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The economy is an ecology, the human ecology, and it is by far the most complex ecology on earth. I think, for instance, the typical big city hospital probably contains more complexity than all the other so-called natural ecologies in the world put together.
Think about it. Not only are the physical bodies and brains of the patients unimaginably complex, but so are the thoughts and feelings of the medical staff and patients, the personal interactions, the decisions, the knowledge base, the experience and training, the chemicals in the color of the paint on the walls, the production of the raw materials used in the bathroom tiles. The contents of that one building are so complex no human will ever understand them. Yet, for more than a century, politicians and bureaucrats have been meddling in the human ecology, which means they've been playing God. The economic trouble we see around us today is the chickens coming home to roost.
Right now, there is a big political movement to increase the number of regulations on the financial industry. I submit that the financial industry only needs one regulation, of four words: thou shalt not steal.
Numerous events mark major milestones. They should be viewed in aggregate. The major media networks have no vested interest in enabling more than trivial perceptions toward each story. Paradigm Shifts are magnificent processes, not easily made possible, which require great and steady powerful forces behind them. Cooperation must be present from most global players of importance. Here is a list of events. To be honest, if after reading them in entirety, a deep sense of tectonic changes is not sensed, then at best a sleepy state prevails in the cerebrum and at worst a compromised state dominates.
Inquiring minds keep asking "Is The Bottom In?" Of course, no one knows for sure. However, I believe it is not, and one of the reasons is the complete collapse in S&P earnings. In Is That Recovery We See? John Mauldin posted the following chart of earnings estimates (see article). The S&P closed Thursday at 888. That's a richly priced PE of 31. Let's assume that earnings recover to $48. That's still a richly priced PE of 18.5. A bear market bottom might sport a PE of 10-12 but let's be generous and use 15.
The current wish is that the dregs of GM and Chrysler will hire low-paid elves with no pension or health benefits and pump out hybrid and/or electric cars. It's conceivable that we could "reverse-engineer" a Prius or an Insight, but considering what a lousy job American car companies did on reverse-engineering everything that Japan or Germany pumped out over the past thirty-five years, the odds are pretty high that these new products will be just lame enough to fail against the established competition. What's more, they also present logistical and technical problems. For the hybrid, gasoline is still an issue (and Jevon's Paradox comes into play: the more efficient you make a means for using a resource, the more of that resource you will use). For both the hybrid and the electric car, the issue of how to get enough lithium for the batteries obtains, at least for now, given the current state-of-the-art battery technology. Most of this rare metal now comes from one place, Bolivia, and everybody wants "a piece" of it. Electric vehicles in large numbers depend on either coal or nuclear powered electric generation, each presenting special hazards. Both hybrids and electric cars would depend on the old installment loan purchase system -- at least to work in the current mode of suburban living, long-range commuting, and interstate highway travel.
One of the driving forces in economics, according to Robert Shiller of Yale, is the story we tell ourselves. We create happy versions of life in the boom times and sad ones in the bust. It might be said the story is the product of events. But the process is circular. Events drive the story, the story drives our behaviour and our behaviour drives events. Franklin Roosevelt grasped the point when he told the American people in 1933 that the only thing they had to fear was fear itself. So what is the story today?
"Fed chair Ben Bernanke has long argued that central banks can bring down long-term borrowing rates by purchasing bonds "at essentially no cost". His frequent writings rarely ask whether foreigner investors – from a different cultural universe – will tolerate such conduct. Mr Bernanke is betting that under a floating currency regime there is no risk of repeating the disaster of October 1931, when the Fed had to raise rates twice to stem foreign gold withdrawals, with catastrophic consequences."
Discussion of the 50% Retracement Rule,
potential future price levels, time studies, key dates, Fibonacci, Gann, Astro numbers, Robert Rhea's Great Depression analysis.
No doubt you're going to feel terrible about this. Top executives of Goldman Sachs, the Wall Street powerhouse, are in a pout about how they're being treated by you and me -- i.e., the public. These execs are used to being revered as financial geniuses, but having taken a $10 billion bailout from us taxpayers last fall, they're now widely viewed as ... well, as welfare recipients. Like other welfare checks, the big one that Washington doled out to Goldman Sachs came with some strings attached, causing the chieftains to get all huffy. Especially galling to these princes of privilege is the limit on salaries and bonuses that bailed out banks are allowed to give to those in the executive suites. Thus, Goldman recently threw a little hissy fit and haughtily declared that it will pay back our $10 billion to get the blankety-blank government out of its private business. Bold move! At last, Wall Streeters are reasserting their rugged, free-enterprise ethic, right?
Uh, not exactly.
Instead of posting story after story, playing the typical childish game we’ve been playing with the plants, morons, keyboard warriors and deliberately lost souls who wish to misguide you and your family into a new reality as a slave to the upcoming new world order let us pause and ask a question that nobody really wants to discuss in the “mainstream” nor those crowds where people hold their cocktails with their pinky fingers extended: What IF the TEOTWAWKI Crowd has been right all along? Now there’s a question you do not hear very often. Most of the time you read about attacks on the messenger, attempts to disprove items or facts that have already been validated a hundred times over, or government actions to silence anyone who is not with the program. But have you taken a moment to ask that question and if so, what kind of preparations have you undertaken to insure your family’s survival? What would you do if one of those formerly tinfoil subjects you dismissed out of hand because NBC news or Fox News did a story mocking the so-called “End of the World Crowd” happened in your community or to your family? Did the idea that just maybe there is a reason the mainstream media goes to such expense to work with the public relations departments of various government departments to get their point of view across as “fact” when in fact reality in your own eyes tells you that they are lying through their teeth?
If you have any info that would help, please contact me at my private email address: bailout@michaelmoore.com
