Re: Is a Madmax outcome coming before 2020? Thus do we need anonymity?
Look at the 300+% total debt-to-GDP global ratio, which means $150 trillion in global debt given a $50 trillion per year global GDP.
Factor in the $quadrillion in global credit-swap derivatives that enabled the 30+ year bond bubble illustrated below.
And the $1000 trillion of unfunded social promises by Western governments.
I will repeat a post I made in the "Economic Devastation" thread as follows.
Before I answer, here is another quote of myself from another thread:
If you are arguing that automation will lead to long-term unemployment, I think you are wrong. Authors have written extensively on this subject since the 1900s (and perhaps earlier). Many were worried that machines would replace men. What we have seen is that automation simply results in higher efficiency and unforseen job opportunities on the automation side. This seems obvious to me, so you must be arguing something else despite what I'm reading here.
I agree of course that technological advancement leads to more employment, not less, over a long enough horizon. The problem is the social adjustment process interim and the inertia that can't adjust fast enough and how the inertia can actually make it worse for a while. If this inertia is too strong, we go into a Dark Age as the collective will destroy itself by attacking all capital and knowledge, i.e. the Middle Ages after the fall of Rome:
http://armstrongeconomics.com/2013/08/24/yes-in-a-mad-max-dark-age-not-even-gold-has-value/
http://armstrongeconomics.com/2013/08/10/can-europe-hyperinflate/
http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/
(Armstrong spent $20 million on research to construct the silver chart on that linked page above)
http://armstrongeconomics.com/research/a-brief-history-of-world-credit-interest-rates/3847-2/
http://armstrongeconomics.com/2013/09/20/can-we-blink-before-a-dark-age/
http://armstrongeconomics.com/research/monetary-history-of-the-world/the-monetary-history-of-the-greek-world/chronology/
(there was even a Dark Age in the Greek period)
http://armstrongeconomics.com/2013/01/29/8797/
(he means the 51 year private wave, vs 309 major cycle)
http://armstrongeconomics.com/models/7219-2/
(his cycle model explained, note the computer found it by correlating the ~$100+ million of data he had collected)
And the big difference compared to the early 1900s is we now have central banks in every country which have prevented the bank runs and mini-depression corrections that were regularly seen in the 1800s. Thus the collectivism has backstopped itself and run up the debt of the world to roughly 300% of GDP, meaning all of us would have to not eat for 3 years to pay it off. There is this erroneous (linked author Michael Pettis is a widely respected economist) notion that debt doesn't have to be paid and it is an illusion.
Let me link together some puzzle pieces for you that most do not see.
Worse, the $quadrillion of derivatives kept the world's capital locked into a (going on 31 years) bond bubble.
Here is a quote from the link above:
Armstrong explained it:
http://armstrongeconomics.com/2013/03/06/gold-backwardation-the-real-story/
The carrying cost of gold in a future's contract is related to the cost of short-term borrowing. Armstrong claims that he showed the Islamists how to earn "interest rates" by selling gold forward in futures, since they could not religiously earn interest in normal ways.
This is (at least one reason) why the $quadrillion derivatives credit-swaps are holding up the financial system. This is how the Arabs get the oil money into the gold futures markets and keep the western central banks ZIRP policy going.
You've just read something that nobody else ever published (as far as I know).
Now you know why I know there is a global implosion coming.
The chart below shows the declining interest rates since 1981, which is the bond bubble because gains in bonds are the inverse of interest rates because as the current rate declines the bonds paying the older higher rate are worth relatively more (they pay more interest to the holder), i.e. those who purchased 30 year Tnotes 30 years ago are at their maximum gains now in price appreciation. We can't relate the same implications for the peak in 1920, because at that time interest was paid in gold (you could go to the bank and demand gold for your paper dollar), thus it was impossible to write derivatives because someone could call them in (crash them) just by cashing dollars for gold (as France was doing in the late 1960s causing Nixon to close the gold window in 1971). So our situation is inverted now with money and interest.
I don't think they'll resist at all. It doesn't take long for people to embrace something that (ostensibly) makes their life easier/happier/etc.
They are resisting now. What do you think socialism and central banking is all about? Why is Obama so popular?
Factor in the $quadrillion in global credit-swap derivatives that enabled the 30+ year bond bubble illustrated below.
And the $1000 trillion of unfunded social promises by Western governments.
I will repeat a post I made in the "Economic Devastation" thread as follows.
Before I answer, here is another quote of myself from another thread:
I am not into the 666 biblical thing. I just want to stop the bastards such as the Bush clan, Hillary Clinton, Dianne Feinstein, NSA, etc from taking away my freedom.
farfiman, I've read that in the 1920s the Americans thought they'd entered a nirvana as they had been transformed in a matter of decades from an agrarian life with horses, lanterns, stage coaches communication to an industrial one with cars, radio, electricity, radio, etc..
The Second Industrial Revolution (which came as a result of the network effects of the First Industrial Revolution) caused massive technological unemployment, yet of course it also raised the standard-of-living and eventually created many more higher-skilled jobs. If we trace history, we can see this pattern repeating every 78 years = 3.1459 x 26 year maturity generations. Before the First Industrial Revolution were two soil technology revolutions which transformed agrarian productivity and caused massive unemployment.
8fold, there seems to always be a major war during each of the depressions caused by these periods of massive technological unemployment. 78 years before War World 2, was the US Civil War.
Any way, 1929 + 78 = 2007 (the year the real-estate bubble burst in USA and PIIGS and the depression started, the depression which is currently dead-cat bouncing and many are mistaking this for a recovery). The downturns typically have a duration ranging between 26 to 31.459 years. I was amazed when a recent Oxford study predicted a loss of 47% of existing jobs to automation within 20 years, i.e. by 2033.
Rival and rpietila, indeed the rich (in stored claims on manual, fungible labor) man can't generate knowledge. The poor (in useless stored claims on manual, fungible labor) can generate knowledge. The rich fool is just a usury (loans, bonds, dividends, hard-on money, and ponzi pump & dump) parasite, and I believe the knowledge revolution will destroy his ability to parasite on society and boast about it. I intend to be part of that, hopefully coming to a Bitcoin theater near you this holiday season.
Note this process isn't likely to be 100% complete ever, and certainly not even 50% complete any time soon. So stored capital remains useful for the meantime and will diminish but not entirely disappear in my lifetime. For example, the bastards still have their cartel on the energy we need to produce knowledge with (although we continue improve the efficiency of our gadgets, cars, etc).
rpietila, we can't give away knowledge. I have tried to give away my knowledge and I can't even force it down the readers' throats. Knowledge is impossible to bottle up and distribute. Knowledge is dynamic, diverse, spawns from fitness as motivated by the diverse situations that humans encounter.
Revenues will scale down with less required capital stock, due to lower costs of producing knowledge (only need a computer and home office). Thus more massive deflation ahead.
Large capital is going to running around trying to find a home, but it will be difficult to find economies-of-scale. The best investments will be very tiny.
farfiman, I've read that in the 1920s the Americans thought they'd entered a nirvana as they had been transformed in a matter of decades from an agrarian life with horses, lanterns, stage coaches communication to an industrial one with cars, radio, electricity, radio, etc..
The Second Industrial Revolution (which came as a result of the network effects of the First Industrial Revolution) caused massive technological unemployment, yet of course it also raised the standard-of-living and eventually created many more higher-skilled jobs. If we trace history, we can see this pattern repeating every 78 years = 3.1459 x 26 year maturity generations. Before the First Industrial Revolution were two soil technology revolutions which transformed agrarian productivity and caused massive unemployment.
8fold, there seems to always be a major war during each of the depressions caused by these periods of massive technological unemployment. 78 years before War World 2, was the US Civil War.
Any way, 1929 + 78 = 2007 (the year the real-estate bubble burst in USA and PIIGS and the depression started, the depression which is currently dead-cat bouncing and many are mistaking this for a recovery). The downturns typically have a duration ranging between 26 to 31.459 years. I was amazed when a recent Oxford study predicted a loss of 47% of existing jobs to automation within 20 years, i.e. by 2033.
Rival and rpietila, indeed the rich (in stored claims on manual, fungible labor) man can't generate knowledge. The poor (in useless stored claims on manual, fungible labor) can generate knowledge. The rich fool is just a usury (loans, bonds, dividends, hard-on money, and ponzi pump & dump) parasite, and I believe the knowledge revolution will destroy his ability to parasite on society and boast about it. I intend to be part of that, hopefully coming to a Bitcoin theater near you this holiday season.
Note this process isn't likely to be 100% complete ever, and certainly not even 50% complete any time soon. So stored capital remains useful for the meantime and will diminish but not entirely disappear in my lifetime. For example, the bastards still have their cartel on the energy we need to produce knowledge with (although we continue improve the efficiency of our gadgets, cars, etc).
rpietila, we can't give away knowledge. I have tried to give away my knowledge and I can't even force it down the readers' throats. Knowledge is impossible to bottle up and distribute. Knowledge is dynamic, diverse, spawns from fitness as motivated by the diverse situations that humans encounter.
Revenues will scale down with less required capital stock, due to lower costs of producing knowledge (only need a computer and home office). Thus more massive deflation ahead.
Large capital is going to running around trying to find a home, but it will be difficult to find economies-of-scale. The best investments will be very tiny.
I documented in the thread from which those quotes originate. You can click the link on a quote to go to thread (and post) where it comes from.
Specifically a recent Oxford study predicts 47% of all existing jobs will be lost to automation by 2033. This confirms we are in a period of radical technological unemployment. This appears to happen every 78 years. The difference is this time we are all tied together in socialism by central banks. You can re-read my quotes from the prior post to weigh the gravity of this thud of a realization.
Specifically a recent Oxford study predicts 47% of all existing jobs will be lost to automation by 2033. This confirms we are in a period of radical technological unemployment. This appears to happen every 78 years. The difference is this time we are all tied together in socialism by central banks. You can re-read my quotes from the prior post to weigh the gravity of this thud of a realization.
If you are arguing that automation will lead to long-term unemployment, I think you are wrong. Authors have written extensively on this subject since the 1900s (and perhaps earlier). Many were worried that machines would replace men. What we have seen is that automation simply results in higher efficiency and unforseen job opportunities on the automation side. This seems obvious to me, so you must be arguing something else despite what I'm reading here.
I agree of course that technological advancement leads to more employment, not less, over a long enough horizon. The problem is the social adjustment process interim and the inertia that can't adjust fast enough and how the inertia can actually make it worse for a while. If this inertia is too strong, we go into a Dark Age as the collective will destroy itself by attacking all capital and knowledge, i.e. the Middle Ages after the fall of Rome:
http://armstrongeconomics.com/2013/08/24/yes-in-a-mad-max-dark-age-not-even-gold-has-value/
http://armstrongeconomics.com/2013/08/10/can-europe-hyperinflate/
http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/
(Armstrong spent $20 million on research to construct the silver chart on that linked page above)
http://armstrongeconomics.com/research/a-brief-history-of-world-credit-interest-rates/3847-2/
http://armstrongeconomics.com/2013/09/20/can-we-blink-before-a-dark-age/
http://armstrongeconomics.com/research/monetary-history-of-the-world/the-monetary-history-of-the-greek-world/chronology/
(there was even a Dark Age in the Greek period)
http://armstrongeconomics.com/2013/01/29/8797/
(he means the 51 year private wave, vs 309 major cycle)
http://armstrongeconomics.com/models/7219-2/
(his cycle model explained, note the computer found it by correlating the ~$100+ million of data he had collected)
And the big difference compared to the early 1900s is we now have central banks in every country which have prevented the bank runs and mini-depression corrections that were regularly seen in the 1800s. Thus the collectivism has backstopped itself and run up the debt of the world to roughly 300% of GDP, meaning all of us would have to not eat for 3 years to pay it off. There is this erroneous (linked author Michael Pettis is a widely respected economist) notion that debt doesn't have to be paid and it is an illusion.
Let me link together some puzzle pieces for you that most do not see.
Worse, the $quadrillion of derivatives kept the world's capital locked into a (going on 31 years) bond bubble.
Here is a quote from the link above:
What is nonsense regarding backwardation? (My guess - markets are so rigged that nothing just matters)
Armstrong explained it:
http://armstrongeconomics.com/2013/03/06/gold-backwardation-the-real-story/
Quote
The Gold backwardation has been distorted as all sorts of reasons for everything. Normally, this is the market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity. Consequently, the resulting futures or forward curve is inverted whereby it is negative because gold is trading at even lower prices. This is simply driven by interest rates.
Quote
Backwardation in this case is not indicative of any shortage whatsoever or a collapse in trust of the dollar. The dollar has been rising! Just look at German interest rates on short-term paper went negative by 0.6%. This has NOTHING to do with fiat and people losing faith in paper money yada, yada, yada. If that were true, interest rates would not COLLAPSE, they would SOAR because people would not trust government bonds and they would have to pay up.
Quote
Backwardation in gold is a money issue and it is simply the yield curve nothing more. It has gone negative just as US government T-Bills went negative.
The carrying cost of gold in a future's contract is related to the cost of short-term borrowing. Armstrong claims that he showed the Islamists how to earn "interest rates" by selling gold forward in futures, since they could not religiously earn interest in normal ways.
This is (at least one reason) why the $quadrillion derivatives credit-swaps are holding up the financial system. This is how the Arabs get the oil money into the gold futures markets and keep the western central banks ZIRP policy going.
You've just read something that nobody else ever published (as far as I know).
Now you know why I know there is a global implosion coming.
The chart below shows the declining interest rates since 1981, which is the bond bubble because gains in bonds are the inverse of interest rates because as the current rate declines the bonds paying the older higher rate are worth relatively more (they pay more interest to the holder), i.e. those who purchased 30 year Tnotes 30 years ago are at their maximum gains now in price appreciation. We can't relate the same implications for the peak in 1920, because at that time interest was paid in gold (you could go to the bank and demand gold for your paper dollar), thus it was impossible to write derivatives because someone could call them in (crash them) just by cashing dollars for gold (as France was doing in the late 1960s causing Nixon to close the gold window in 1971). So our situation is inverted now with money and interest.
It will be a difficult adjustment for most people. They will futilely resist. As was the case for the Luddites in the Industrial Revolution. We are in the First Computer Revolution. Second will be quantum computing.
I don't think they'll resist at all. It doesn't take long for people to embrace something that (ostensibly) makes their life easier/happier/etc.
They are resisting now. What do you think socialism and central banking is all about? Why is Obama so popular?