When Water Goes, Life Changes

To the World of 2024,

 
It is my hope and prayer that if you are reading my thoughts from April 2015 in 2024, that another crisis in my country and world today will have been resolved. This problem has been building over years, but in the last few has grown to one of the worst crisis of our day.

The crisis; the global supply of fresh water is in decline. This is not impacting merely third world nations, but my country, the United States.

California, THE most populous states in the US, has just issued its first executive order on mandatory water restrictions across the state due to one of the worst droughts on record.

California orders first-ever mandatory water reductions, USA Today, April 1, 2015

California Gov. Jerry Brown announced a sweeping executive order Wednesday that imposes mandatory water restrictions across the state as California copes with a historic drought and water shortage…He stood in a brown patch of Sierra Nevada that should be buried in snow to announce a broad-based initiative to reduce water use by 25%, or 1.5 million acre-feet, over the next nine months. ‘It’s a different world,’ Brown said. ‘We have to act differently.’

20150307_snow_0

This is not a problem, that like the stock market, can be manipulated away temporarily with the assistance of high-speed computer algorithms trading S&P futures by central bankers in order to maintain the image of “invincibility”. This problem has been building for years, and must be addressed now because of a REAL shrinkage of water across California. In fact, the United States Drought Monitor makes it clear that while California is at the epicenter of this problem, there are several others states in the US that have large areas experiencing extreme drought conditions as well.

April8_USDroughtMonitor

California-National-Drought-Monitor

While individuals living in the U.S. outside of California may be tempted to think that this enormous problem will not touch their own lives, the following stats make it clear that California’s drought has far reaching implications for the U.S. food supply.

California Is Turning Back Into A Desert And There Are No Contingency Plans, The Economic Collapse, March 15, 2015

The truth is that this is a crisis for all of us, because an enormous amount of our fresh produce is grown in the state.

As I discussed in a previous article, the rest of the nation is very heavily dependent on the fruits and vegetables grown in California. The following numbers represent California’s contribution to our overall production:

99 percent of the artichokes, 44 percent of asparagus, two-thirds of carrots, half of bell peppers, 89 percent of cauliflower, 94 percent of broccoli, 95 percent of celery, 90 percent of the leaf lettuce, 83 percent of fresh spinach, a third of the fresh tomatoes, 86 percent of lemons, 90 percent of avocados, 84 percent of peaches, 88 percent of fresh strawberries, 97 percent of fresh plums.

Without the agricultural production of the state of California, we are in a massive amount of trouble.

This article from The New Yorker titled, California: Paradise Burning, was released last September. The pictures are extremely poignant, reminiscent of the 1930s.

Since 2012, California has been suffering through a historically severe drought. For the farmers of the Central Valley, which is, as Dana Goodyear writes in this week’s issue, “the country’s fruit basket, salad bowl, and dairy case,” the future seems especially bleak. Wells have gone dry, orchards have been left to perish, and those who came to California to work the fields stand idle.

This is expected to be California’s hottest year on record. Towns in the north are running out of water; the south has been asked to conserve. In the Central Valley, farmwork has dried up with the water supply.

NewYorker.SheepHerder

NewYorker.2.2losse.Thousands.OutWork

[Source – The Dry Land, The New Yorker]

In the spring of 2010, I wrote an article tracing the history of our growing national debt. The article was titled, A Simple But Painful Lesson. While I was working on the article, a friend of mine who grew up during the Dust Bowl of the 1930s, gave me the book, The Worst Hard Time: The Untold Story of Those Who Survived The Great American Dust Bowl.

As we live out our busy lives with little thought of system wide problems, taking for granted that everything from our financial assets to our gas, food, and water will always be there on time when we need it, it certainly seems like this quote attributed to Mark Twain from the 19th century is extremely pertinent to us in 2015: “History doesn’t repeat itself, but it does rhyme.”

TheWorstHardTime.1930The stock market crashed on October 29, 1929, a Tuesday, the most disastrous session on Wall Street to date in a month of turmoil. Investors were relieved at the end of the trading day. ‘RALLY AT CLOSE CHEERS BROKERS; BANKERS OPTIMISTIC’ was part of the three-stack headline in the next day’s New York Times….On the High Plains, the Wall Street gyrations were a distant noise. The crash hurt rich people, city slickers, all those swells and dandies. It could not reach the last frontier of American farming …The newspaper in Boise City boasted that the ripple of the crash never touched the Panhandle in 1929. Instead, with record harvest, a new railroad, and even dreams of a skyscraper in town, the paper said, ‘Our ship is coming in.’

While prairie families may not have owned stock, they did own wheat, and it was starting to follow the course of the equities market. On Wall Street, people put 10 percent down to borrow against the future growth of a stock; in Kansas a dryland wheat farmer did the same thing – gambling on grain. The 1928 crop had come in okay, the price holding at $1 a bushel at the end of the year. Most people had anticipated $1.50 wheat; some even talked of the $2 yield they had been getting at the start of the decade. There was a drought elsewhere, covering Maryland and the Carolinas all the way to Arkansas, that should have pushed up prices. [pgs 73 and 74]

Frankly, to write about the serious nature of the water shortage in California and other parts of the nation right now, or how this will alter the nations food supply, it is as hard for me to fathom as the lives of those who lived through the Dust Bowl of the 1930s. I am still isolated from these issues today, as my daily life allows me to find food at numerous grocers, and water is in abundant supply here in North Texas.

Yet whether farmers in 1929 or recent years, these realities are very real and personal.

From reading and writing so much history over the last decade, I am very aware that I would be extremely foolish if I thought that the world around me was not going to change, and change drastically.

On the other side of the world, water has continued to become an extremely critical and shrinking resource for both the Jews and Arabs in the Middle East. Whether Syria, Jordon, and Israel depending on the limited resources from the Jordan River, or Turkey, Syria, and Iraq depending on the limited resources of the Tigris and Euphrates, the life giving force of water continues to shrink in quantity, placing entire populations under extreme pressure.

I wonder as I look at the world as it exist today, about a world in the future where water is far more abundant.

“And it shall to pass in that day, that living waters shall go out from Jerusalem: half of them toward the eastern sea, and half of them toward the western sea; in summer and winter it shall be.” [Zechariah 14:8, A Hebrew English Bible according to the Masoretic Text]

“He [GOD] will wipe every tear from their eyes. There will be no more death or mourning or crying or pain, for the old order of things has passed away.” [Revelations 21:4, New International Version of the Bible]

A Curious Mind

A Centrally Planned Sex and Financial Life

To the World of 2024,

Today, March 18, 2015, the Federal Reserve is making another announcement. Everywhere in the financial world the debate is between whether interest rates will be raised or stay the same. I believe by 2024 this will seem ridiculous. To think that one organization carried so much power over the financial well being of so many lives. However, today is has been accepted as financially “normal” by the majority.

Today it would seem that societies around the world have embraced this idea, that centrally planning everything from our money to our sex lives has become the standard.

You may think I jest, but read on.

Recently, I came across the following headline from Bloomberg:

The Japanese Government Is Trying To Figure Out How To Get Its People To Have More Sex, Bloomberg, Jan 25 ‘15

Now I ask you, have the political leaders of Japan gone mad? How far will the role of government reach in Japan? Since they have been hyper printing their currency, the yen, over the last three years, shouldn’t politicians be more concerned about the Bank of Japan wrecking their own economy than sending out surveys or doing interviews with groups to make sure their citizens are having enough sex?

Of course, the real concern of the government is the birthrate, which is falling fast:

“The birthrate is falling fast. By 2060, the population is expected to go down by a third, and, by 2100, if trends continue, by 61 percent. In 2011, sales of adult diapers in Japan exceeded those of baby diapers. It’s an urgent national problem: there isn’t enough procreation.”

So is it any wonder that one of the solutions for this is a tax. Yes, a tax.

“Morinaga Takuro, an economic analyst and TV personality, believes this has something to do with attractiveness. He has suggested a ‘handsome tax’: ‘If we impose a handsome tax on men who look good to correct the injustice only slightly, then it will become easier for ugly men to find love, and the number of people getting married will increase.’”

Fortunately, I am not an ugly man, or at least my wife doesn’t think so. But neither am I handsome enough to fall into the “handsome tax” group.

Like the US, Europe, or other nations following the “centrally planned life” model, the Japanese government wants their citizens to know, that money will be spent to find a solution, as though spending money by a government always leads to a solution.

“Whatever the case, it’s an urgent government concern. In 2014, aware of the dangers of becoming a nation of old folks, Prime Minister Shinzo Abe set aside a 3 billion yen ($30 million) for programs aimed at boosting the birthrate, including matchmaking programs.”

Could these studies and programs be taking attention away from the fact that the government has become the “buyer of last resort” for its own stock market – a symbol of “economic growth and opportunity” – literally by printing up trillions in yen solely for the purpose of buying their own government bonds and stock funds?

World’s heaviest burden: Japan’s Debt Tops 1 Quadrillion Yen,
RT, Aug 9 ‘13

jpy-10000-japanese-yens-2

Plunge Protection Team Exposed: Bank of Japan Stepped In a Stunning 143 Times to Buy Stocks, Prevent Drops, Zero Hedge, March 11 ’15

“Since (Bank of Japan) Gov. Haruhiko Kuroda took office in March 2013 and introduced monetary easing of what he called a “different dimension,” the central bank has sharply increased its buying of baskets of stocks known as exchange-traded funds. By directly underpinning the market, officials have tried to encourage private investors to follow suit and put more money in stocks in the hope of stimulating the economy and increasing inflation.

HelpingHandDuring the past two years, the central bank entered the stock market roughly once every three days, picking up a total of ¥2.8 trillion ($23 billion) of ETFs that track Japan’s major stock indexes, according to Bank of Japan records. That distinguishes it from the U.S. Federal Reserve and European Central Bank, both of which have bought bonds to pump up the economy but haven’t directly bought stocks.”[Original source was from the article, BOJ Helps Tokyo Stocks To Soar: Some Within Bank Worry Over Growing Role in Market, WSJ, March 11, 2015]

The speed of change in the world around us today should be alarming. Yet it would appear that since 2008, whether in Japan, or my country, America, that as long as one’s life is moving along a somewhat predictable path, that the massive increase and intervention by the state (central bankers) in financial markets, or “unlimited” ways to spend money fixing society (politicians), is merely accepted as normal, or at least not with any severe backlash.

Yes it has been this way for years and years, but the speed of change that has taken place since 2008, and especially since 2013, makes it clear that these patterns in markets and society are like the declining birthrate in Japan, totally unsustainable.

The comments in William Pesek’s recent book,Japanization.WilliamPesek Japanization: What the World Can Learn from Japan’s Lost Decades (2014), make it clear that epoch changes are coming much faster, larger, and sooner, than the policies implemented to date by central bankers and national politicians to “fix the problem”:

“Only 1.2 million Japanese turned 20 (in 2012), half as many as in 1970 – a reminder that the population is shrinking as the national debt surges…

 

Takeshi Fujimaki, a former adviser to billionaire George Soros, is bracing for a fiscal crisis sometime before the Tokyo Olympics. That risk drove him to recently run for an upper house of parliament seat, which he won. ‘I decided to become a politician because I think a financial crisis will come sooner or later,’ Fujimaki said. ‘This total debt will continue to increase. I don’t think Japan can survive until 2020.’

 

Japan’s debt is approaching 250 percent of GDP. The nation will spend 22.2 trillion yen servicing its debt in the fiscal year begun in April 2013, accounting for more than half of total tax revenue and occupying about 24 percent of the government’s budget.”

Today, it seems that the number one value in society is optimism. I consider myself an optimistic person. But I also believe that when we are facing such incredibly serious social issues like the ones taking place in the world around us, that we must start talking among each other about these serious issues, and seeking answers at the family and local community level, rather than abdicating our sex life and financial futures to the policies being created at the national and international level. Yes these central planners can tap into this “unlimited source of ‘free money'”, but when seen through lessons already written from the story of “unlimited debt to fund unlimited spending by the state” , we know that it has always proven to be an unsustainable path.

It is now March 2015, and the drug of “all time highs” in global wealth indicators seems to have pushed posts like this one to the backburner. But I have also observed a growing crowd that is very concerned about where this is leading all of us, to me, a positive step in the right direction.

We will see where this story in history takes us, as we continue to watch.

A Curious Mind

  • You are encouraged to read my recent public article, Free Money; What Could Go Wrong? It provides financial charts of the Japanese Nikkei, the longest DEFLATING stock market pattern in modern history (its all time high taking place on January 3, 1990), and the explosion of assets on the Bank of Japan’s balance sheet since 2012, caused by their current attempts to literally buy up their sovereign bonds and their stock market. Just google the title to find it on the web.

Seeking Answers; Seeking Rest

To the World of 2024,
2015 is the 150th anniversary of the end of the Civil War. Several years ago, my wife and I watched a 9-part documentary by Ken Burns on this painful period in American history. One thing that made the soldiers and their families come alive for me, were the many letters that had survived from that period to our own.

CivilWar.Letter

The letters between the battlefront and the home described a life very different from my own. The seriousness of life was not how I grew up in a middle class American family. Yet the personal letters made it clear that families and soldiers knew how fragile life was during those years in America.

At the end of 2014, a friend of mine sent me a copy of a prayer he had written. While it may sound out of place for my America at the close of 2014 with the Dow breaking 18,000 for the first time ever and so much emphasis on our comforts today, his prayer touched my own heart as I pondered headlines that continue pouring in week after week, pointing to a time where deeper thoughts across my nation and world of a more serious nature could become more common.

O Lord My God, Answer Me

Lord I cry out to You. Hear me O Lord, Unto You O Lord I call. O Lord hear my prayer, receive my voice with mercy. When I call upon You O Lord, Hear me.

Let my prayer arise, as incense in Your sight. Let the lifting of my hands be like an evening sacrifice. O hear me, Lord, hear me O my Lord.

Dark, dismal thoughts fill my days, and confounding fears dwell deep within my troubled heart.

Answer me, O LORD, answer me, give heed to the voice of my supplications!

My soul is like withering grass, in misery,my minutes pass, my days are consumed like smoke.

Answer me, O LORD, hast Thou not built a throne of grace to hear when sinners cry?

Sharp reproaches wound my ears, and refuse to give my spirit rest.

Answer me, For You are patient, generous in mercy, rich in compassion, loving and just.

praying-hands-old-cropped

My cup is bitter and full of tears, my daily bread unpleasant to my taste.

Answer me, I know You won’t delay the appointed hour of your mercy and grace.

Incline Your ear, O Lord, and answer me; For I am afflicted and needy.

Answer me when I call. You have relieved me in my distress; Be gracious to me once more and hear my prayer.

In the day of my trouble I shall call upon You alone, For only You will hear me.

Answer me when I call, save your servant who trusts only in you.

Preserve me, save me, Be gracious to me, O Lord,

Answer me, Be abundant in loving kindness when l call upon You.

manprayingYou, Lord, are good, and ready to forgive, I lift up my soul.

Answer me, And I will glorify Your name forever.

You alone O Lord, have helped me and comforted me.

Answer me, For You are patient, generous in mercy, rich in compassion, loving and just.

Consider and answer me, O LORD my God. Answer me quickly, LORD; my spirit fails. Do not hide your face from me. I wait and hope only in You, O Lord; You will answer, O Lord my God. God knows his own and hears their cry and fills their tongues with praise. Holy, Mighty, Immortal God have mercy on me.

Glory to the Father and the Son and the Holy Spirit. Now and forever.
Amen

 

A Mind with Much to Ponder

 

Oil Drops: Cheap Gas for U.S. Consumers; Rising Prices for Russians

Gas.Below2As an American, it has been nice to go the pump and find gas under $2.00 a gallon. In fact, the last time we saw prices at these levels was in the fall of 2008.

Yet what has been saving me money has been a major factor in the slowdown in the Russian economy, and the decline in the value of their currency, the ruble. This in turn has been hurting my friend Vasily. When reading economic data and statistics, it is easy to dismiss others pain by following an “out of sight, out of mind” way of thinking. However, if we both, whether American or Russian, seek to follow the teachings of Christ, then we should want to understand if our neighbor is hurting from something that is benefiting me.

“Teacher, which is the greatest commandment in the Law?”
Jesus replied: “‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.” – Matthew 22:36 –40 [NIV]

I contacted Vasily right before the New Year and asked him to give me some details about how the sharp drop in the ruble had impacted their daily lives. As you can see, the changes have been substantial recently.

“For many people in Russia, life for recent weeks has been filled with fears and concerns about their future. The ruble plunged, losing about 72% of its value to the US dollar since the beginning of the year [2014]. In the beginning of the year it was 35 R/$, currently it is about 60 R/$, but in the middle of December it fell down to 85 R/$.”

If you are not familiar with currency conversations, consider what Vasily is saying. As the Moscow.Russiaruble devalued, anyone exchanging dollars for rubles had to come up with more and more rubles to exchange for 1 US dollar. The impact has been dramatic on the people in Russia.

“No wonder people rushed to the stores to buy various things from smart phones and flat-screen TVs to furniture and cars. People tried to use the fact that the prices in the stores stayed the same during those days, and buying could protect their money from fast devaluation. Stores, however, caught up within a week or two, and now many prices reflect the devaluated ruble. Milk went from 32 rubles per liter to 53 rubles per liter; meat from 240 rubles per kilogram to 480 rubles per kilogram; bananas from 35 R/kg to 65 R/kg: apples from 35 R/kg to 80 R/kg. Not as many people bought new furniture, TV, or a new car, but all people buy milk, meat or fruit on a weekly/daily basis. Many retail prices even though not directly connected with a dollar, began to reflect the increased dollar rate. So people now have to either spend more rubles if they can afford it, or buy less. People’s salaries stayed the same so far, although the government promised to increase pensions on 7-10% in 2015. It is clear that this crisis has cut in half the standard of living that people had become accustomed to over the last 5 years. The Russian government, the Central Bank, and the President work hard now to stabilize the situation on the financial and stock markets, but so far the prognosis people hear is not too positive, at least for 2015.”

His story could be seen by anyone keeping up with current events too.

Russians flock to stores as ruble remains volatile, Fox News, Dec 17 ‘14

“The Russian government looked at ways of easing the selling pressure on the ruble Wednesday amid fears the country may face a full-blown bank run and as consumers look to buy big-ticket items before prices rise.
Deputy Finance Minister Alexei Moiseyev was quoted by the Interfax news agency as saying that the government is going to sell foreign currency “as much as necessary and as long as necessary.” That, the hope is, would relieve the pressure on the ruble, particularly against the dollar.
The ruble has lost more than 50 percent of its value this year.”

Vasily also shared with me some illustrations, that make it clear that his work with other Russians doing missions work inside and outside the country has been greatly impacted by rising prices.

“Our short term mission trips to Israel became more expensive. For a group we took to serve in Israel for 10 days in November 2014, people paid 28,000 rubles. As the year progressed, a March 2015 trip was going to be more like 45,000 rubles. Some people decided not to go because the cost became prohibitive for them especially with the increased cost of their daily lives. So it is harder now to mobilize Russian believers for foreign missions with a weaker ruble.

Historically we have seen that such crises would lead to a cheaper ruble at first, but in 1-2 years the ruble would catch up and inflate prices in dollars too. That can be seen historically in the cost of e3 trips; for instance, it was $1,100 in 1992, then $1,800 in 1998, then $2,800 in 2004, then $3,800 in 2012.

Currently we are sadly observing panic in the financial markets because of the fall of the ruble, plunge in oil prices, sanctions, and speculative currency trading. We trust the Lord will help us through all this now and in the future.”

RubleFalls.WithOil.VOA

As nations the world over are impacted by a slowing global economy, struggling under increasing trillions in additional debt, most of which has gone toward unsustainable behavior in global markets, may we all remember our neighbors, not only next door, but especially those struggling under conditions far worse than our own in other nations.

May the people of Macedonia under the Roman Empire during the 1st century AD inspire us today. I hope the world of 2024 will read this, and immediately think of examples of this type of behavior by those who claimed to be followers of Christ.

“Now, brethren, we wish to make known to you the grace of God which has been given in the churches of Macedonia, that in a great ordeal of affliction their abundance of joy and their deep poverty overflowed in the wealth of their liberality. For I testify that according to their ability, and beyond their ability, they gave of their own accord, begging us with much urging for the favor of participation in the support of the saints…” II Corinthians 8:1-4

On a cold day in January,

A Curious Mind

PS – If you would like to make a financial impact on the lives of people in Russia, I encourage you to check out Vasily’s web page. I continue to believe that an investment in the lives of people is more rewarding that an investment in financial markets.

Starting at the End of the Story

Shackleton's Ship in 1914Several years ago, I was told about a book called Endurance: Shackleton’s Incredible Voyage. The book is about Sir Ernest Shackleton’s epic adventure in August 1914 to  Antarctica. As you read these opening words, consider whether you think things are going to go well for these men. Remember, this is the world of 1914, not 2014.

“The order to abandon ship was given at 5 P.M. For most of the men however, no order was needed because by then everybody knew that the ship was done and that it was time to give up trying to save her. There was no show of fear or even apprehension. They had fought unceasingly for three days, and they had lost….

She (the ship) was being crushed. Not all at once, but slowly, a little at a time. The pressure of 10 million tons of ice was driving in against her sides.

Frank Wild, the second in-command, put his head inside the crew’s quarters. ‘She’s going boys,’ he said quietly. ‘I think it’s time to get off’.”

When I had read the first chapter I was ready to stop. Here was a crew of men, who in 1914, found their wooden hulled protection from the brutal outside world being crushed. The ship that brought them to Antarctica would not be taking them home.

Why read the rest of this story? How could anything good come out of this beginning?

Still, the title intrigued me. I quickly went to the final pages of the book and read the ending. Yes, victory!

Now I knew I could go back and read the rest of what today is one of the greatest stories of determination, faith, and courage against all odds to survive.

What Gets Inflated, Can Get Deflated: Remember 2008?

It is also a story, that most of us, including myself, can not relate to at all. We have so many safety nets around us; so many things we depend on every day as though its continuation were as certain as the air we breathe. Yet, if we see any article or news report that scares us, we merely “close the book”, and ignore a larger developing story.

The story coming is the next massive deflationary period of money and financial resources, due to trillions in debt at virtually zero interest, most likely followed by a shift away from the dollar in the global system. The international currency unit, the Special Drawing Rights issued by the International Monetary Fund has had many white papers written about it as a replacement on the global level for the US dollar.

Since the 2008 financial crisis, world central bankers have told us that with trillions upon trillions to “temporarily” assist global markets, things would return to “normal”. As we close out 2014, with history once again breaking many records in extreme behavior and a string of “all time highs” over the last 2 years, deflating financial assets is not the majority view.

Yet powerful forces have been underway during the 4th quarter, producing hundreds of billions in losses already. Let me illustrate my point with two examples. This should be a harbinger to everyone worldwide, that once the largest financial bubble is over, the largest financial bust must commence.

Oil and Argentina

Oil was $94 a barrel at the end of September, and now 11 weeks later, it is in the $50s. This is a massive loss of revenue for major nations around the world, and one of the largest industries in my nation, the United States.

Economic War Goes Mainstream – Oil’s Price Drop is Seen as Proof, Global Economic Warfare,      Dec 7 ‘14

Oil.Dec12.2014

Argentina has seen its stock market plunge 34% since the fourth quarter started.
How quickly the headlines changed from September to October.

Sizzling: Argentina’s stock market is up 100%, CNBC, Sept 10 ’14

Argentine Stocks Plunge As Oversight Tightens on Parallel Market, Bloomberg, Oct 9 ’14

Merv.Argentina

These developments impact so many lives, so many nations. For millions this brings cheaper gas, or is taking place in a country that we think has nothing to do with our own daily life. However, for millions this means a lost of revenue for an entire nation or industry that threatens their own day-to-day lives. These events are also large enough in and of themselves, that they have already started impacted other parts of the global economy and markets.

Where’s The Encouraging Ending?

So let’s jump ahead in this story. Let’s look past elaborate computer models, reams of statistics, and thousands of experts. Let’s look past a debt based currency system that connects us to events across the world, and is necessary for our daily survival.

Is there any story from the ancient world for today’s complex world, that points to a time where headlines and book titles could be 180 degrees opposite of what we are seeing today?

They will hammer their swords into plowshares
And their spears into pruning hooks;
Nation will not lift up sword against nation,
And never again will they train for war – Micah 4:3

 

Thus says the LORD of hosts, ‘Old men and old women will again sit in the streets of Jerusalem, each man with his own staff in his hand because of his age. And the streets of the city will be filled with boys and girls playing. – Zechariah 8:4

I know, I know, none of us alive today have seen a time when the world has been at peace, and certainly not the most controversial religious city in the world, Jerusalem. I know that this is taking the discussion far away from a world the “money makes the world go round” dominant theme of today.

But remember, in 1914, influenza was life threatening, while most strands today are treated like a short term cold. In 1914, Shackleton’s men were closed from the outside world. Today, they would use satellite communications to send out a May Day signal.

So as frightening headlines keep increasing, telling everyone that man has not been able to create a nirvana world free from pain, is it not possible that the historical writings of several Jewish writers could provide hope of a time when the entire world finds what we really ultimately want, peace on earth and true unity between men?

For a child will be born to us, a son will be given to us;
And the government will rest on His shoulders;
And His name will be called Wonderful Counselor, Mighty God,
Eternal Father, Prince of Peace.
There will be no end to the increase of His government or of peace –  Isaiah 9:6-7

The writings of these Jewish men, translated into more languages of the world than any other writings, have been ones I have read repeatedly over the last ten years of my own life, as I have written about the many “first in history” events. They continue to give me peace, even when the world around me is not.

A path to a time of incredible world peace like no one has ever seen, is fraught with many painful scenarios none of us even wants to consider.  Yet without an ending that is more  triumphant than the frightening trends facing us all today, it is easier to close the book, and live in a world of illusion until the sound of breaking timbers forces us out on the ice.

Deep things to think about in a world that has taught us that the experts, thinkers, and planners will make sure our world doesn’t shake our own personal plans. But what if trillions more in debt, and legions of people to centrally plan life for the rest of us started breaking apart again? I know, this time it will be different.
A Curious Mind

December 15 2014

Why The Dam Can Not Break

To the world of 2024,

Today I am writing you as the year 2014 is coming to an end. I have been writing my thoughts publicly and privately for the past decade. It has been incredible to have had discussions with people around the world, brought together by a public writing. I have looked at the world through the lens of history, science, and crowd and individual behavior in regards to money and financial markets.

When the world of 2024 reads these comments, I believe we will ask the simple question, “How had entire societies come to the conclusion that doing things totally opposite at the system level than espoused at the individual level, would continue to lead to more ‘prosperity’, or at least return things to ‘normal'”?

Mises_CA_PrintingMoney Let me give you an idea that today is almost taboo and not open to public discussion in the world of money. If I were to tell you to pay down your debts, start living within your means, and saving for the future, this idea would be accepted across cultures around the world. Yet, as the greatest explosion of debt in human history has occurred in the last 6 years, we seem unwilling to consider how this could possibly have a massively negative impact on ALL of our lives in the future.

Debts Exceed $100 Trillion As Governments Binge

As individuals, we espouse one set of ideas regarding debt; as societies, we accept a totally opposite set of ideas. On the individual level, we have experienced limits to debt. On a societal level, for the last few decades the idea of “unlimited debt” has been commonly accepted as the means to correct the latest financial or economic crisis.

Bush Signs $700 Billion Financial Bailout Bill

Bank of Japan Unleashes World’s Biggest Burst of Stimulus in $1.4 Trillion Shock Therapy

I am certain by 2024 this will seem very odd. In fact, it will seem complete madness that entire societies could have accepted the idea of “unlimited debt” as the solution to bringing about “stability” and this being the main idea presented as necessary in order to return our lives to “normal”.  However, you must remember that this idea has been the most widely taught idea in economics and finance, embraced by political leaders, and experienced by the public since 1971. Many people know that in 1971, the United States removed it currency, the US dollar, from being backed by gold. Said another way, we were no longer willing to exchange our paper dollars for the gold we held at the national level if another country grew fearful of our spending and debt levels and wanted gold which can not change, versus the promise to pay with even more debt backed paper (now electronic) dollars. This event opened a period in history that no one had ever seen before, and the concept of “unlimited debt”.

Consider these comments from August 15, 1971: A Date Which Has Lived In Infamy in Forbes on  August 14, 2011:

In their impossibly good book Money, Markets, and Sovereignty (2009), Benn Steil and Manuel Hinds make the point that over the last four thousand years, the only period in which humanity has not consistently based its currency in metal, specifically gold, is the last forty.

More on this in the future. For now we return to perception, which is more powerful than reality.

In 2006, I read Dr. Jared Diamond’s book, Collapse: How Societies Choose to Fail or Succeed. Ten years earlier, I would have never read such a book. The stereotype of “that’s just doom and gloom stuff ” would have stopped me. Yet, between 2000 and 2002, my personal and professional life saw enough pain from the collapse of trillions in wealth, that it lead me to seek answers from many sources, whether economic theories or studies on human behavior in crowds. Studying history was always the common theme of these discussions, as it still is today.

Consider this idea from Diamond’s book, which focuses on the environment, not finance. I believe it will help the world of 2024 to better understand the world of 2014.

The final speculative reason that I shall mention for irrational failure to try to solve a perceived problem is psychological denial. …If something that you perceive arouses in you a painful emotion, you may subconsciously suppress or deny your perception in order to avoid the unbearable pain, even though the practical results of ignoring your perception may prove ultimately disastrous.

Then Diamond uses an illustration I have used many times in the last 8 years.

Consider a narrow river valley below a high dam, such that if the dam burst, the resulting flood of water would drown people for a considerably distance downstream. When attitute pollsters ask people downstream of the dam how concerned they are about the dam’s bursting, it’s not surprising that fear of a dam burst is lowest far downstream, and increases among residents increasingly close to the dam. Surprisingly, though, after you get to just a few miles below the dam, where fear of the dam’s breaking is found to be highest, the concern then falls off to zero as you approach the dam. That is, the people living immediately under the dam, the ones most certain to be drowned in a dam burst, profess unconcern. That’s because of psychological denial: the only way of preserving one’s sanity while looking up every day at the dam is to deny the possibility that it could burst.

This seems to be the easiest way, to understand why we have one view of debt for our personal lives, and yet a totally opposing view at the societal and system level.

We have experienced two financial “dam breaks” since the year 2000 in world markets. It has impacted hundreds of millions of lives around the world. Yet, after both breaks, the consensus belief continues even today that, “unlimited debt will bring things back to normal”.

As I write more, I will share with you why I grow more confident that the world of 2024 will be much brighter and different from the world of 2014. I am not merely thinking solely about money, but about our way of life across the globe.

I know, after this post, this may sound like a person in denial. However, after reading so many stories about the pain that has come to people all over the world since the idea of “unlimited debt” began in the 1970s, I have found incredible hope in the writings the Jewish race in ancient history left our modern world today.

Sincerely,

A Curious Mind