Tuesday, January 24, 2012


The last post was a wee bit disjointed.  I am having some troubles coalescing my thoughts.

Here is where I am stuck - I continue to use the socionomic model as my guide to the general lay of the land, so to speak.  Having been witness, as you all have, to the tech bubble and the housing bubble, and living in the waning days of the Big Government Bubble, the idea that mass herding effects drive events is not hard to accept.

Where I am stumbling is really what to say about, and how to prepare for, events in the early days of a steep and quick downturn in mood, when we are swept up in the vast river of mood and have to grab at a branch floating by just to stay afloat.  I still agree with a variety of analysts out there that financial markets and the world system in general is quite vulnerable to a significant dislocation.  Our systems are brittle and a mass stampede away from "risk" and away from trust, good will, harmony, a generally honest government, and all the other emotions that were considered as "givens" as our current way of life established itself, could result in some big failures, big dislocations, big headaches and, sadly, big violence.

I am also fairly comfortable with where this tide will carry us - a lot of violence, possibly insurrections, a severe degradation in trust between unlike groups, the degradation of civil structures, the rise of organized private violence in areas, mass poverty as the enormous debts run up during the last few decades comes unwound, the rise of angry religious cults, and in general, an ugly 14th Century feel to a lot of things.

I am not comfortable with is this ongoing rally period in the sense that I am not good at gauging how to take advantage of it via the markets or via positioning myself in a social or even geographic sense.  Frankly, back when I was actively trading, I sucked at these types of markets.  Now, not being in the market at the moment allows me to ponder what to do should we get this dislocation to the downside I expect.

Why worry about it, you ask?  Well, the thing is, many of the choices and decisions that get made in a time of crisis or as a "temporary" fix, have a bad habit of sticking around and becoming the new structures we build our stories and societies around when we pass through the tear-down phase of the bear mentality and get back into a building-up, bullish mentality as a society.  And frankly, I expect the tear-down to be significant when Primary Wave 3 engages to the downside.

When I recommend being a bridge-builder and active member in your local area, I am thinking in terms of you being like a seed that sprouts after a fire devastates a forest.  Lot's of other competing organisms are out there.  Much of the population seems to long for a final authoritarian clamp-down in this country.  As a beliver in the Republic and as a believer in the Bill of Rights and Constitution, I continue to be sickened as policy after policy comes out of D.C., and frankly, out of political capitals around the world, that leverage technologies to spy on, harass, and crush those opposed to whatever public/private looting regime is in place at the time (Jon Corzine, et al).

Being a strong citizen, being someone who helps out others, who shows that free individuals can move mountains when they work well together, who values liberty - that is something that I hope can help offset this coming black tide.  No guarantees, of course, but your decisions and actions in the coming Crisis will matter, it will help shape the mold into which our melted society will be recast in the years to come, a society that will then have to face Supercycle Wave C, but that is a tale for a different day...


David said...

In my humble opinion:
1. You have to live in the world as it is, and not over-concentrate on the post-inflection "thought experiment" you may have conjured. This is the hard lesson of preparing for P3 since...1995's publication of At The Crest.
2. All "preps" have to pass muster as insurance. They can't subsume all your time, effort, or wealth, only a fraction thereof. Everything that you do now to thrive in the "post" world has a burn rate in the Status Quo world.
3. Plan A must be to continue living in the current paradigm. It can outlast your expectations by a mile.
4. Have a Plan B, a C...all the way to Z. I tell my young adult sons that Plan Z is move back in with Mom & Dad. The point is that at no juncture should they ever be HOPELESS. Becoming dispirited is the poison most to be avoided, down that path is suicide.

Re: Preps. Over-reliance on the 3 G's (guns, gold, and God) is dangerous; if Clowns-in-Authority really want to disarm & rob people, all they have to do is create a reason to displace them and then, at roadside checkpoints under the muzzles of mini-guns, search for weapons (and steal whatever else seems nice, like gold coins, bars...).

The USA is particularly well-suited to dictatorship. People are predisposed to obedience via the founding myths of the country. The trick as always is to know when it's time to go on a LONG vacation, and to know from where to watch the fireworks.

David said...

By the way, I'll disagree with your comment about "a generally honest government."

All of US society is riven with pervasive dishonesty. The political system is a swamp of corruption; where the 3rd world is characterized by small bribes to cops and bureaucrats, the US system literally RUNS on huge bribes right out in the open where Big Businessmen BUY (indulgences) legislation via campaign donations. Corporations are pits of dishonesty where everyone in the hierarchy lies up and demands lies down in order for everyone to maintain their jobs in the seating chart.

It is in the sea of dishonesty in which we swim where resides the true brittleness of our society. Truth is the glue of society, and lies create a building with no rivets or mortar holding things together.

Flagg707 said...

@David, I can't really disagree with your last comment on corruption in government. Maybe I am still heavily influenced by my raising - I truly bought in, at a young age, to the ideal of public service, that the policeman is always your friend, that at the end of the day, "truth will out."

It is hard to shake that early programming. The Boy Scout in me always wants to believe that government in general is honest. Maybe at better way of phrasing it would have been the perception of government as honest was deeply rooted throughout the bull market era.

David said...


You've highlighted why I fear the USA is unusually vulnerable to a complete capitulation to the Dark Side (i.e. the full Orwellian panoply of Totalitarianism).

Humans are most unprotected against events, etc., they feel are near impossible. Americans largely believe the USA is the freest country, is capitalist, enjoys the rule of law, and all sorts of other myths that separate ours from other nation-states.

This makes Americans peculiarly blind to complete inversions of the nation's myths. Freest? With more people in prison, as a percentage, than any country but N. Korea? Capitalist? With the military industrial complex and bank bailouts combining to make discretionary spending look like penny candy?

The President unilaterally orders the execution of citizens (and their CHILDREN!!) and no one so much as BLINKS!

The USA is already far, far down the rabbit hole toward truly Nazi-level control, yet people sing "And I'm proud to be an American, 'cause at least I know I'm free..."

Germans thought they were free, too, under Adolph H. The scary part is, it's already THIS BAD and the Dow is pushing 13,000. What might we expect six months after the Dow has dropped 70%?

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