Monday, October 24, 2011

Free is Good

I'm a bit behind here, but wanted to make sure you have noticed that EWI is hosting a "Free Week" for their Commodities offerings.  This is a great chance to check out one of their products that has had a long and accurate track record.

This is good through noon Thursday, October 27 (Eastern time), you'll get complete access to all of EWI's most-promising daily, weekly and monthly opportunities in the world's leading commodities, plus all the charts, world-class analysis, video forecasts along with a treasure chest of trading lessons and more! (Subscribers normally pay $49/month for these services.)

Learn more and get instant access to EWI's FreeWeek of commodity forecasts and trading education now -- before the opportunity ends for good.

The usual notice on this - I am an EWI affiliate.  If you use the link above to go to Free Week and sign up for a free account with them, I get a small credit.  If this makes you uncomfortable, please access Elliott Wave International via a web browser or by directly typing in the address.  Don't ignore this fantastic opportunity.

Plus, the October Socionomist is out and the hot-button issue of "Democracy Under Attack" is the lead article.  If we have the wave counts right and we are headed towards an era of deep negative mood, know this topic will be the source of a lot of conflict.

Friday, October 14, 2011

Occupy This

Color me conflicted on the Occupy Wall Street movement/effort/open source protest.  Having gotten myself worked up about the banksters and the Congress they bought fair and square, I can relate to the emotion behind it.  They seem a bit amorphous to actually accomplish much in the way of changing bank, corporation or government behavior.  From the outside, it looks like a bunch of people standing around, saying they are angry at the system and want to engage in "resistance" to that system.

While I am skeptical of the ability of #ows to accomplish much in the way of reform, the more I consider it, perhaps that is not the function of this group/movement.  Perhaps, whether by plan or by the herding instinct that is the root of socionomics, #ows is one (of many) matches that may light a bonfire that could burn down 200 years worth of the development of the Central Bank/Nation-State/Corporate/Nanny-State model for governing societies and shaping world politics.

Aside from the Monty Python flashbacks I have when seeing some of the more fringe elements of this fringe movement, there is some real anger, real purpose and real grievances behind this - just as there was (and might still be in places) when the Tea Party movement sprang up.

Maybe #ows and, to a lesser extent now that it has been mostly co-opted, the Tea Party, are the early groups that will incite/act as an excuse for the entrenched elites to resort to force.  Resorting to force will only amplify the anger and, assuming our read on social mood is correct, that anger will spread deep and wide.  #ows and the Tea Party both showed the power of small groups to leverage modern technology to organize and spread a message.  John Robb has chronicled the rise of what he calls the Open Source Insurgency and has even codified the parameters that Open Source Insurgencies should follow if they want to succeed.  These groups have shown amazing abilities to thrive during the peaceful demonstration phase.  If the guns comes out and the tear gas flies, we will see how they adapt to the next phase.

Keep an eye on this effort and try to use news outlets not related to standard corporate media.  Their story on this is easy - whiny unemployed people who should get a job.  The reality is far more nuanced.  I personally suggest the following:

You are seeing the development of tactics that could very well prevail across the globe in the years to come as anger builds and needs an outlet.  Here's hoping it all stays peaceful.

Friday, October 7, 2011

Brave New Subdivision

It may take a few years, but as fear and anger build, more and more walls will go up and local groups will begin to take matters of security and basic services back into their own hands as the bureaucracy fails. This development in Pakistan, a country well down the path of failure, is on the leading edge of where housing developments will go in a world of violence, collapsed municipal finances and general uncertainty:

Pakistan gated community sparks controversy
By Mark Magnier, Los Angeles Times
The houses and manicured lawns slope up the artificial hill edged by unbroken sidewalks and white picket fences, as children play and residents exchange pleasantries.

This sprawling subdivision called Bahria Town — "Come home to exclusivity," it boasts — operates its own garbage trucks, schools, firehouse, mosques, water supply and rapid-response force — a kind of functioning state within a nonfunctioning one. And all supplied without the bribes you'd pay on the outside, residents say.

"I like living here," said Abdul Rashid, a sixtysomething retired government worker. "It's like you're in a little protected country — tidy, utilities work, the family can relax. If there's any problem, you just ring up security..."

The article discusses the standard rich vs. poor argument against this kind of development, which is not without merit, but that misses the broader point - the combination of a turn in mood centuries in the making, paired with technologies that allow for small groups to wield immense violence is going to drive people towards an almost medieval view of living arrangements.

This is just the first glimmer of what is to come.  And these kinds of fortified towns don't have to be playgrounds for the rich.  The ones that will probably prove most durable will be those grown organically, by groups of people without tremendous resources looking to secure what they have and build a better future for their kids.  The walls that may go up could be enormous hedges around neighborhoods, or security systems based on cheap webcams, local wi-fi and volunteers who know how to use a shotgun.  Those in the building industry will change with the attitudes of their consumers.  This trend could get legs and fast in the U.S. if things continue to deteriorate in finance, politics and society.

Tuesday, October 4, 2011

Greasing the Skids of the Breakdown

I've been dwelling on socionomics for quite some time now.  We are trying to use that model to get a feel for what we'll face as over two centuries of optimism and progress get unwound over the next generation or so. There are other tools in my toolkit that I have neglected to discuss in quite some time. With the markets unraveling before our eyes, it is time to revisit another model that you should familiarize yourself with: megapolitics.

Megapolitics is a phrase revived by James Dale Davidson and William Rees-Mogg in their books Blood in the Streets, The Great Reckoning and The Sovereign Individual.  Of the three, The Sovereign Individual is most relevant to our current needs and well worth adding it to your bookshelf.

The very short version of the basic thesis of megapolitics is that technology, especially the technology of violence, drives how large states can grow, how much input citizens have in those governing structures and what changes to expect when technology shifts the balance between offense and defense.

The same technologies that allowed the West to colonize Africa and sweep opponents from the field in battlegrounds across the world would lead to the breakdown of those empires as the technologies spread.  A machine gun can wreak havoc on tribal opponents armed with spears or flintlocks, allowing for the conquest of tribes and empires that had lasted for millenia.  Those same machine guns (and radios, and later social media connections), in the hands of "rebels" all of a sudden made empire an expensive proposition.  Increase the ability for small groups to mount an effective offense (adding guidance systems to missiles, roadside bombs, the "flattening" of the globe and the enabling of small groups to finance their activities via gray or black markets, etc.), add in the "mental software" of open source insurgency theory and you have a recipe for the collapse of large state structures, or at the very least the "hollowing out" of countries as well as the means to mount effective armed resistance to "invaders" of various stripes.

In an era of positive mood bias, the dark extremes of this technology are generally ignored or glossed over.  As we move into an era of anger and violence, the logic of the microchip - whether in a computer or smartphone that allows some individuals to be productive any place on the globe or whether mated to an explosive in the form of guided missile or controlled bomb - we could quickly see the "Kosovo-isation" of many parts of the globe, where grievances long-supressed get worked out in low-intensity wars that could go on for years.  Mix this with the "need" for governments to raise revenues in an age of austerity and you can see where this could go.

I suggest you trek over to the library and check out a copy of The Sovereign Individual or purchase a copy at your bookseller of choice.  We will be covering topics such as the one below more and more as we watch the old system disintegrate around us and the language that Davidson and Rees-Mogg have used to describe their thesis will come in handy:

Iraq Militants Brag: We’ve Got Robotic Weapons, Too
By Noah Shachtman, Wired Danger Room
U.S. forces used a combination of spy drones and bomb-handling robots to help beat back Iraq’s insurgents. Now, those militants have a warning for those American troops still remaining in Iraq: We’ve got robots, too.

In a slick new online video just released by the Ansar al-Islam extremist group, kafiya-clad engineers brag about their skill and designing and making weapons of their own. They show off homemade silencers, fire custom-built rockets, and solder their own circuit boards.

But the climax to the nearly four-minute clip comes when the camera focuses on a car driving in the desert; there’s no one inside the vehicle. Then a tripod-mounted machine gun fires off a few rounds; there are no fingers on the trigger. The car and the gun are remotely-operated — crudely robotic...

We've been living this technological revolution for many decades.  Time to pay the piper.  While we will focus on the breakdown aspects in the coming years, my read of this trend is actually quite optimistic.  We just have to survive the transition crisis...