Monday, June 29, 2009

Bookmark This Post

I thought Jim Cramer's bottom-calling had set the benchmark for utter cluelessness. Then Dennis Kneale comes along...

"That waning sense of crisis" is the narcotic of a bear market Primary Wave Two setting the market up for a quick march up the steps to the guillotine of the coming Primary Wave 3. Be prepared.

Our Friends to the South

It has been awhile since we checked in on how PEMEX is doing. I've whipped up a few graphs illustrating their most recent production, use and export numbers. FYI, PEMEX does a very nice job of providing clean production data. The Saudis could sure take a page from these guys.

By the way, I suggest you take a deep breath before thinking too much about the implications of these three graphs. You might throw up all over Larry Kudlow's green shoots...

The above graph is just to put a "face" on how the implications of the Export Land Model might play out in Mexico. For those of us interested in keeping as much oil flowing to El Norte as possible, that flat domestic demand line is a comfort of sorts.

Above is the Export Volume from PEMEX broken out the Americas (the red dots) and by total exports. As you can see, the vast bulk of PEMEX production stays in the Western hemisphere, with the lion's share going to the United States.

Now let's project things out a bit, shall we? Below is a chart taking the historic average daily production numbers, plugging in a 7% yearly depletion rate and a 1% growth in domestic demand.

These not-unrelastic assumptions mean the death of Mexico as an exporter within 7 years. One might also assume that "above ground" factors could come into play as production plummets with the death of Cantarell to where, heaven forbid, the Mexican authorities might try and scale back exports to save a little juice for their own people down the road. Not likely, but just a crazy thought.

Action Items

Well, this is just another light from an oncoming train. Long before Mexico ceases to be physically able to export oil, my belief is that at the very least, exports will cease, probably within the next few years. It may be from a conscious decision to stop exporting or from 4GW attacks on infrastructure or from an inability to keep pumping at high rates due to a collapse in revenue due to worldwide Depression.

Who knows, but do realize that this directly impacts every gas tank north of the Rio Grande.

If you haven't already wrapped your head around the blowback from what that means, well, get busy thinking about it...

Friday, June 26, 2009

First Draft of Lord of the Flies

Ha ha haaaa. I've seen Lord of the Flies referenced in doomer posts about Peak Oil and other Collapse discussion sites for quite awhile, but never quite in this context:

h/t Jesse's Cafe Americian

Thursday, June 25, 2009


Most of you have probably seen this already, but anger, like a boiling pot of water, starts with a few bubbles here and there before erupting suddenly into a boiling mass of chaos.

Pensioners 'kidnap and torture' financial adviser
By Allan Hall in Berlin for the Telegraph
A group of wealthy pensioners have been accused of kidnapping and torturing a financial adviser in Germany after he lost £2 million of their savings in the financial crisis.

The men, dubbed the "Geritol Gang" by police after an arthritis drug, face up to 15 years in jail if found guilty of subjecting German-American James Amburn to the alleged four-day ordeal.

Two of his kidnappers are said to have hit him with a Zimmer frame outside his home in Speyer, western Germany, before he was bound up with duct tape, bundled into the boot of a car and driven 300 miles to the home of two of the abductors on the shores of Lake Chiemsee in Bavaria.

"I was bleeding from my eyes, nose and my mouth," he said. "But the nightmare had only just started..."

For What It's Worth

If anyone has any hard info to corroborate or dismiss this rumor, I'd appreciate a heads up. I have no comment other than now is a great time to add to your emergency preparedness kit. Get while the gettin's good, I say.

Latest Schultz Shock: a 'bank holiday'
by Peter Brimlow, MarketWatch
...In its current issue, [the Harry Schultz Letter] reports rumors that "Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days."

Yes, yes, it's paranoid. But paranoids have enemies -- and the Crash of 2008 really did happen.

HSL's suspicion: "Another FDR-style 'bank holiday' of indefinite length, perhaps soon, to let the insiders sort out the bank mess, which (despite their rosy propaganda campaign) is getting more out of their control every day. Insiders want to impose new bank rules. Widespread nationalization could result, already underway. It could also lead to a formal U.S. dollar devaluation, as FDR did by revaluing gold (and then confiscating it)..."

For those of you following George Ure's wild "rickety time machine" project, this sure seems to land right around the time of a call for a calamity in economics/finance in early November...


Coming to a Bank Near You?

Oh my:

Latvian firm accepts souls as guarantee for credits
A financial company in Latvia is offering residents loans secured by nothing but their immortal soul.

Riga-based firm, named Kontora, does not require credit history record or proof of employment. It grants loans of 50 to 500 Latvian lats ($100 to $1,000) to any adult after he or she signs the a very short agreement.

According to the agreement, the only security required of the borrower is their immortal soul, which they are asked to confirm as their previously unmortgaged property.

The loan is subject to one percent per day in interest until full repayment.

The period of full repayment is 90 days, and in case the borrower fails to return the money, the creditor gets full possession of his soul.

I can't find a link for Kontora, so I have no idea if this is true or just an urban legend. If true, what a great marketing tactic. Maybe all these payday loan places that litter strip malls around the country will pick up on the theme here in the U.S.? Hmmmmm.

Let's do the math on what these borrowers are facing. Mephistopheles loves the exponential function as it blinds the unwary with that long flat rise initially, before the compounding overwhelms you, crashes the system you built to sustain that growth and forces you to start all over from the ashes. Here we'll use the algebra version since it is easy to see and fits this situation quite well:

y = a(1 + r)^x

Where y equals the amount owed in 90 days, a is the initial amount borrowed, r is the 1% daily rate and x is the 90 day period:

y = ($1,000)(1.01)^90

y = $2,448

The above is the worst-case scenario, assuming no payments along the way. Give the Devil his due, he can do math. Surely the article is just a joke. Surely...

Wednesday, June 24, 2009

Us, Them, Corruption, Anger and Goldman Sachs

Stock up on popcorn now. I suggest the old school stuff that you pop on the stove-top in case there are electricity shortages, then dust off your AM radio (as a backup in case you don't have TV by then) for when the show trials begin and the Plutocrats are dragged before the courts or committees of justice or whatever veneer of due process will be smeared over the populist outrage that these MBA-toting idiots are helping foster by their obtuse, rapacious crony capitalism on steroids that has been pimped out across the globe over the last several decades. The tides of anger and vengeance mapped out by socionomic theory will be especially unkind to whiz kids of Goldman Sachs, in my opinion.

Matt Taibbi skewers them in Rolling Stone, leading off with fire, anger and gusto: "The first thing you need to know about Goldman Sachs is that it is everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money..."

Goldman Sachs

I haven't bought a Rolling Stone in years, but I'll be picking up this one after work.

Friday, June 19, 2009

Some Perspective

I was all amped up to write a few rants on the recent "finance reform" package put out by the Beltway Elites and the debt bomb being assembled on the Potomac. Then a moment of clarity hit - you know, like when you wake up missing your shirt in a city two hours away from the one you were "just having a few drinks" in the night before, only to find out it is two days later and you have no idea who that is whistling in the bathroom off of the strange and dimly let bedroom you find yourself in - you know, sort of like that.

That moment of clarity boiled down to: It just doesn't matter.

The "big picture" is already painted. The elites who think they are "leading events" and "working for the good of the people" and all that are just as caught up in this massive wave of mood change as the rest of us. All the world's a stage and we should play our parts as best we can, tending to our gardens, ready to seize the moment when fate may place us in a position to change the course of the future - whether locally or, much more rarely on a national or even international scale, by giving a shove to events in a direction that will lay a path to a more positive future.

But getting caught up in the minutiae of news and debate here in the dying sunlight of the old Great Bull Market, we should probably remember the words of another poet:

Thursday, June 18, 2009

Great Quote from Charles Hugh Smith

"A conditioned response is not a substitute for reality" - Charles Hugh Smith

Secession and 4GW Theory

I've avoided discussing secession in the context of the U.S. in any great depth and probably will continue to do so. Most of the jabber about seceding (Texas, Alaska, Aztlan, New Confederacy, Vermont Republic, Cascadia, etc.) is just that - jabber.

That said, socionomic theory - which has been very accurate so far in the early days of this decline - indicates that secession and xenophobia should bubble up from mere talk to significant, ugly action as this enormous bear market regains its stride soon.

Bill Lind has been pondering the same topic and, as usual, has some insights worth thinking about.

On War #307: Calling President Davis
by Bill Lind
FJ NOTE: The old D-N-I site has changed. Bill Lind's works are now archived at GlobalGuerrillas. The link above takes you to a .pdf, scroll down to #307 for the proper citation.

...if America breaks up it is likely to do so along non-geographic lines. Fourth Generation theory suggests that the new primary identities for which people are likely to vote, work and fight will not be geographical. Rather, they will be cultural, religious, racial or ethnic, ideological, etc. Following the sorts of massacres, ethnic cleansings, pogroms and genocides such Fourth Generation civil wars usually involve, new geographically defined states may emerge. But their borders will derive from cultural divides more than geographic ones.

The fact that a second American civil war would be nastier than the first — itself no picnic — does not mean it won’t happen. That depends on whether the Washington Establishment can recognize it has a legitimacy problem, get its act together and provide competent governance. It is currently failing that test, and I expect it to continue to fail. Any member of the Establishment who dares subordinate court politics to the good of the nation or advocates more than very modest change quickly finds he is no longer a member of the Establishment...

...the idea of an American break-up is no longer off the charts. It may yet prove time for President Davis to think of returning to Richmond, and for New Urbanists to design some good castles."

Again, it all dovetails together under socionomic theory - secession, breakdown of larger structures built up during the bull market in mood, the move towards loyalty to tribes or local units, the building of physical walls and structuring localities for local food production.

I have no good advice for you. Watch for such movements. The federal government will retain immense powers for the foreseeable future. Do you jump on board with a secessionist party? Do you hold loyalty to the Union and pray that the elites will regain some sense of sanity? As crazy as it may sound, you may be forced to make a decision in the coming decade along those lines...

UPDATE: Speaking of walls and protecting "us" from "them," I think this company may be on the vaguard of an enormous new business model in the coming years - a combination of the socionomic themes of walls/barriers and the "Green" meme that is being used to express a lot of the angst and anger boiling up in this era of negative mood:

Site of Bussy St Georges Station (access to Disney Land Paris). This hedge was planted 10 years ago. [Courtesy Sinnoveg]

Created in 2004 within the Pépinières SOUPE Group, the SINNOVEG Company (Société d'Innovation Végétale) develops the following activities:

  • Research and development in landscape design
  • Securitizing of sites, goods and persons with concepts integrated in the environment
  • Research in cultivation of plants adapted to difficult situations.

This securitizing of sites with a natural concept is based on planting of thorny plants, weaved to each other and strongly bound to metallic elements strengthening the reinforcement.

This concept allows to fight against :

  • Intrusion
  • Burglary
  • vandalism
  • corporal accidents

These folks are a prime example of working with the waves that drive us all, not against them...

UPDATE 2: What's old is new again. This concept stirred up a memory of a history class long, long ago, on the use of hedges for both livestock enclosure and protection:

"...the Nervii, from early times, because they were weak in cavalry, (for not even at this time do they attend to it, but accomplish by their infantry whatever they can,) in order that they might the more easily obstruct the cavalry of their neighbors if they came upon them for the purpose of plundering, having cut young trees, and bent them, by means of their numerous branches extending] on to the sides, and the quick-briars and thorns springing up between them, had made these hedges present a fortification like a wall, through which it was not only impossible to enter, but even to penetrate with the eye..." - Julius Caeser, Commentaries, the Gallic Wars, Book II.

Tuesday, June 16, 2009

City vs. Citizen

Expect more of this. A lot more...

Ohioans ticketed for parking in own driveways
TOLEDO, Ohio (AP) -- Residents of Toledo, Ohio, are complaining that they received $25 tickets for parking their vehicles in their own driveways.

Mayor Carty Finkbeiner (FINK'-by-ner) says he stands by the citations handed out last week by the Division of Streets, Bridges and Harbor. He says the tickets were issued under a city law against parking on unpaved surfaces, including gravel driveways.

During a news conference Monday, Finkbeiner ignored a reporter's question of whether the crackdown and fines were related to the city's budget crisis...

On File for When the Show Trials Commence

Mr. McCulley best be getting his defense together now for the Congressional hearings or the local Comittees of Public Defense or whatever populist "eat the rich" structure is going to blossom in the Long Night of this bear market. If he is even going to be allowed a defense attorney...

Dubya's Double Dip?
Published: Friday, August 2, 2002

...A few months ago the vast majority of business economists mocked concerns about a ''double dip,'' a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off...

...But wishful thinking aside, I just don't understand the grounds for optimism. Who, exactly, is about to start spending a lot more? At this point it's a lot easier to tell a story about how the recovery will stall than about how it will speed up. And while I like movies with happy endings as much as the next guy, a movie isn't realistic unless the story line makes sense."

Note how super-big-brain Mr. Krugman refers to the housing bubble scenario as a "happy ending." Huh.

h/t Karl Denninger

Monday, June 15, 2009


"What's the difference between California and Latvia? Answer: A week." - Jenna Orkin at FTW

Latvia risks becoming first EU member to face economic meltdown
By Adrian Blomfield, The Telegraph
Latvia is in danger of becoming the first European Union member to face total economic meltdown, experts have warned.

The tiny Baltic state's government has been urged to devalue its currency or risk the collapse of its economy – despite fears such a move could cause turmoil elsewhere in Europe.

Although devaluation would damage Latvia's ambitions of joining the euro, financial analysts said it was the only hope of avoiding a catastrophe after an international bail-out failed to reverse the country's fortunes..."

We keep bumping up against DJIA 8800, which was my initial minimum target for the Suckers' Rally. I have no reason to change my mind on this as a key level. While I personally think we have more room to run to the upside, it will be a desperation surge, running on vapors and then the nightmare monsters that all the bright boys and girls sweated about last fall will actually crawl from under the bed and walk the earth in daylight. Summer will not be pretty. Enjoy this corrective wave. Pause to look at flowers a little longer. Watch a sunset. Turn off the tube and go for a walk. Get ready, but don't gnaw at yourself with worry. Be prepared.

None of this is to be construed as trading advice. If you trade financial instruments based on anything you read at FutureJacked, baby seals will club sailors to death - and you might lose money.

Friday, June 12, 2009

Fear on Display

Hat tip to Gary North for the following graphic from our friends at the Federal Reserve, which shows the "money multiplier" in recent decades. One interpretation is that it shows the level of fear at the banks. When they are more optimistic, they are more inclined to lending their reserves. When they are not, well, you see the result:

Mr. North strongly believes that inflation is inevitable and definitely rejects the idea that deflation can take hold for any sustained period of time (my interpretation of reading his Reality Check newsletter over the past four or five years). This chart above screams out one key item missing in that analysis (shared by many other bright minds, and Gary is very sharp) - that social mood drives all before it. Mood makes markets. News tells stories we make up to explain mood and its effects. What you are seeing is nothing less than fractional reserve banking choking itself to death as optimism has shifted to fear.

Fractional reserve banking thrived in a multi-century era of unprecedented optimism. We are in the early stages of an era that will correct that optimism and fractional reserve banking could well be an early casualty of that shift.

Thursday, June 11, 2009

Anger and Unfulfilled Promises

Another thought on anger, backlash and science in the popular mind. I was reading the latest from Tom Whipple on Peak Oil and think he may be dancing around a meme that the growing negative mood could harness to rip through the population like a firestorm:

The Peak Oil Crisis: A Letter From Baghdad
by Tom Whipple, Falls Church News Press
A couple of weeks back the peak oil community received a letter from an officer serving with our forces in Iraq.Despite numerous distractions in Iraq these days, this officer is so concerned that peaking world oil production will soon become a serious problem that he began discussing the future of America's energy supply with soldiers in his unit. What he concluded has a message for us all.

He found that most people have no trouble accepting the premises of peak oil- that there is a finite amount of crude underground, that the easy and cheap to extract oil is nearly gone and that world production will go into an unstoppable decline. The disconnect from reality, however, comes when contemplating the consequences of this event, for nearly all believe there are many obvious alternatives to oil. We know what they are: nuclear, solar, wind, waves, tides, shale, oil sands, coal-to-liquid, biomass, etc., etc. In the mind of most, it is a rather simple matter of switching from oil to any or all of the alternatives so that life-as-we-know-it can continue without missing a beat...

...This all-will-be-well message is always bereft of detail. Nowhere is there mention, of the vast amount of oil being consumed around the world each day, anticipated rates of depletion from existing oil fields, nor of the trillions of dollars that will be required to finance the next round of exploiting increasingly more difficult to recover oil. From time to time, the message is punctuated with the word "technology". Not any particular technology, just the implication that the technology which has brought our civilization this far will be there when we need it...

Just as I believe you'll see show trials of finance execs and political big shots in the coming years as the Great Collapse unfolds, you'll see plenty of other scapegoating as well and I think science and technology as general concepts will be high on the hit list.

As I've mentioned before, I regard Peak Oil as a real issue related to actual physically measurable recovery and depletion rates of petroleum (and natural gas) as extracted by our currently built-out infrastructure, distributed by the legacy infrastructure built out over the great era of optimism we departed from beginning in 2000, and governed and heavily taxed by the existing political elites. Oil and natural gas, extracted as we know it today, will deplete. "Oil" sands, tar mats, shales, etc. have vast and known problems of scale-up.

But I also believe in the primacy of social mood as a driver of technology trends. Technology and science - long suppressed by princes and potentates - has had a good run over the last three hundred years or so. Materialist science smashed a corrupt religious orthodoxy and liberated untold millions from hardship. But all trends shift. As I've written before - had Peak Oil occurred in the 1950's, some sort of great crash program would have been devised to meet the challenge and deal with the huge reorganization of society it would have required.

Peak Oil hitting in a time of negative mood will almost certainly lead to a charlie foxtrot of disbelief, outright denial, infighitng among pressure groups who think they can benefit from it and in the end, any large movements or efforts to mitigate Peak Oil's effects will collapse in a heap of wasted energy.

One can easily imagine how the Peak Oil meme - which I regard as an outstanding meme that could be used to encompass and express much of the anger and fear that will boil over as this Grand Supercycle Bear claws away at us over the coming years - could devastate one area still relatively unscathed by popular anger - science and technology workers.

Everyone is constantly hears about "new technology" as Mr. Whipple points out above. When those promises can't be kept - and they can't - then all bets are off. The great god Tech, that millions bow down to every day, will be shown to have feet of clay. When the U.S. must learn to live within her own oil production capabilities - with maybe a few million barrels per day in imports - then the worm could turn. Throw in the "magical thinking" that occurs in bear markets and you have a recipe for blowback that could devastate science and technology for centuries. If algae-based biodiesel can't be scaled up rapidly, I can easily see the science staff of many U.S. National Labs undergoing a purge that Stalin would have been proud of. When the natural gas pipelines begin dying once there is not sufficient gas to keep them pressurized, haul out the renewable energy techies who swore they could get microbe-generated natural gas up and running and send them to work camps for failing The People (if you think that is just me being extreme, read up on the Chinese Cultural Revolution some time).

In a perverse way, a retreat from technological-intensive work could meet many needs. For example, a collapse in agricultural output - driven by destruction of credit available to farmers, lack of fuel for equipment, bankruptcy of companies that distribute food goods, etc. - could play right into a "back to the land" and "all organic" movement. The mood change could be there to "drop out." The extra workers needed to intensively farm would be there - these former stock brokers will still have to put food on the table somehow. An artist of some sort will almost certainly step forward and feed this psychological need for justification by writing a novel glorifying a neo-Luddite lifestyle or directing a smash hit film running down tech geeks and big brain scientists and playing up the drop-out lifestyle.

This is obviously just speculation right now, but I think that as more and more faith and hope is placed in "technology" - the potential for a disastrous reaction when that faith is shown to be baseless - builds.

The wheel of socionomics grinds on. Make sure you do not get caught between it and the grinding stone.

Tuesday, June 9, 2009

Fear and Loathing in Science

In my day job I am involved in both project management as well as R&D at a fairly unique research facility. It's a fun job most days. It also provides a very interesting vantage point to watch how the consequences of this huge wave of negative mood and emotion sweeping us all along will play out in the supposedly rational and fact-based world of science, technology and innovation.

The tides of emotion drive everything from the types of research that seem popular, the products that people want to buy and develop and especially drives the political funding of basic science.

These waves of emotion have affected science from the days when real scientific work was forced to be conducted underground due to concerns that religious authorities might burn you and your trusty lab assistant at the stake up through the "modern" era with the pitiful sight of the United States abandoning the exploration and eventual exploitation of the solar system - which occured during the bear market of the the 1970's, I might add. The Cycle Wave 5 optimism that we saw up through 2000 was not enough to even get astronauts back on the moon, another interesting validation of the "real" strength of Third Waves versus the sometimes-illusional strength of Fifth Waves.

With that context in mind, the following article takes on special interest:

Entering a dark age of innovation
by Robert Adler, New Scientist
SURFING the web and making free internet phone calls on your Wi-Fi laptop, listening to your iPod on the way home, it often seems that, technologically speaking, we are enjoying a golden age. Human inventiveness is so finely honed, and the globalised technology industries so productive, that there appears to be an invention to cater for every modern whim.

But according to a new analysis, this view couldn't be more wrong: far from being in technological nirvana, we are fast approaching a new dark age. That, at least, is the conclusion of Jonathan Huebner, a physicist working at the Pentagon's Naval Air Warfare Center in China Lake, California. He says the rate of technological innovation reached a peak a century ago and has been declining ever since. And like the lookout on the Titanic who spotted the fateful iceberg, Huebner sees the end of innovation looming dead ahead...

...In an effort to find out, he plotted major innovations and scientific advances over time compared to world population, using the 7200 key innovations listed in a recently published book, The History of Science and Technology (Houghton Mifflin, 2004). The results surprised him.

Rather than growing exponentially, or even keeping pace with population growth, they peaked in 1873 and have been declining ever since (see Graphs). Next, he examined the number of patents granted in the US from 1790 to the present. When he plotted the number of US patents granted per decade divided by the country's population, he found the graph peaked in 1915...

Now, the techno-optimist inside of me chirps up with all sorts of objections. The per-capita way of evaluating innovations is suspect as is the fact that a few geniuses can serve as a fountain of vast numbers of patents (i.e. Edison), though it does give a feel for how much slack society provides for people from all levels and castes to develop their talents. In addition, the regulations around the development of coal and oil power were next to nothing, compared to the regulations which surround the development of nuclear power - a big reason the development curve and build-out of useful applications has been so flat for nuke science.

My personal objections aside, socionomics is the study of mood and how that social mood provides the framework in which we operate. If we are fizzling out into a long era of negativity then that means the support structures that undergird innovation and the unleashing of genius will be damaged.

The era he points out, 1873-1915, was characterized by optimism, very little government regulation of business, few nuisance taxes, junk fees, etc. The technology paths chosen were wide open for development and the energy to power the devices was abundant and ridiculously cheap. The social mood that served as the foundation for the upsurge in innovation and patents, the unleashing of talents from individuals in all levels of society (witness the huge numbers of developments per capita) fit the technologies perfectly (or the technologies chosen for development fit mood perfectly...). The path that innovation and genius faces today is vastly different and growing worse by the moment.

By that I mean, we could have twenty new Edisons born tomorrow, but if they grow up in this coming era of a Grand Supercycle Bear Market, then the legal protections for developing intellecutal property (patents, royalties, copyrights, etc.) might be weak or non-existent and so the fuel for the development of their talents (income streams from successful innovations and basic breakthroughs, a consistent legal framework that allows for development of industry or enterprise) will not exist and their talents will not have an outlet for the full development.

The assertion above has much in common with Peak Oil, in my opinion. Huebner has identified a real trend in my opinion, but when you leave out the "ocean" of mood we all swim in, you miss the fundamental point of science - building systems of theory that match the facts of the world around us, systems that can be used to improve our lives and challenge us as a species. Like Peak Oil, I think he has a point - the current systems we've built up, the types of technologies we've chosen to develop, the disciplines our educational systems focuses on - they are all mature or very mature to one degree or another. Peak Oil will come, but in my opinion, humans will adapt and, as the Elliott Waves shift from downtrend back to an uptrend years or decades hence, the adaptations and work-arounds in the face of expensive and unreliable supplies of petroleum will fluorish in a new era of optimism. I think this decline in innovation is real as well - but trends follow waves - not straight lines.

Systems that are highly developed, systems that have interpenetrated every aspect of our lives, systems that are remarkably efficient - and brittle - must often be smashed in order to be replaced. Reform becomes impossible in the face of entrenched regulations, entrenched special interests and a lack of motivation to try something new. Bear Markets break through these barriers. There are vast fields of science that have lain fallow for centuries - leveraging vibrational mechanics for work, new interpretations of quantum mechanics (whether the TEW theory, the theories proposed by the folks at Blacklight Power, or others) and they are ripe for development - in a coming era, unfortunately. Ideas that are currently too far from the mainstream will be choked off, even if they show great promise at mitigating some of the worst effects of collapse.

That's why Nature and Nature's God has provided us with Grand Supercycle Bear Markets, in my opinion. Bear Markets discredit the established elites, provide for the smashing of boards and commitees and "peer review" structures that strangle new ideas at birth.

However, getting from here to there may be tricky, to say the least.

I expect science to become almost a dirty word at some point in this era of negative mood. Whether the fear and anger memes are tarted up in the "green" movement jargon or a religious backlash, there may come a time when science must go back underground, when brilliant minds will be forced to dull their colors to the outside world and pursue their work in secret, waiting for mood to turn and the next Great Renaissance to ignite.

Thursday, June 4, 2009

A Couple of Nuggets

I have a few socionomics-related articles cooking in the pot as my work slowly becomes less hectic, but they will have to wait a few days.

In the meantime, I'd like to suggest checking out a recent series of posts over at John Robb's Globalguerrillas site and a quick, factual treatment of what a 4kT nuke's damage potential is. Sort of all over the place I know, but the nuke article is a good dose of reality to combat some of the more breathless fear-meme spreading articles that popped up recently and the "Standing Orders" for 4GW entities is great food for thought as well as a good roadmap of what you should prepare for.

Strategic Uses for Tactical Nukes—not!
by Geoffrey Forden, at
...I certainly don’t want to imply that a 4 Kt nuke could not kill a lot of people. It certainly could. However, I have been thinking about whether or not North Korea might be able to use a few 4 kiloton (Kt) nuclear weapons—if that is their true yield—in what we in the West would consider tactical situations but in the context of the Korean peninsula would have strategic consequences. After all, it would seem that the US and South Korea would be in a very vulnerable position if the North launched an all-out invasion...

As an aside, we are in the middle of hosting a big series of conferences and workshops on nuclear material safeguards (part of the reason I haven't posted much recently, been busy teaching and helping with workshops). I want to flesh them out some, but I have some thoughts that I think are worth sharing in the near future.

Standing Orders for GlobalGuerrillas

Standing Order #1 Break Networks
Standing Order #2 Grow Black Economies
Standing Order #3 Virtualize Your Organization
Standing Order #4 Repetition is More Important Than Scale
Standing Order #5 Coopetition Not Competition
Standing Order #6 Don't Fork the Insurgency
Standing Order #7 Minimalist Rule Set Works Best
Standing Order #8 Self-replicate
Standing Order #9 Share or Copy Everything That Works
Standing Order #10 Release Early and Often
Standing Order #11 Co-opt, Don't Own, Basic Services

Note how the mindset and consequences of a negative social mood (especially a huge wave of that negativity, such as the one we find ourselves just entering) as theorized by socionomics play directly into these guiding principles for groups that would break down the current Order.

Interesting how it all comes together...

"If human thought is a growth, like all other growths, its logic is without foundation of its own, and is only the adjusting constructiveness of all other growing things. A tree cannot find out, as it were, how to blossom, until comes blossom-time. A social growth cannot find out the use of steam engines, until comes steam-engine-time." - Charles Fort, Lo!, 1931

Tuesday, June 2, 2009

The Bureaucrats Draw Out the Long Knives

While I dig out here at my day job, ponder the situation in California described below and think about how it would play out in your state and your community as the entrenched civil service elites "teach the public a lesson" about refusing their demands for more tax revenue (and then see what percentage of you local and state budgets go to straight personnel costs - salary, benefits, pension) and ponder it some more as you read about the local tax collection situation:

Budget woes placing California into unknown territory
By Kevin Modesti, Staff Writer, Contra Costa Times
...Kotkin thinks officials will seek the most noticeable cuts first to try to teach voters a lesson for rejecting the ballot measures.

"They'll find ways to try to hurt the public and create a sob story instead of saying, `Let's have some shared sacrifice here,"' Kotkin said from his home in Valley Village. "I think it's going to be painful."

Fred Siegel, a New York history professor and political adviser who wrote a book about America's big cities, said the "fiscal Armageddon" threat was a blown-up version of the Washington Monument Gambit, the term for when an agency fighting for funding threatens to close down a popular attraction.

"(Sacramento) says, `We're not going to make sensible cuts, we're going to impose pain,"' Siegel said. "`You don't give us what we asked for, and we'll close down the things you like best - and we'll release a lot of dangerous people (from prison)."

"It's "highly unlikely," Siegel said, that the necessary cuts can't be found in California's huge budget...

Laughter, the Worst Medicine

When they start laughing, your leverage, your prestige, your negotiating position - it all goes to hell. Oh yeah, and when make obvious lies to people who can actually do math (non-Americans), expect to be laughed at:

Geithner tells China its dollar assets are safe
By Glenn Somerville
BEIJING, June 1 (Reuters) - U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency.

A major goal of Geithner's maiden visit to China as Treasury chief is to allay concerns that Washington's bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds...

..."Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience
, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home...

My country has come to this. Begging and lying to the Chinese. Ugh.