opportunity to change course for humanity is all but closed.  There’s simpply no more time to hope that somehow, magically, the world’s entire energy complex will suddently evolve to a bountiful and sustainable new plane — whether by market forces, by maverick billionaires like Elon Musk, or by happy accident.

As we hammer home constantly here at Peak Prosperity, energy is everything. Without it, our society simply can’t function.

And it’s critical to appreciate that it takes an investment of energy to migrate from energy solution to another.

Imagine you heat your house with wood, but want to switch to a forced air gas furnace.  Is there energy involved in doing so?  You bet there is.  Besides the obvious new need for natural gas, there’s a huge amount of embodied energy in the manufacture and installation of your new furnace, all the duct work, and the delivery lines that will bring the gas to the furnace.  Further, there will be electricity required to force the air from the furnace, through the ducts, and into your house.

The same is true when making transitions at the national level. What’s involved in the much larger projects of switching industrial agriculture away from the fossil fuel driven process of plowing, planting, fertilizing, irrigating, harvesting, drying or cooling, and then transporting food from the field to your table?

At each stage there’s an enormous amount of energy infrastructure that needs to be rebuilt and reconfigured to run on “something else.”  Let’s examine the current dream that we’ll switchover to powering all of our farming needs with electricity.

…click on the above link to read the rest of the article…

Ten Years After the Crash, We Have Survived, But Have You Prospered?

Ten Years After the Crash, We Have Survived, But Have You Prospered?

The year is 2018 and we have survived.

Despite all the fear-mongering, all the pessimism, all the chaos, the markets are still here, and they are thriving.

This has blown away many, as their are countless experts in the precious metals community and the financial world at large, who believed that this house of cards would of long ago come crashing down long ago.

Sparks have flown through the air on an almost daily basis, threatening to set blaze to this bone dry kindling that we call a financial system. Yet, time and time again, the hose is turned on and the small embers are blasted out of existence through a torrent of fiat currency.

The financial “elites” have done what many thought would be impossible, and for that, you have to give them credit, well, at least in the short term.

Endless amounts of money printing may have helped paper over the problem, and arguably, it has, as ten years after the financial crisis of 2008, we are still standing, we are still here and the modern world is still ticking by with each passing day, regardless of how dysfunctional our current political system may be.

So why do people not feel it? Why do so many people still feel like there has been no recovery, and that they are still living through the 2008 crash that is now ten years in our past?

A recent report by Betterment highlights this point and showcases, that despite the market being up a stunning 200% since the market bottom, the majority of Americans are not aware of this, and in fact believe that the market is either flat, or has moved even lower than the 2008 crash.

…click on the above link to read the rest of the article…

Our “Prosperity” Is Now Dependent on Predatory Globalization

Our “Prosperity” Is Now Dependent on Predatory Globalization

Nowadays, trade and “prosperity” are dependent on currencies that are created out of thin air via borrowing or printing.

So here’s the story explaining why “free” trade and globalization create so much wonderful prosperity for all of us: I find a nation with cheap labor and no environmental laws anxious to give me cheap land and tax credits, so I move my factory from my high-cost, highly regulated nation to the low-cost nation, and keep all the profits I reap from the move for myself. Yea for free trade, I’m now far wealthier than I was before.

That’s the story. Feel better about “free” trade and globalization now? Oh wait a minute, there’s something missing–the part about “prosperity for all of us.” Here’s labor’s share of U.S. GDP, which includes imports and exports, i.e. trade:

Notice how labor’s share of the economy tanked once globalization / offshoring kicked into high gear? Now let’s see what happened to corporate profits at that same point in time:

Imagine that–corporate profits skyrocketed once globalization / offshoring kicked into high gear. Explain that part about “makes us all prosperous” again, because there’s no data to support that narrative.

What’s interesting about all this is the way that politicians are openly threatening voters with recession if they vote against globalization. In other words, whatever “prosperity” is still being distributed to the bottom 80% is now dependent on a predatory version of globalization.

Let’s rewind to the era of truly free trade, from the late Bronze Age up to the Roman Era. In the late Bronze Age (circa 1800 to 1200 B.C.), vigorous trade tied together the ancient empires and states of the Mideast and the Mediterranean. In the Roman Era, trade in silk and other luxuries tied China, India, Africa, the Mideast and the Roman Mediterranean together in a vast trading network.

…click on the above link to read the rest of the article…

The West Line Is Telling Us Where We Are Headed

The West Line Is Telling Us Where We Are Headed

Is the World Becoming Less Free?

Is the World Becoming Less Free?

Erosion of the rule of law and various civil liberties are causing the world to be a less free, less prosperous place.

The Cato Institute has, in cooperation with the Canadian Fraser Institute and the German “Friedrich-Naumann Stiftung für die Freiheit,” assembled a comprehensive 396-page report on human freedom in the world. Overall, governments worldwide have reduced the level of freedom in recent years.

The Link between Individual Liberty and Prosperity

Freedom of movement, expression, and information, as well as the rule of law, have seen the largest decreases since 2008.

Since 2008, the global Human Freedom Index (HFI) has gone down to 6.93/10 from 7.05/10. According to Ian Vasquez and Tanja Porčnik, who drafted the report, important factors for the score were performances in the categories regarding individual and civil liberties, as well as economic liberty. When it comes to the latter, the researchers point out that the individual liberty is very much linked to economic prosperity: the freest countries show a higher GDP per capita ratio compared to those with very low levels of individual freedom. Hong Kong, which ranks second in Cato’s Human Freedom Index, is a noticeable exception on this point.In total, twelve major categories determined the overall freedom score of a country. The Cato Institute found that particularly in the area of freedom of movement, expression, and information, as well as the rule of law, have seen the largest decreases since 2008. “In many parts of the world, freedom is under assault, with nationalism, populism, and hybrid forms of authoritarianism being sold as viable alternatives. As such, the largest deteriorations in freedom have occurred in Syria, Egypt, Venezuela, Belize, and Greece,” says Tanja Porčnik.

…click on the above link to read the rest of the article…

Free Speech Leads to Tolerance and Prosperity

Free Speech Leads to Tolerance and Prosperity

The protection of free speech, including and especially offensive speech, is vitally important to a country’s well-being.

J.S. Mill was an early advocate for our current view of free speech. He wrote, “If all mankind minus one were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind.”

Such a rule is likely rhetorically supported in many liberal democracies, and beyond as Greg Lukianoff from FIRE notes, however there exist variations to the rule. European countries permit more restriction on speech and have adopted, by convention or individually, some form of prohibition on hate speech, no longer allowing it, unlike the American system. Hate speech as a category has always been difficult to define and is hued in ambiguity, but generally, it limits speech aimed at people based on race, nationality, ethnic origin, religion, sex, and sexual orientation. The United States has advocates intent on including this as a form of unprotected speech, a category which has been previously unrecognized.

Additionally, information from Pew shows a stronger culture of free speech in the United States when compared to other regions, reflecting the few narrow exceptions to free speech legally permitted now.

Not only is the United States an exception in terms of legal protections for free speech, a product of the First Amendment, but it embraces concepts of free speech to a greater degree than most of the rest of the world. This indicates a culture of free speech which is partially rooted in the legal protections but not solely.

To further illustrate the point that the U.S. is quite exceptional in regards to free speech, consider this survey which found the U.S. at the top of 38 nations.

…click on the above link to read the rest of the article…

Tim Jackson: The High Price Of Growth

Tim Jackson: The High Price Of Growth

A finite planet cannot sustain infinite economic growth

Modern society is addicted to and engineered for perpetual economic growth.

Now, a fourth-grader can tell you that nothing can grow forever, especially if you have finite resources. But that simple realization is eluding today’s central planners, despite multiplying evidence that growth is becoming harder and harder to come by.

This week’s podcast guest is Professor Tim Jackson, sustainability advisor for the UK government, professor of sustainable development at the University of Surrey and Director of CUSP. Tim is also a full member of the Club of Rome.

He explains why the exponential growth rates of today’s economies, and their associated rates of resource extraction/consumption, will not be able to continue for much longer — and why a pursuit of “prosperity” (defined much more broadly than simple consumerism) is a much healthier goal for humanity.

Anyone who thinks that exponential growth can go on forever on a finite planet is either a madman or an economist.

Those very steep lines that rise very sharply as we approach the 21st century and show us that we are exceeding our carrying capacity in all sorts of ways are quite compelling. I think people actually feel this to some extent, that having more and more ‘stuff’ going through the system is somehow unsustainable. And not just in environmental ways, but even in social ways.

It’s the classic challenge of the irresistible force meeting the unmovable object. This pervasive idea of prosperity consisting of exponential growth, while the planet is not getting any bigger, is putting ecosystems under lots of stress. The pressures that human society puts on our environment is increasingly obvious.

…click on the above link to read the rest of the article…

What is this ‘Crisis’ of Modernity?


Workmen next to the screws of the RMS Titanic at Belfast shipyard, 1911
The people at Conflicts Forum, which is directed by former British diplomat and MI6 ‘ranking figure’ Alastair Crooke, sent me an unpublished article by Alastair and asked if the Automatic Earth would publish it. Since I like his work and I (re-)published two of his articles last year already, ‘End of Growth’ Sparks Wide Discontent in October 2016 and Obstacles to Trump’s ‘Growth’ Plans in November 2016, I’m happy to.His arguments here are very close to much of what the Automatic Earth has been advocating for years, both when it comes to our financial crisis and to our energy crisis. Our Primerssection is full of articles on these issues written through the years. It’s a good thing other people pick up too on topics like EROEI, and understand you can’t run our modern, complex society on ‘net energy’ as low as what we get from any of our ‘new’ energy sources. It’s just not going to happen.

Here’s Alastair:

Alastair Crooke: We have an economic crisis – centred on the persistent elusiveness of real growth, rather than just monetised debt masquerading as ‘growth’ – and a political crisis, in which even ‘Davos man’, it seems, according to their own World Economic Forum polls,is anxious; losing his faith in ‘the system’ itself, and casting around for an explanation for what is occurring, or what exactly to do about it. Klaus Schwab, the founder of the WEF at Davos remarked  before this year’s session, “People have become very emotionalized, this silent fear of what the new world will bring, we have populists here and we want to listen …”.

…click on the above link to read the rest of the article…

How Will You Cope With A Lower Standard of Living?

How Will You Cope With A Lower Standard of Living?

The forces are mounting that will eventually overwhelm most Americans and send their standard of living to unknown depths. Americans that have only known the post WWII prosperity are ill equipped and educated to deal with depression level living. Easy credit and instant gratification have created a nation of whining, self absorbed, entitlement minded people with no moral or mental toughness.

Doug Casey believes we are headed for what he calls a super depression created by the ending of a debt super cycle. The bigger the debt cycle the bigger the depression that follows. That’s how reality works and most people are not prepared for reality.

When this depression, which has already started, gets momentum, it will overwhelm the plans of a society that is expecting to get things like social security, pensions and payouts from retirement plans they have paid into for many years. All of those things will disappear almost overnight and leave society gasping and stupefied over what to do. Their reactions will be to yell and scream and try to identify who to blame but the only person they should blame is the one in the mirror.

Many very smart people have raised the alarm and done their best to warn the sleeping public, but those slumbering masses have ignored the warnings and hit the snooze button one more time. The masses do not understand economics, do not want to understand economics and they will pay dearly for that ignorance in the coming days.

When the real unemployment rate becomes common knowledge as it increases substantially, people will be left to survive on what resources they have saved up outside the banking system that cannot be stolen by the politicians and bankers. That is a key point here. The assets you have outside the system that cannot be stolen from you with a few key strokes on some computer.

…click on the above link to read the rest of the article…

The Keys to Human Prosperity: Individual Liberty and Rule of Law

We live at time when, increasingly, the U.S. government operates in arbitrary and discretionary ways. Government regulatory agencies seemingly have unrestrained powers over land-use, business manufacturing and enterprise, the workplace and the environment under broad legislative mandates. And proposals are now frequently being made for ad hoc restrictions and prohibitions on freedoms of speech, press, religion and association.  The principle and practice of individual liberty, therefore, is under serious attack.

The history of liberty and prosperity is inseparable from the practice of free enterprise and respect for the rule of law. Both are products of the spirit of classical liberalism. But a correct understanding of free enterprise, the rule of law, and liberalism (rightly understood) is greatly lacking in the world today.

Historically, liberalism is the political philosophy of individual liberty. It proclaims and insists that the individual is to be free to think, speak, and write as he wishes; to believe and worship as he wishes; and to peacefully live his life as he wishes. Another way of saying this is to quote from Lord Acton’s definition: “By liberty I mean the assurance that every man shall be protected in doing what he believes his duty against the influence of authority and custom, and opinion.” For this reason, he declared that the securing of liberty “is the highest political end.”

Lord Acton did not say, you will notice, that liberty is the highest end, but rather the highest political end. In the wider context of a man’s life, political and economic liberty are means to other ends. What ends? Those that give meaning and purpose to man’s sojourn on earth. Classical liberalism does not deny that there may be or is one ultimate Truth, or one moral “right,” or one correct conception of “the good” and “the beautiful.”

…click on the above link to read the rest of the article…

Triffin’s Paradox Revisited: Crunch-Time for the U.S. Dollar and the Global Economy

Triffin’s Paradox Revisited: Crunch-Time for the U.S. Dollar and the Global Economy

The reality is that we’re one panic away from foreign-exchange markets ripping free of central bank manipulation.

While all eyes on fixated on global stock markets as the measure of “prosperity” and “growth” (or is it hubris?), the larger force at work beneath the dovish cooing of central bankers is foreign exchange: the relative value of nations’ currencies, which are influenced (like everything else) by supply and demand, which is in turn influenced by interest rates, perceived risk, asset purchases and sales by central banks and capital flows seeking the lowest possible risk and the highest possible return.

Which brings us to Triffin’s Paradox, a topic I’ve covered for many years:

Understanding the “Exorbitant Privilege” of the U.S. Dollar (November 19, 2012)

The Federal Reserve, Interest Rates and Triffin’s Paradox (November 19, 2015)

The core of Triffin’s Paradox is that the issuer of a reserve currency must serve two entirely different sets of users: the domestic economy, and the international economy.

The U.S. dollar (USD) is the global economy’s primary reserve currency. When the Federal Reserve lowered interest rates to zero (Zero Interest Rate Policy, ZIRP), it weakened the dollar relative to other currencies. In this ZIRP environment, it made sense to borrow dollars for next to nothing and use this free money to buy bonds and other assets in other currencies that paid higher yields. Many of these assets were in emerging market economies such as Brazil.

As a result of this enormous carry trade, an estimated $7 trillion was borrowed in USD and invested in other currencies/nations.

…click on the above link to read the rest of the article…

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