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One sure way to identify a system “optimized for failure” is if all the insiders are absolutely confident the system is “optimized for my success”.

I often discuss optimization here because it offers an insightful window into how systems become fragile and break down. When we optimize something, we’re aiming to get the most bang for our buck: maximize our efficiency, profit, productivity, etc., while minimizing our costs.

To maximize our goal, whatever it is–profits, power, whatever– we strip away redundancy and buffers because these add costs and don’t boost our desired output. They create resilience, i.e. the ability to survive disruptions, but the logic of optimization is relentless: get rid of all extraneous costs, because resilience doesn’t boost the bottom line.

This trade-off–trading resilience for optimization–looks brilliant when everything goes according to plan. But when events veer outside the narrow parameters of the optimized system, the system breaks down: supply chains break, safety procedures fail, and so on.

Even more consequentially, optimization strips away anti-fragility, Nassim Taleb’s term for the ability to not just survive disruptions but emerge stronger and more adaptable.

What happens when inflexible, sclerotic systems optimized to benefit self-serving insiders encounter chaotic turbulence or conditions outside the expected parameters? They collapse because the system is optimized for failure. Put another way: when a system is optimized to benefit insiders at the expense of resilience and anti-fragility, it is effectively optimized to fail because life is not programmable to a steady-state, predictable stability.

2021 is already optimized for failure in key ways:

1. The mRNA vaccines have not been properly tested to answer essential questions such as: can a vaccinated individual retain enough of the virus to infect an unvaccinated individual?

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

The pandemic as the end of consumerism. Everything that’s happening is happening because it had to happen

November 30, 2020

The pandemic as the end of consumerism. Everything that’s happening is happening because it had to happen

These Medieval ladies look like fashion models. With their splendid dresses in silk brocade, they are displaying their wealth in an age, the 14th century, in which Europe was enjoying a period of economic growth and prosperity. They couldn’t have imagined that, one century later, Europe would plunge into the terrible age of witch hunts that would put women back to their place of child-making tools. It is the way history works, it never plans, it always reacts, sometimes ruthlessly. And all that happens had a reason to happen (above, miniature by Giovanni da Como, ca.1380)

Can you tell me of at least one case in history where a society perceived a serious threat looming in the future and took action on it on the basis of data and rational arguments? With the best of goodwill, I can’t. Societies react to threats using a primeval stimulus-reaction that may be aggressive or defensive, but that’s almost never rational.

Curiously, our society, that we call sometimes “The West,” was the first in history to have a chance to do something rational to avoid the destiny awaiting it much before the threat was clearly visible. It was in 1972 when the newly developed digital computers were coupled with a powerful analytical tool, “system dynamics.” The result was the study called “The Limits to Growth” that foresaw how the gradual depletion of natural resources coupled with increasing pollution (that today we call “climate change”) would cause the whole Western economic system to collapse at some moment during the first half of the 21st century. The study also suggested rational solutions to avoid collapse: reduce consumption, stop population growth, manage pollution, and the like.

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

Charles Hugh Smith: What Would A Better System Look Like?

September 22, 2020

Charles Hugh Smith: What Would A Better System Look Like?

Introducing the ‘Hacker’s Teleology’

Writer, philosopher and long-time contributor to PeakProsperity.com, Charles Hugh Smith, returns to the podcast to explain the new socio-economic model he has just introduced to the world through his new book A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet.

The main mission behind Peak Prosperity is to focus on new, more regenerative and sustainable models that will better serve humanity than the old models which are currently falling apart. Charles posits a new way of living that is a) achievable with existing resources and technology, and b) much more equitable and resistant to abuse.

We very much need new alternatives like this at this time. Because, once the system breaks in earnest, our ‘leaders’ will be desperate — and as Jared Diamond wisely observed “Nations in crisis borrow and adapt solutions already devised”. So getting good ideas on the table now, so that they’re available to be adopted when needed, is critical.

The principal idea is we need a new system. Now, it doesn’t have to replace the existing system entirely. It just has to be an effective alternative that people can choose if they so desire to.

In my opinion, it needs to be decentralized, anti-fragile, yet connected with other like-minded people. But right now, we’re having to start from scratch, basically reinventing the wheel. We’re fighting a kludgy, broken, unfair, rigged system every step of the way if we want to create a decentralized community-based economy.

So what would a system be like if we designed it from scratch to actually make it easy to join a community economy? Well, we want a system that’s opt-in and voluntary, not like the one we have now.

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

Collapse Is A Process, Not An Event

September 20, 2020

Collapse Is A Process, Not An Event

How does one ‘get ahead’ during hard times?

Look, I’m a systems guy. I think in systems terms. You should as well.

Why?

Because we’re entering a period of time when the major systems that have supported humanity are going to fail.

Or, put more accurately: they are already failing.

As just one example, our monetary system delivers outsized gains to the already stupendously-wealthy while piling up massive debts on the backs of we citizens, both born and yet-to-be-born. The US Federal Reserve is the unelected and unaccountable body that is most responsible for have made America’s billionaires nearly $1 trillion ‘richer’ since the pandemic hit.

These next three Fed-related data points are, in a word, obscene.

The first shows that the US Federal Reserve now “owns” more US federal debt than all foreign central banks. The second shows how billionaires are getting grotesquely wealthier from the Fed’s “rescue’” efforts. And the last shows how the Fed’s record-low interest policy has resulted in an explosion in federal debt:

(Source)

This is obscene (and infuriating!) to anyone who cares about the future. Leaving aside the morality issues for a moment, we can at least conclude that the behaviors and values on display are thoroughly unsustainable.

Eventually spending more money than you have ends in ruin.

Speaking of spending what you don’t have, a similar story can be told about ecological overshoot and humanity’s extractive practices — it’s akin to spending both the entirety of the interest income as well as some principal each year from our environmental trust fund.

There aren’t many resources that one can point to which aren’t in some serious form of either concerning decline or depletion, or both. Already thousands, if not millions, of people in the American West are considering relocating because of the ever-present danger of disruptive if not life-threatening fires:

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

This Is How It Ends: All That Is Solid Melts Into Air

September 11, 2020

This Is How It Ends: All That Is Solid Melts Into Air

While the Federal Reserve and the Billionaire Class push the stock market to new highs to promote a false facade of prosperity, everyday life will fall apart.

How will the status quo collapse? An open conflict–a civil war, an insurrection, a coup–appeals to our affection for drama, but the more likely reality is a decidedly undramatic dissolution in which all the elements of our way of life we reckoned were solid and permanent simply melt into air, to borrow Marx’s trenchant phrase.

In other words, Rome won’t be sacked by Barbarians, or ignite in an insurrectionary conflagration–everything will simply stop working as those burdened with the impossible task of keeping a failed system glued together simply walk away.

If we examine the collapse of the Soviet Union and the Western Roman Empire, we can trace the eventual collapse to the sudden psychological shift from an assumption of permanence that found expression in denial (Rome can’t fall, it’s eternal…) or in the universal belief that life was unchanging and so everything was forever.

This psychological state was replaced by a shocked awareness that what was unimaginable, “impossible”–systemic collapse–was not only entirely possible, it was happening in real time. This change in consciousness arose in individuals in differing ways and velocities, but eventually everyone accepted that some adaptation was now necessary.

Correspondent R.J. and I have been discussing the consequences of the sharp decline in the value of labor which is painfully obvious in the chart below and the many other charts depicting the declining purchasing power of wages and the skimming of the majority of the economic gains by the top 0.1%.

In effect, it no longer pays to work beyond the bare minimum needed to survive as all the value generated by labor above this minimum is either skimmed by the Bezos, Buffetts, Gates, Zuckerbergs et al. or it’s paid in higher taxes to the government.

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

Preparing for the end of the world as we know it

August 30, 2020

Preparing for the end of the world as we know it

For many Indigenous people, the collapse of our current system is not necessarily bad news.

Image: Vanessa de Oliveira Andreotti, all rights reserved

Gesturing Towards Decolonial Futures (GTDF) is a collective of researchers, artists, educators, activists and Indigenous knowledge keepers from the Global North and South. Our collective focuses on how artistic and educational practices can gesture towards the possibility of decolonial futures. We work at the interface of questions related to historical, systemic and on-going violence and questions related to the unsustainability of “modernity-coloniality”. We use the term modernity-coloniality to mark the fact that modernity cannot exist without expropriation, extraction, exploitation, dispossession, destitution, genocides and ecocides.

Drawing on Indigenous critiques and practices from the communities we collaborate with in Brazil, Peru, Mexico and Canada, we propose that a decolonial future requires a different mode of (co-) existence that will only be made possible with and through the end of the world as we know it, which is a world that has been built and is maintained by different forms of violence and unsustainability.

There is a popular saying in Brazil that illustrates this insight. It states that, in a flood situation, it is only when the water reaches people’s hips that it becomes possible for them to swim. Before that, with the water at our ankles or knees, it is only possible to walk, or to wade. In other words, we might only be able to learn to swim – that is, to exist differently – once we have no other choice. But in the meantime, we can prepare by learning to open ourselves up to the teachings of the water, as well as the teachings of those who have been swimming for their lives against multiple currents of colonial violence.

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

Could We Be Living Through a Systemic Breakdown? Here are 3 Telltale Signs

August 22, 2020

Could We Be Living Through a Systemic Breakdown? Here are 3 Telltale Signs

There are several telltale signs surfacing that we are living through a systemic breakdown of virtually every aspect of life as we knew it. However, there are ways to prepare and set yourself up for success as best as possible. Take steps now to protect yourself from one of the most uncertain times in human history.

In the wake of the coronavirus pandemic, supply shortages have plagued the country. It’s not just toilet paper, cleaning supplies, and seeds we are talking about. It’s more than that and some believe this is another telltale sign that we are living through a systemic breakdown. In a previous article, Ripe For Chaos: How The Great Reset Will Shake Us To Our Core, it was written:

“We are literally watching a TEOTWAWKI event transpire right before our eyes. By all accounts, the pandemic was the triggering event that will set off a breakdown of epic proportions. As the COVID-19 pandemic opened our eyes to a worldwide health crisis, what could ensue will shake us to our core.

There is no mistaking the signs of economic instability. Turmoil in the stock markets, mass job loss, and cost of living have been at the forefront of our minds dealing with the aftermath of COVID, but now we are literally living in a world where there is a battle for resources from a country level to a world level. Borders are temporarily closing. Resources are getting scarce. Most people do not understand this is the fall of a civilization.

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

What Kind of a World do We Want? (…really?)

August 18, 2020

What Kind of a World do We Want? (…really?)

Although this question is both enduring and familiar, its present urgency is fully accentuated in a typically brilliant, but viscerally terrifying, exposition by Noam Chomsky on the current frangible condition of the world, and its near-term prognosis. However, I am also reminded of the strapline from the International Permaculture Conference, held in London in 2015, offering the intention and perhaps the means for “Designing the world we want.”

Chomsky never pulls a punch, as he strikes at layer on peeling layer of mendacity and fragility, from a prevailing framework whose groans, under the cumulative stresses of “growth”, should be heard as cries of threatening systemic collapse. The intermeshing quality of the world’s many woes has been conveyed by the term “changing climate” (i.e. climate change per se being just one item on the list), and amid a morass of such magnitude, positives are apt to remain obscured and muffled. Thus acknowledged, there could hardly be a better time than now, for a recasting of the world, having decided how we want it to be, in the broadest context, while there is still sufficient residual integrity to the whole that change might yet be managed, and full collapse is not yet inevitable, or already crumbling out of our hands.

It is no surprise that Covid-19 is a principal feature on the current global stage, and is probably the major focus of our concerns and attentions just now. While we cannot know how exactly everything will pan out, it is likely that the virus will be with us for some time, and we are entering a period of “recalibration” rather than a Post-Covid “back to normal”. Hence, focussing more on local and community resilience increasingly seems to make sense. We will certainly need to share support with our family, neighbours and friends, in the time to come.

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

It’s the preppers who are laughing now

July 16, 2020

It’s the preppers who are laughing now

Since the crash of 2008 much has been made of the fact that the world did not end or the sky fall in on us – unless of course you are one of the people who have been touched by bankruptcy, homelessness, addiction or even suicide as a result of the crash. The truth is that, since the financial collapse, life has not improved, improved very little or even got worse for a huge number of individuals around the world.

Many political and financial pundits have highlighted the fact that the problems that caused the sub-prime crisis and subsequent bank collapses around the world are in fact a systemic problem. However, it appears that very little has been done to remedy the situation. The basic problem is not complex at all – it is very simple in fact:

All closed systems have limits and the economic and ecological world system is nearing the limits of tolerance.
The main beneficiaries of the current system are a tiny minority (often refered to as the 1%), which is in fact growing smaller, further exacerbating inbalance.
No attempt has been made to address a flawed system that is ultimately unsustainable – papering of the crack is all that has occurred.

If you accept the 3 points above then it is easy to see that we are not in fact headed anywhere better in the short or medium term. If no attempts are made to deal with the distribution of capital, the availability of financially meaningful employment, the facilitation of resources and investment in genuinely productive and beneficial enterprises then circumstances will continue to deteriorate.

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

The Illusion of Control: What If Nobody’s in Charge?

June 22, 2020

The Illusion of Control: What If Nobody’s in Charge?

The last shred of power the elites hold is the belief of the masses that the elites are still in control.

I understand the natural desire to believe somebody’s in charge: whether it’s the Deep State, the Chinese Communist Party, the Kremlin or Agenda 21 globalists, we’re primed to believe somebody somewhere is controlling events or pursuing agendas that drive global responses to events.

I submit whatever control we discern is illusory, as the dynamics unleashed by the pandemic have already escaped the control of elites. The fundamental reason the elites have lost control is that all the systems they depend on have been broken for 12 years, but were successfully papered over by doing more of what broke them in the first place. This papering over of broken systems generated an illusion of functionality: everything appeared to function as before even as dysfunction spread into every corner of every system.

As doing more of what broke the systems in the first place is failing, the illusion of functionality has been shredded. Now that the illusion of functionality has been lost, control of the narrative via institutional authority has also been lost.

I’ve often written about the difference between force and power; elites often mistakenly believe the two are equivalent, but they are worlds apart. Those who wield power persuade the masses to obey without being coerced, and to accept the self-serving narratives of the elite without question. Power leverages institutional authority and cultural myths and beliefs.

Force is costly, as coercion is costly. Force is a poor substitute for power, not only because the costs are so burdensome, but because the masses are not acting on their own volition; they are obeying only because the costs of not obeying are so high.

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

Bailouts Can’t Save This Fragile System

May 5, 2020

Bailouts Can’t Save This Fragile System

It’s obvious the global economy is painfully fragile. What is less obvious is the bailouts intended to “save” the fragile economy actually increase its fragility, setting up an inevitable collapse of the entire precarious system.

Systems that are highly centralized, i.e., dependent on a handful of nodes that are each points of failure — are intrinsically fragile and prone to collapse.

Put another way, systems in which all the critical nodes are tightly bound are prone to domino-like cascades of failure as any one point of failure quickly disrupts every other critical node that is bound to it.

Ours is an economy in which capital, wealth, power and control are concentrated in a few nodes of the network we call “the economy.”

A handful of corporations own the vast majority of the media; a handful of banks control most of the lending and capital; a handful of hospital chains, pharmaceutical companies and insurers control health care; and so on.

Control of digital technologies is even more concentrated, in virtual monopolies: Google for search and YouTube for video. Facebook/Instagram and Twitter for social media. Microsoft and Apple for operating systems and services.

The vast majority of participants in the economy are tightly bound to these concentrated nodes of capital and power, and these top-down, hierarchical dependencies generate fragility.

When unexpectedly severe volatility occurs, the disruption of a few nodes brings down the entire system. Thus the disruption of the subprime mortgage subsystem — a relatively small part of the total mortgage market and a tiny slice of the global financial system — nearly brought down the entire global financial system in 2008 because it is a tightly bound system of centralized concentrations of capital, power and control.

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

Bankers Going for Broke Because They Know it’s Broke – G. Edward Griffin

November 10, 2019

Bankers Going for Broke Because They Know it’s Broke – G. Edward Griffin

Edward Griffin, author of the wildly popular book about the Federal Reserve “The Creature from Jekyll Island,” is holding a conference this weekend called “Red Pill Expo.” It is all about waking people up from the illusions they are being told. Griffin explains, “The illusions are in health, in politics and in education. The illusions are in the media, in money and in banking, which is my specialty. So, people are coming, some of whom are informed, but most respond to the slogan we are using for the “Red Pill Expo,” and the slogan is ‘Because you know something is wrong.’ That sort of spells it out for most people, not just in America, but for people all over the world. People everywhere are being fed propaganda, lies and false stimuli of all kinds, but deep in their hearts, deep in their instincts, they know something is wrong.”

What’s wrong in the financial world with the longest expansion in history and the Fed starting QE (money printing) again? Griffin says, “We are living in a system of the banks, by the banks and for the banks, and that is the reality. . . . They see that the wheels are coming off. . . . The system of inflation in which we live cannot go on forever. . . . All systems of exponential growth always collapse. They come to an end at some point, and it’s hard to tell exactly at what point, but you do know there is a breaking point where it just moves beyond reality. The banks know this better than anybody. So, I am assuming that they feel they are at the end. You can smell it. You can see it. You can touch it almost.

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

The Two Paths to Collapse

November 25, 2018

The Two Paths to Collapse

The very structure of our systems guarantees their failure once conditions change beyond their limited ability to adjust.

As a general rule, there are two paths to collapse: gradual erosion and sudden crash. The two are intertwined, of course; in most cases, the system slowly loses vigor, resources, efficiency, etc. (erosion) which leaves it so weakened that a crisis that would have easily been overcome in the past triggers a catastrophic decline of production and order.

My new book explores these system dynamics in the present: Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic. As the title suggests, we’ve got a window to prevent the final descent, but it’s years, not decades.

There are two basic drivers of systemic erosion, drivers that have little to do with leadership or policy. Our current delusion is that changing leaders and tweaking policies are enough to stave off systemic erosion, decline and collapse, but the two dynamics cannot be so easily thwarted.

The first is the gradual decline in the system’s ability to adapt to changing circumstances. Life’s core asset is the ability to evolve and adapt, and organisms, species and systems which fail to adapt fast enough and effectively enough to rapid change disappear.

Today’s modern complex systems are typically optimized to specific conditions, meaning that they’ve evolved (or been designed) to maximize production and output given a certain set of inputs and processes.

If those conditions shift outside the expected parameters, the system’s efficiency and output are heavily eroded. To take a real-world example: airliners are designed to cruise at specific altitudes to maximize the efficiency of the engines and aircraft design while maximizing the cruising speed.

If an airliner is forced to fly at an altitude of 500 feet instead of 35,000 feet, the optimizations are lost.

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

From Economic Crisis to World War III

November 9, 2018

From Economic Crisis to World War III

The response to the 2008 economic crisis has relied far too much on monetary stimulus, in the form of quantitative easing and near-zero (or even negative) interest rates, and included far too little structural reform. This means that the next crisis could come soon – and pave the way for a large-scale military conflict.

BEIJING – The next economic crisis is closer than you think. But what you should really worry about is what comes after: in the current social, political, and technological landscape, a prolonged economic crisis, combined with rising income inequality, could well escalate into a major global military conflict

The 2008-09 global financial crisis almost bankrupted governments and caused systemic collapse. Policymakers managed to pull the global economy back from the brink, using massive monetary stimulus, including quantitative easing and near-zero (or even negative) interest rates.

But monetary stimulus is like an adrenaline shot to jump-start an arrested heart; it can revive the patient, but it does nothing to cure the disease. Treating a sick economy requires structural reforms, which can cover everything from financial and labor markets to tax systems, fertility patterns, and education policies.1

Policymakers have utterly failed to pursue such reforms, despite promising to do so. Instead, they have remained preoccupied with politics. From Italy to Germany, forming and sustaining governments now seems to take more time than actual governing. And Greece, for example, has relied on money from international creditors to keep its head (barely) above water, rather than genuinely reforming its pension system or improving its business environment.

The lack of structural reform has meant that the unprecedented excess liquidity that central banks injected into their economies was not allocated to its most efficient uses. Instead, it raised global asset prices to levels even higher than those prevailing before 2008.

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

When Long-Brewing Instability Finally Reaches Crisis

July 26, 2018

When Long-Brewing Instability Finally Reaches Crisis

Keep an eye on the system’s buffers. They look fine until they suddenly collapse.

The doom-and-gloomers among us who have been predicting the unraveling of an inherently unstable financial system appear to have been disproved by the reflation of yet another credit-asset bubble. But inherently unstable / imbalanced systems can stumble onward for years or even decades, making fools of all who warn of an eventual reset.

Destabilizing systems can cling on for decades, as the inevitable crisis doesn’t necessarily resolve the instability. History shows that when systems had enough inherent wealth to draw upon, they could survive for centuries, thinning their resources, adaptability and buffers until their reservoirs were finally drained. Until then, they simply did more of what’s failed to maintain the sclerotic, self-serving elites at the top of the Imperial food chain.

If we want to trace back the systemic instabilities and imbalances that culminated in China’s revolution in 1949, we can start in 1900 with the Boxer Rebellion, which was itself a reaction to the Opium Wars of the 1840s that established Western influence and control in China.

But is this far enough back in time to understand the Communist Revolution in the 1940s? If we want a comprehensive understanding, we must go back to 1644 and the demise of the Ming Empire, and perhaps even farther back to the Mongol victory over the Song dynasties in the late 1200s.

In the same fashion, we can trace the current crisis of global-finance Capitalism back to the expansion of globalization, affordable fossil fuels and credit in the early 1900s. Affordable fossil fuels enabled rapid industrialization and the growth of transportation and communication networks. Add the expansionary effects of globalization and credit, and the consumer-finance economy took off like a rocket until the inevitable consequences of providing leverage and credit to marginal producers, buyers and speculators led to the Great Depression.

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

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