Monday, April 22, 2013

Predictions Are For Fools

Some would say that blogs like this one that try to predict the future are merely parlour games for fools. Generally speaking, I don't attempt to predict the future. At most, I attempt a guess at what policies will come into being on the other side of the economic "reset". The rest of what I do here does not involve prediction of what will happen, it's merely a description of what already has happened. The real fools of this age are those who believe that the status quo is the least bit sustainable. Because to believe in the status quo requires the prediction that a set of events will occur that have never before occurred in human history:

> There has never been a country in the history of mankind that borrowed its way to prosperity. The U.S. debt was $1 trillion in 1980 and is $16 trillion today - a 9% growth rate.

> There's never been a country that borrowed 142% of its national defense budget on a continuing basis (aka. "the deficit")

> There's never been a country that successfully relied upon borrowed money from foreign nations that do not share its world view and are ideologically opposed to it (aka. China)

> No country handed its industrial manufacturing sector to foreign nations without enduring a massive decline in its standard of living. Services do not have the same level of productivity as manufacturing and therefore can't support the same wage base - (Reference "Beggar Thy Neighbour Policy" in the history section)

> No country massively increased its money supply to purchase risk assets while the solvency of those assets eroded continuously. Actually, Japan being the one potential exception which now has debt to GDP of over 200%, a stock market less than half of what it was in 1990 and a 25 year ongoing economic depression. The combined monetizations of today are orders of magnitude greater than what Japan alone attempted in the past, so the jury will deliver its verdict on this "strategy", in due time.

> No country successfully used Food Stamps to indefinitely forestall unrest, when there were a million homeless children v.s. a 10 fold rise in billionaires in 25 years. (See "Revolution", again in History section").

I am not predicting that all of this will go wrong, I am saying it already has gone wrong. Most people on this planet at this moment know that the globalized economy is a disaster. The only people who haven't figured it out are the handful of elitist blowhards at the top who think their academic theories can defy reality indefinitely. Their alchemy and thought dealership got us into this fiasco and it won't get us out. They will be the last to know and the most surprised when all of this comes crashing down out of "nowhere".

Predicting that all of this will magically end well, when it's already going sideways to down, is a game for mentally impaired fools who can no longer face reality.