Thursday, August 27, 2009

Socionomics in Action

Well, The Socionomist is only four issues old and has scored an early predictive hit. In the July Issue there was an extensive article by Euan Wilson entitled "The Coming Collapse of Modern Prohibition."

Mr. Wilson presented data on how the ingestion of drugs/alcohol are often restricted by law during periods of positive mood and decriminalized or legalized in periods of negative mood:

"History shows that mood governs society's tolerance for recreational drugs. A rising social mood produces prohibition of substances such as alcohol and marijuana; a falling period of social mood produces tolerance and relaxed regulation. In the case of alcohol, the path from prohibition to decriminalization became littered with corruption and violence as the government waged a failed war on traffickers. Eventually, as mood continued to sour, the government finally capitulated to public cries for decriminalization as a means to end the corrpution and bloodshed.

We predict a similar fate for the prohibition of marijuana, if not the entire War on Drugs. The March 1995 Elliott Wave Theorist first forecasted the Drug War's repeal at the end of the bear market, and in 2003, EWT stated that during the decline, "The drug war will turn more violent. Eventually, possession and sale of recreational drugs will be decriminalized."

Our friends south of the border have endured levels of violence greater than what U.S. soldiers faced in Iraq over the last half-deade. Mood is finally changing enough to get this:

Mexico quietly decriminalizes drug use
Now marijuana, cocaine, LSD, and heroin will be tolerated for personal use. It's part of a bid to free up resources and jail space so that authorities can focus efforts on big-time traffickers.
by Sarah Miller Llana, Christian Science Monitor
MEXICO CITY – In 2006, a Mexico initiative to decriminalize limited personal drug use set off a storm north of the border. The San Diego mayor called it “appallingly stupid.” Mexico was painted as a potential haven for drug tourism, the next Netherlands of Latin America.

The initiative, not surprisingly, quickly died.

Three years later, in the midst of a massive drug war that’s taken more than 11,000 lives and brought the US and Mexico into closer and more costly cooperation, the initiative has quietly become law. And there’s hardly a peep.

Now not just marijuana, but cocaine, LSD, and heroin will be tolerated for personal and limited use. That means about four joints, or half a gram of cocaine, or 50 milligrams of heroin. Bigger quantities, sales, and public consumption are still strictly forbidden...

What's changed in three years? Mood has shifted towards the negative. The death toll has skyrocketed in Mexico. The mass mentality was ripe for a change.

For those of us in El Norte, watch California. My guess is that they will be a "tipping point" state for outright defiance of the federal government and broad-spectrum legalization.

Action Items

Lot's of gray market small business opportunities here. Not being conversant with the recreational drug community, I'll just hit a few items I think you might be able to position yourself to take advantage of (others are much further along in ganjapreneurship than I could hope to be):

1. Custom rolling papers. This could be a good business even pre-legalization. As taxes have risen sharply on cigarettes, more and more people are turning to growing their own tobacco and rolling their own tobacco cigarettes. If you own a small machine shop, I imagine a robust, automated cigarette roller might be a design worth trying.

2. Medical Marijuana "lessons learned." For those of you who think you could be a consultant, compiling a book of "lessons learned" from the medical marijuana movement out West could be a big hit once full decriminalization comes along. Not just legal stuff, but interaction with customers and newbies to this product, categorizing various groups and watching side effects (and yes, I discount anything written about drug side effects put out by government agencies - they mean well, but much of it is absurd), and generally providing a marketing strategy for this coming wave of entrepreneurship.

3. Tapping into the vast "how to" underground that exists in growing dope, making LSD, etc.

I ain't gotta like it, but this is coming folks. Be thinking how best to either insulate yourself or how to help take advantage of it.

Wednesday, August 26, 2009

Socionomic Alarm: China Proposes Restrictions on Exporting Rare Earth Minerals

Another news story laced with socionomic themes:

World faces hi-tech crunch as China eyes ban on rare metal exports
By Ambrose Evans-Pritchard
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price...

Yes, there are mine sites that closed back in the 1990's that could be revived, but think about structural razor wire they have to navigate: EPA restrictions, changed mine standards, county and state regulations that will eat into company operations - all in the face of a crippled credit system. Bringing back all that shuttered capacity won't happen overnight.

Socionomics calls this on many levels - the "restrictions" piece where a negative mood leads to a "gotta hold onto our stuff, to heck with the rest of them" on China's part to the polarization found in the environmental movement that will certainly oppose bringing mines back to life in the U.S. and other "advanced" countries.

"Stuff" matters. Food actually has to be grown. Useful minerals must actually be mined. The vast bulk of people who live lives intermediated by computers still don't get it. This "magical thinking" that socionomics calls for in bear markets will play a huge role in things like the reaction to resource wars which can flare up in troubled times - if we just wish hard enough, someone will sell us these things. Don't worry about fixing our own house. Someone will come along and help us. It will all work out, just pop another anti-depressant and watch some TV...

Speaking of socionomics, the August issue of The Socionomist came out today. Whoo-hoo! I know what I'll be doing once the kid gets to bed tonight. Looks like a good one.

A Reason to Read the Farm News

Please put this on your near-term threat watch:

Soybeans soar 5 pct on immature crop, China
By Christine Stebbins

CHICAGO (Reuters) - U.S. soybean futures rose more than 5 percent Monday, extending gains to a one-week high on jitters that the immature American soy crop could be hurt by chilly temperatures.Ongoing Chinese demand for U.S. soy and a 10-month high in equities on optimism about economic recovered fueled additional buying.

"Beans are up on China buying, drought in China and ongoing worries about what devastation there would be if an early frost hit," said Vic Lespinasse, analyst for

This is one of those stories that will hopefully just be a passing worry. For those of you down Texas way and on the East Coast, you've had a lot of hot weather this year, but for those of us in much of Flyover Country, we've had a very mild summer, almost worringly mild.

If the weather stays cool and we do get a hard frost in September (unlikely, but not an unreasonable worry) then the soybean crop could be hurt and hurt badly.

Stocks of grains are low world-wide and this could cause significant food price gyrations and farm failures. In other words, a big steaming bowl of not-good.

I don't think we are talking famine, but it certainly could mean food taking a bigger bite out of people's budgets going into winter.

Monday, August 24, 2009

A Sun Oven Test

The weather was clear and sunny this weekend in my little speck of the world. I decided to break out the Sun Oven and do a test run. You never know when fate might deal you a power outage.

This test was simple - potatoes and onions from my local farmer's market and some salt and pepper. I cheated a little by putting in butter. If/when TSHTF the death of local dairies will be felt pretty quickly I imagine.

As you can see, the Sun Oven doesn't have a huge capacity, but it gets the job done for this side dish.

Positioning the Sun Oven is important. I have good sunlight in my back yard.

275 deg F. Not bad for a black box and some glass. After a 6 hour run, I pulled the potatoes. By the end, the glass was completely fogged over with condensation. This means that when I was shifting positions I must have caused the lid the shift off the dish - this reduces the max temperature that can be achieved.

Just like that, a mess of very tasty taters and onions.

Some Lessons Learned

  • The manual that came with the Sun Oven noted that you can reduce the liquids required because stuff doesn't boil off like in a regular oven. They were not kidding. The few tablespoons of butter I put in had formed a nice tasty pool at the bottom of the dish - adding lots of flavor and proving that it is not as liquid intensive as regular cooking.
  • It tasted the same as fried potatoes and onions, only less greasy.
  • This is not easily portable. Yes, I know the manufacturer's website shows a picture of guy with his Sun Oven strapped to his backpack. It is nicely built, but not quite that robust - in my opinion. If you get refugeed, I don't suggest taking this particular design with you. There are some improvised versions you can make do with, or at least build once you land somewhere.
  • It seemed to hold 275 deg F for most of the day. There were a few clouds and I had an excellent angle on the sun for much of that time, though I did not refocus it on the sun every half hour, as recommended. I will have to play with it in some non-optimal situations to see how it peforms.

Overall, I am pleased. This has been part of my camping/emergency kit for a couple of years now. I bought it right after I learned about Peak Oil. I think it was some sort of "do something!" reflex and I picked one up from Matt Savinar's Life After the Oil Crash. I used it a few times then left it to collect dust after my initial phase of Peak Oil panic subsided and the long-term planning phase set in. The time has come to get some miles on it, I think.

Great Quote

"...every man-Jack and woman-Jill around the levers of power and opinion weighed in last week with glad tidings that the world's capital finance system survived what turned out to be a mere protracted bout of heartburn and has been reborn as the Miracle Bull economy. Our worries over. If you believe their bullshit. Which I don't..."

- James Howard Kunstler

Friday, August 21, 2009

Pump, Dump, Then...

If you are an insider in this market, you've been loving this "pump" over the last 5ish months:

DJIA 6 Month Chart via BigCharts

It has allowed you to dump, at great profit in many cases:

Insider Sales Aug 20 -1

h/t Zerohedge

We are on the cusp folks. How much longer? Days? Weeks (my opinion)? Months?

Have an emergency plan in place. Be able to get by if the ATMs don't work for awhile. Most importantly, be prepared mentally for a huge shock to the system. I don't know what "excuse" the the masses will use to blame for the coming downturn - derivatives bomb? Middle East War? Pandemic Hybrid Flu?

Who knows. Just know that mood drives news. That clarity alone should keep you two steps ahead of everyone else.

Wednesday, August 19, 2009

Coming to Poverty Late in Life

The eXiled is a raunchy, if often incisive, radicalish web tabloid that I came to via The War Nerd and their "correspondent" in Mexico who has been covering the rise of the narcotraficantes over the years through a haze of pot smoke.

One of the editors, John Dolan, has entered into a gray and ugly land that many older members of the professional class may be force-marched into in the coming year or two - the land of absolute poverty.

The whiny academic envy-speak aside, here is a man who is a creature of the education establishment, has all sorts of credentials, taught in established colleges and now, late in life, finds himself utterly unprepared for the brutal hell of poverty.

Living With Cons and Paupers in Canada’s Arctic Waters
By John Dolan
I came to extreme poverty late in life, and did very badly at it. I should have done some kind of crime. But what kind? That’s what I couldn’t figure out. What kind of crime can you actually do, if you aren’t a lawyer and don’t understand computers?

There were certainly plenty of people who could have offered me some advice on the matter. We were living on a boat, moored in a skuzzy little harbor full of small-time criminals. The one guy who went off to a job every day was a figure of awe and mockery, a freak. Everybody else scavenged or stole to buy their booze and weed...

Now, this guy is an extreme, almost a caricature of the wacked-out liberal arts academic whose worldview is informed solely through the lens of class envy, race-gender-oppression studies, a myopic focus on academic work with little to no hard skills to fall back on and who, apparently, likes to dull his senses via drugs and booze. Not a good combination for someone thrust into a survival situation.

That said, how different is he than 10 or 20 million office drones out there in America? Sure, he is an extreme, but the difference in only one of degrees.

  • How many middle managers or younger folks in the work force have a strong Ambien or Prozac habit? What happens when that supply is cut off, cold turkey?
  • How many people have lived their ENTIRE work lives doing jobs totally intermediated by computers? Not just machinery, but computers and/or stacks of paper?
  • Speaking of machinery, how many have never even banged a knuckle on oily equipment or found a work-around for a leaky pipe or fouled valve?
  • How many will do just what this guy did - sit around and bitterly wait for someone to save them, dreaming of committing petty crimes? How many of these amateurs will actually give crime a chance?

The Great Collapse is upon us (in my strong opinion) and is possibly even weeks to a few months away at most.

A lockup of the financial system, heading into harvest (yes, all those veggies and grains have to be harvested from the field and a functioning credit system is absolutely necessary for the functioning of the modern crop delivery system for those of you in the urban cores) and then into winter will leave millions of office professionals without a job, without cash flow, without access to the mood-altering drugs that kept them going and without anything to fall back on.

What do you do with all of them? What happens to them when the Piggly Wiggly doesn't get fully restocked for a week or two at a time? Where do they go?

My only advice: don't be one of them.

Avoid the "refugee" camps that will almost certainly spring up if you possibly can. We have a population who will not able to handle the first few months of this Primary Wave 3. Clarity will come, for most, but the horrible purging and hangover between here and there will leave its scars.

Thursday, August 13, 2009

A Few Days Dark

FYI, there will be no posts until next week. I am working hard to try and land significant funding for some IP I've helped develop and just don't have the time to dedicate to the blog. It is a bit schizophrenic on my part - I truly believe we will be in a ferocious down turn by Thanksgiving at the absolute latest, while at the same time trying to plan for a prototype of a new way to make medical isotopes. Shoulda had the idea a few years ago. Oh well, we'll see if we can lock in some funding before it all goes to hell. Better yet, we could somehow be wrong and the bubble might eek along another year or so. Doubtful.

Have a great weekend and as we've been saying all summer - enjoy this brief period in the twilight of the dying Bubble Epoch.

Monday, August 10, 2009

It Is Hard to Change Your Mental Software

I'm sure most FutureJacked readers have already caught this juicy nugget, more evidence of the rich weaving their own ropes for use by the bubbling masses of wannabe-brownshirts out there (hat tip reader WL - thanks as usual):

Real Housewives of Goldman Sachs
from The Deal
If producers at Bravo are looking for a new cast to add to its "Housewives" franchise reality show, someone should pitch them on "The Real Housewives of Goldman Sachs."

Laura Blankfein, wife of Goldman Sachs Group Inc. (NYSE:GS) CEO Lloyd Blankfein, and Susan Friedman, wife of Goldman executive Richard Friedman, reportedly caused a brouhaha at a Hampton's social event last weekend at Super Saturday, a charitable designer clothing sale, cutting in front of ticket holders.

Blankfein reportedly said she wouldn't wait with "people who spend less money than me." If that comment holds true, perhaps Lloyd should have a sit-down with his wife and have the same speech he gave his employees about keeping a low profile...

These "ladies" just don't get it - yet. Another example of just how hard it is to change how you operate out in the world when your mental software is built to thrive in an age that is now past us.

Speaking of the shock troops that are being prepped by the Powers That Be to channel the tsunami of rage and anger, that silly bit about Steny Hoyer being hazed at a talk was nothing compared to the roughhousing that occurred over across the state in St. Louis, when six people wound up being arrested after a fight broke out at a town hall meeting.

The anger is real. The majority of folks out there protesting are good men and women who are angered and saddened by what is happening to their country. It is the "astroturf" part of this grass-roots rising that worries me. How it all ends up is anybody's guess. I'd love to know who is funding all the various sides.

If Prechter is correct (from the August Theorist) in stating that the odds are in favor of a resumption of the stock market decline soon (as a marker for mass mood), then in addition to reading up on the French Revolution, as we've advised many times here, it might behoove you to go out and do a brief study of Weimar Germany and how the running street battles helped define the era. This is especially true if economic circumstances force the federales to repatriate large numbers of soldiers with urban combat experience, right into the teeth of a raging Depression.

Happy Monday.

Thursday, August 6, 2009

More Rage

Liar? Fact-challenged? Or is Steny maybe playing fast and loose with the "facts?"

Just askin'.

h/t Zero Hedge


In Playing with the End we looked at fun little tool that collected over 100 ways "the world" might "end." Ignoring the null semantics of that concept (the World will still be here, our little piece may change radically, but that is the nature of history) I do want to again point out that when a system breaks down, how that breakdown is interpreted plays a big role in What Comes Next.

This is important. It is at these phase changes or inflection points or tipping points or whatever you want to call them that the new stories of the future get outlined. The future gets hijacked (dare I say, FutureJacked?) by the memes that are swirling in our mental ecosystems and these memes duke it out for supremacy.

One of the memes that will inform the Collapse and the response to said Collapse in the United States is becoming fairly obvious at this point. The meme can be summed up as "depressed, angry man who thinks he has no options left runs amok and kills many people." Sort of a modern day "Sampson pulls Temple down on self, killing many Philistines along with him" way to express the rage that has been building up over the end of the Cycle Wave 5 and this corrective move since the market top (in real dollars) in 2000.

According to how Frost and Prechter put it (Elliott Wave Principle, Key to Market Behavior, page 76), wave 5's are "...always less dynamic than third waves in terms of breadth." Yawn. So what? What does technical analysis have to do with killing sprees and a buildup of anger among a swath of the social body?

I think it is key. When a bull market wave 5 is running, fewer and fewer folks reap the benefits and the foundation of the "prosperity" generated is weak. However, the information that is used to educate and build the worldview of the members of this culture are all the same - big, easy money is your birthright and will make you happy - no money, you suck. Now that we are moving into a bear market and many people have a lot less money, this default mechanism that has been coded into their mental software kicks in, telling them they suck.

Yes, there are many enlightened souls out there that reject crass materialism. Sheer numbers, though, are on the side of the angry and the money-hungry.

The big percentage of folks whose mental software has been programmed from birth with commands to consume, work office job, breed, drink, party, consume are experiencing some severe cognitive dissonance right now. They are part of the mass herd that is sliding more quickly every day into negativity and anger. They sense something is amiss, that they've been lied to, that the U.S. is more akin to a Latin American kleptocracy than the noble Republic they learned about in civics. They know that they've lived through a big-ass Wave 5 upswing into a mass prosperity that will never be seen again by those living today. They may not acknowledge that they know it, but it is there, subconsciously gnawing at them like a rat on dead flesh. They dull it with anti-depressants. They dull it with drinking. They dull it with willful ignorance (thank you, CNBC).

But the time is coming - and soon, I fear - when these people will embrace this rage, not ignore it. I think that time will come when we freefall into Primary Wave 3 in the coming weeks or at most a few months.

What Can We Expect?

Knowing I am painting with a broad brush and at the risk of wading into the swamp of Class Warfare-speak let's look at one way to view the current situation as we teeter on the edge of the abyss of intense negative social mood:

  • Income disparity is at a major high in the country. By itself, perhaps not a key driver, but the economic "deal" struck as we "deregulated" over the 1970s and 1980s was that the better use of the capital would return benefits to everyone. With the recent bout of corporate welfare under TARP and from the Fed, one might argue that this "deal" is dead, but no one knows what will replace it.

  • The materialist culture sold to the American People for the last 80 years or so has found itself bankrupt - both fiscally and philosophically. People who have lived their entire lives believing that a better deodorant and a shirt from the right store will make them happy are now being told that money isn't everything by the same media outlets that pimped out materialism for the last several decades.

  • Male culture in the U.S. is a tattered, shredded, pitiful thing and we have two generations of males with nothing left but rage as they live in a culture that at best does not give them a framework for mature growth and at worst actively mocks them for the crime of simply being male. This is a worry because the vast majority of those running amok are males and among that male population white males have been making the headlines with recent spree killings.

  • Jobs are disappearing. "Good" jobs will be hard to find in the future. Folks will adjust, but it will be hard on them.

  • No one knows how the mass consumption of mood-altering drugs like anti-depressants will affect mass behavior. We have at least 10% of the population medicated and have the first generation that was mass-drugged coming to maturity. What happens if economic conditions cut off their drug supply abruptly?

This rage meme will be dressed up in more "acceptable" forms at first. Remember, how we hang "tags" on events driven by mass mood is, in my opinion, fed from a stock of memes that have crept into our skulls. Initially it will be things like "oh, he was just a racist" or "oh, he was just a nerd who hated women" or "oh, he was just depressed because he lost his job."

But as more and more of these spree killings erupt, I believe they will feed on themselves and I even think you'll see some sort of network of ideas, justification and even glorification of the "going out guns blazing" spree killing meme.

Gonna be a rough bunch of years folks. Be wary in crowds. Know where the exits are every time you enter a room. Enjoy the moment when you can - we are soon to enter the heart of the abyss.

Wednesday, August 5, 2009

Playing with the End

While we wait for social mood to roll over into the coming Wave 3 collapse you can play around with other end-of-the-world scenarios over at Slate.

How Is America Going To End?
Slate's "Choose Your Own Apocalypse" lets you map out the death of the United States.
By Josh Levin
If and when America expires, we probably won't agree on the cause of death. For proof that autopsies of empires are inconclusive, consider the case of Alexander Demandt, the German historian who set out in the 1980s to collect every theory ever given for why Rome fell. The final tally: 210, including attacks by nomads on horseback, blood poisoning, decline of Nordic character, homosexuality, outflow of gold, and vaingloriousness...

Interesting to see what channels are available for the coming tsunami of negative mood to pour down.

Monday, August 3, 2009

The Pressure Continues to Build

The disruptions mentioned in the article are happening during a period of (relatively) positive social mood as people release the tension that built up from the ugly declines last year. That said, most folks out there know, deep down, that it is all coming apart at the seams:

Town Halls Gone Wild
Alex Isenstadt, POLITICO on Yahoo!
Screaming constituents, protesters dragged out by the cops, congressmen fearful for their safety — welcome to the new town-hall-style meeting, the once-staid forum that is rapidly turning into a house of horrors for members of Congress.

On the eve of the August recess, members are reporting meetings that have gone terribly awry, marked by angry, sign-carrying mobs and disruptive behavior. In at least one case, a congressman has stopped holding town hall events because the situation has spiraled so far out of control...

The language used here is fascinating:

  • Screaming constituents
  • Cops dragging out people
  • Fearful Congressmen (after the way they've "led" the country over the last 20 years, it took them long enough)
  • The "situation has spiraled so far out of control" for the would-be Powers That Be.

You think you are vast and powerful while riding the Tiger when said Tiger is headed in the direction you think he ought.

When the Tiger of social mood makes it known that he is the one who decides on the direction, the former Masters of the Universe find out that if they fight it, they'll wind up on the ground and this Tiger is hungry for blood. Good luck with that.

Expect more of this. Expect Congressfolk to wall themselves off totally from the unsanitized public. Expect laws that forbid criticism of government decisions and expect the political edifice constructed during the past few hundred years to be shaken to the foundation stones.