Thursday, July 31, 2014

Lies Lies Lies

“Cyril Figgis: ‘How do you keep track of all these lies?’
Sterling Archer: ‘Practice Cyril. Lying is like 95% of what I do.’
Cyril Figgis: (awkward pause) ‘... In your job.’
Sterling Archer: ‘Sure.’”

- Archer

My earlier feeling that we might be getting sold a load of BS from the US government regarding Ukraine and Russia is getting stronger by the day. Here's a few good links that cover the dubiousness of some of the ‘evidence’ far better than I can (especially the first link, which I can't recommend highly enough):

The West's Reckless Rush Towards War with Russia

US Releases Satellite Images Allegedly Proving Russian Shelling Of East Ukraine

Reuters Debunked: Khodakovsky Denies Interview Aspects

Until I see some actual good evidence to the contrary, I’m now acting on the assumption that the US government’s case is severely jumping the gun at best (less likely), and at worst is deceptive propaganda designed to serve an agenda (more likely). I say the latter is more likely because of the speed of the accusations and the timing of the new sanctions and the quickly assembled smear campaign.... it reeks of a prepared response. More specifically, it points to a US (and possibly European) agenda that needed a reason to be brought into play. Instead of solid evidence, we’re given questionable evidence from social media, Ukraine’s own security service (who's the furthest thing from an impartial observer), and old satellite imagery from private companies but not any from our own spy satellites at the actual time of the incident. And any time our government comes out of the gate this certain and this vocal so early in the game before all (or even some) of the facts can be determined says to me that they’re trying to quickly create an emotional response and belief in people, in the hope of blinding most to any contrary evidence that may come later. It's human nature that more often than not people tend to rely more on systems of belief rather than logic or evidence.

So what the hell is the agenda or real reason behind the beating of the war drums? I’m thinking there are at least four major factors at work:

1) The first is that US and Europe want Russia, and especially its regional dominance in the supply of energy, contained and diminished. Not just with Ukraine but also other eastern European and central Asian nations that have energy resources or are ideal routes for oil or gas pipelines. As I mentioned a couple posts ago, the leadership of most nations are at least becoming aware there’s not going to be enough resources to fill the expected future needs for all nations, so many are trying to make arrangements to ensure their own needs are met first before the others. China is probably the most forward-thinking and fast-acting in this respect, focusing on making deals and partnerships in various African nations that have substantial energy and mineral reserves or quality farmland. The US government, however, seems to think that the only tool needed is a precision-guided high explosive hammer, and that every problem is a freedom-hating nail.

2) The second is that the US wants to nip in the bud the recent trend of some nations (Russia being among the most vocal of them) moving away from the use of the dollar in international trade. While this non-dollar international trade is still a pretty small amount overall, there is potential for it to snowball over the next decade to deal a serious blow to the US dollar’s premier status as a global reserve currency. Also playing a part is the BRICS announcement of their own global bank alternative to the IMF (the very IMF in which the US and Europe conveniently have a dominant influence). A huge amount of US power and leverage and ability to borrow comes from it possessing the world’s reserve currency. So perhaps they feel it’s best to act now rather than sit back and wait for a legitimate justification to come along.

3) The third is the current administration’s desire for payback for recent embarrassments, namely Putin’s clever handling of the US case against Syria last year, Russia’s swift and near bloodless seizure of Crimea, and the granting of asylum to American whistleblower Edward Snowden.

4) The fourth is the desire to establish a scapegoat; a common enemy that can keep the nation’s populace united and supporting the leadership in the face of unpopular policies and a disastrous economy in the near future. It is a time-proven method of mass manipulation that has often had fair chances of success. Please know that I do not condone this, I’m simply acknowledging its usual effectiveness. My hunch up until several months ago was that China would eventually be the one to get this honor, but I guess it was decided Russia was the better target considering its leverage and influence as a major oil supplier, its smaller economy, its previous history as our adversary, and because it has fewer avenues for non-military retaliation against the US than China does. And as a bonus, this media blitz also serves to distract the public from other world events (like ISIS in Iraq… funny how that seems to be barely a blip on the news cycle despite the fact that ISIS is as much a threat to Iraq as ever). Quite understandable from the government’s point of view, since many such events are at least partly the result of disastrous US foreign & military policy and are signaling (to anyone paying attention) the waning of US influence and power, .

I can't help but wonder if those who make the decisions in the halls of power are also feeling the same sense of foreboding and pivotal change that some of us do, and in a perhaps rare act of foresight they're planning to situate themselves as best as possible while putting other competing powers at a disadvantage before things get really messy. Unfortunately, if this is the case, they also appear to be arrogant and egotistical enough to think they can do it so solely by threats and use of force. So maybe what we have here all boils down to forward planning combined with a power-hungry and tragically overconfident mindset.

So if the US and most of Europe is dead set on creating Cold War 2.0 with Russia, is there anything we can do to change this? Well unfortunately, probably not a whole lot. We can refuse to take at face value anything coming from government (whether US or European or Russian) and mainstream media, and encourage others to do the same. At least then less of us will be unwittingly offering support for some half-assed, careless geopolitical maneuvering planned out by people who are not as smart as they think they are. We can also make it clear in any public polling that we don’t support the government’s actions in this regard. Some have proposed that the somewhat negative public opinion polls regarding military intervention in Syria had played a part in the US ultimately backing down from that option… I’m not sure how big a part that ultimately played, but at the very least it can’t hurt anything to blast them in the polls. And lastly, we need to prepare for the potential fallout (hopefully not the literal, nuclear kind) and economic impacts that a new cold war and/or a series of protracted proxy wars may bring. That last I will cover in a later article.

Tuesday, July 29, 2014

Colorado: The Land of Weed and Honey

"They lie about marijuana. Tell you pot-smoking makes you unmotivated. Lie! When you're high, you can do everything you normally do just as well – you just realize that it's not worth the f***ing effort. There is a difference."  - Bill Hicks

Thought it'd be nice to balance things out with a post from the lighter side of things...

So I happen to reside in the Denver area at present, and for those who have been living in a cave, it was a year and a half ago that Colorado, along with Washington state, legalized marijuana for recreational use. Federal law still says it's illegal, but residents and visitors here alike could care less and are hitting the bong with wild abandon. Which is leading to absurd news pieces like this one:

DIA Rental Car Agencies Now Dumping Grounds For Pot

"DENVER (CBS4)- Rental car workers at Denver International Airport say pot tourists are regularly leaving them with marijuana that travelers don’t want to try to carry through DIA.
“It happens quite often,” a rental car employee at a national chain told a CBS4 employee. “Every couple of days. I just throw it in the trash.”
At another major rental car agency on rental car row at the airport, a worker said, “It happens pretty often. More during the weekends. Probably like four times a day. Me, I just throw it away. I don’t know about the others.”

Now I've never smoked pot and have no interest in doing so (among other things, the smell of it always puts me off), but a fair number of my friends, coworkers, and acquaintances have in the past or still do so I'm not clueless on the subject. So when I see a useless, meaningless news story like this, my eyes roll back and I'm reminded again why I watch so little TV news anymore. It's reads like they're trying to make an issue out of nothing, yet they can't even manage to convince themselves that there's any relevance to the story. I could replace this story with one simple headline that distills the truth of that situation: "Pot tourists leaving pot in rental cars; rental car employees respond, 'Dude this job rocks!... there's pizza and a South Park marathon calling my name tonight!'". At least in MY experience, half of the rental car employees who detail, wash, and prep the rental cars are late-teens to twenty-something kids whose primary motivation in working is to have enough money to buy weed and video games. And the "I just throw it away" quote... yeah, right. Possibly true, but not likely. I don't smoke weed and don't necessarily think it's a great idea for others to smoke it (or at least as much as some do), but even I have no reservations about taking it and giving it to a coworker or friend for a few bucks. Anyway, so long as the rental car workers aren't getting baked at work, then exactly where is the problem?

Another article trying to make something out of nothing

"DENVER (AP) — Officials at some Denver homeless shelters say the legalization of marijuana has contributed to an increase in the number of younger people living on the city's streets.
One organization dealing with the increase is Urban Peak, which provides food, shelter and other services to homeless people aged 15 to 24 in Denver and Colorado Springs.
"Of the new kids we're seeing, the majority are saying they're here because of the weed," deputy director Kendall Rames told The Denver Post ( ). "They're traveling through. It is very unfortunate."
The Salvation Army's single men's shelter in Denver has been serving more homeless this summer, and officials have noted an increase in the number of 18- to 25-year-olds there.
The shelter housed an average of 225 each night last summer, but this summer it's averaging 300 people per night. No breakdown was available by age, but an informal survey found that about a quarter of the increase was related to marijuana, including people who moved hoping to find work in the marijuana industry, said Murray Flagg, divisional social services secretary for the Salvation Army's Intermountain Division."

Ok, so that shelter's estimate comes to an increase of 33% from last year, and their informal survey said a quarter of that was marijuana related. Even if we take this at face value, that means there's an 8.33% increase in the homeless population that is motivated in part by legal pot. If we round it up, that comes to 19 more people coming in this year to this particular shelter for marijuana related reasons. From a quick jaunt to this site, they list 35 such shelters in the greater Denver/Boulder area. Even if we were to assume this shelter is representative of all of them (which this being a single men's shelter I figure this is an overestimate), multiplying 19 stoners by 35 shelters brings us to approximately 665 potheads coming to the greater Denver area this year at least in part for the legal weed. Now don't get me wrong, I don't think this is a good thing. But in the grand scheme of things this is a fart in a hurricane. It's a story pretending to be an important issue. And realistically speaking, many of those who decide to stay for the weed will probably have to get work at some point. Even if they go on public assistance, Colorado has already restricted the use of EBT cards at pot dispensaries. Perhaps Avis or Budget or Alamo rental agencies are hiring? ;-)

At the core of this I suspect is a part of society that still can't believe that since marijuana legalization, things haven't totally gone to... well... pot. And really I don't see any difference here in Denver, other than smelling someone smoking reefer a little more often as I go about my day. I admit I do find it to be rather annoying when smelling it as I walk through my apartment building's hallway, but minor irritants are not justifiable cause to step on people's personal liberties. And I think the other part of this is the TV news and mainstream news organizations are fighting to remain relevant, and feel they have to create and exaggerate controversy in order to stay in business. But getting back to the "pot is bad" crowd, I really I don't see how it's so hard for them to grasp the benefits. Let's put aside for a moment the personal liberty aspects of legalization, i.e. no longer putting people in jail for participating in an activity that harms no one else. Just from a purely practical standpoint, not only do we have to incarcerate less people (and thus spend less tax dollars) but the local governments also get some tax revenue from the sale? It's what we call a win-win. Though I suspect the tax revenue is the real thing that allowed it to happen.

As this continues to play out here and in Washington I suspect this will ultimately lead to legalization on the federal level. Not because of the injustice of imprisoning pot smokers or because it's better for personal freedoms.... it's all about the tax money boys and girls. The federal government in particular has demonstrated ZERO scruples when it comes to their self-preservation and maintaining the status quo, and all their so-called "values" they claim to uphold will take an immediate back-seat when the check comes due and they're scrambling for funding. Money talks, and I expect it will be talking rather loudly in the 2016 primaries and election.

Monday, July 28, 2014

100th Anniversary of the Start of World War I

"Jadzia Dax: And as the 34th Rule of Acquisition states 'Peace is good for business.'
Quark: That's the 35th Rule.
Jadzia Dax: Oh, you're right. What's the 34th?
Quark: 'War is good for business.' It's easy to get them confused."

- Star Trek: Deep Space Nine 

It was 100 years ago today of the recognized start of the Great War, after an improbable series of coincidences enabled Gavrilo Princip to assassinate Archduke Ferdinand (it’s really a fun, if bloody, story.... I highly recommend Dan Carlin’s podcast on the subject). And it hasn’t escaped many peoples’ notice that once again the world appears to be approaching a similar crisis point. Unfortunately I think they’re right. I don’t think it’s inevitable yet, but the probability is high and appears to be increasing as the months go by. That’s not to say it would be fought the same way or to the same scale, but I think it will be similar at least in terms of most powerful or industrialized nations being involved in it in some way or another. 

There are definitely similarities between now and then, the most notable being that the leadership of some nations (most notably my own country the USA) seem to be eager for a conflict, as most of the great powers were back then. Back then many of the nations imagined that it would be a “good” war, something for them to demonstrate their nation’s honor and prowess on the battlefield against the other power(s) against whom they’d been developing and refining war plans and strategies for years, if not decades. Fast forwarding to the present, though, one might think nations would think twice given the new risks present today. In fact on the surface it would seem highly illogical to risk a widespread conflict now; the global economy and the individual economies of most developed nations are in an extremely fragile state, and war could easily upset the balance of everything, from international trade and shipping (including oil!) to the unraveling of the delicate financial web of collateralized debt obligations & loan obligations. I suppose it’s always possible that one or more of the more significant players today (US, Russia, or China) see an economic collapse as inevitable and are positioning themselves to have convenient scapegoats available to blame when it does (“the economy was doing fine until Russia started a war in Ukraine!” for example). And while I consider that a possibility, history also seems to point to simple arrogance and hubris among the powerful as being one of the common motivation behind such events (again the similarity to the Great War… most powers involved thought it would be a “good” war and over in a matter of months).

But how would it be different? My educated guess is that it will largely involve proxy wars, with the larger powers acting through the peoples and governments of smaller contested regions. It’s a trend already firmly established, with current examples including the US and Russia in Ukraine, and Saudi Arabia and Iran in Iraq & Syria. And given the nuclear capability of the larger powers, even the supremely arrogant have to acknowledge the risk that direct confrontation would entail. And so they’ll probably settle for confining physical conflict to the third parties that involve their strategic interests. It’s an ideal play for sociopathic leaders; they minimize the risks to themselves while transferring that risk to third parties, all the while getting to sell weapon systems to their proxy groups. War CAN be profitable, at least if you’re the one selling the weapons and supplies.

A second major difference would be the use of asymmetric or unconventional warfare, specifically including such things as economic warfare, cyberwarfare, and sabotage of infrastructure. Economic warfare has recently been demonstrated by none other than the US in its sanctions against Iran (which devastated its economy), and to a lesser extent is occurring in the form of the sanctions the US is placing against Russia. But it could include other measures such as China dumping its US Treasury holdings at a time where confidence in the US economy is suffering for unrelated reasons, thereby creating a financial panic. Cyberwarfare is getting more attention these days and thus probably doesn’t need much explanation from me. Needless to say, in my opinion it is one of the very few things that our government and media uses to scare the populace that actually happens to be a very legitimate threat. And then we get to sabotage of infrastructure, which targets the civilian or military lines of transport, power, or communication to disrupt large swaths of the population. This is not really a new tactic, but what gives it a new and dangerous twist is the extremely interconnected nature of our modern infrastructure as well as its lack of redundancy and resiliency in some areas. This is sometimes related to cyberwarfare depending on how it’s carried out, but it can involve attacks as simple as shooting electrical transformers at power stations. Unlike conventional physical conflicts, these I expect to be used against any and all participants. So if you live in the US or Western Europe you may not need to greatly fear direct physical harm from the war, but all the things you depend on for modern living (electricity, water/sewer, heating/cooling, transportation, communication, financial & banking systems) are fair targets for sabotage. As long as there is the ability to act through intermediaries or proxies to provide some level of deniability, then expect any and all nations to take advantage of these unconventional measures.

The third major difference is that I expect the goals of a modern 'Great War' would be focused intensely on securing resources, particularly oil, gas, freshwater resources, rich farmland, and certain mineral resources. Unlike the early 20th century, we are now starting to run up against hard resource limits to economic growth. And while I don't think most world leaders are fully aware of the severity and scope of the problem (again see Chris Martenson's Crash Course for a full breakdown), all are at least clever enough to know that there isn't going to be enough to fulfill the current wants and needs of all nations. In fact, I believe this potential for resource scarcity is one of the primary trends that is bringing the world closer to war. So that would lead one to presume that the future hot points of this series of global proxy wars will be in resource-rich areas (untapped or less-exploited areas of Africa, Asia, and possibly the Arctic) or geographical choke points for transportation of goods and energy (such as Ukraine or the Strait of Malacca). This new Great War, if it comes about, will be much more about economic survival and less about national honor or regaining historic territorial claims.

As for what alliances and coalitions will exist, who really knows? To be honest, over the past few years I expected Russia to play a more neutral role in what would be a future US-China proxy or cold war (Russia stands aside and builds influence while the other parties exhaust themselves struggling for dominance), but recent events seem to be moving Russia into an active role. The US seems to be committing itself to an aggressive stance with Russia, so perhaps China will be the one to step back and let the US and Russia spend themselves over proxy wars in Europe and the Middle East. But I'll pick up on that in a later post....

Friday, July 25, 2014

What Is It That You Have to Offer?

"When I was 25, all I did was just scream, "Sellout! F***ing sellouts. Corporate sellout. Industry bull***t. Meh-meh-meh." I look back on it and I realized, "oh, I was screaming 'sellout' because nobody wanted to buy what I was selling."  - Patton Oswalt

This rant is in response to the recent trend with fast food workers demanding $15 or so an hour. So I’m sure I’m about to make a lot of enemies today... oh well. And I’m going to start it with my core question to these fast food workers (or any other unskilled worker from another industry that feels the deserve more)…. what is it that YOU have to offer?

In other words, what skills do you bring to the table that’s worth that pay increase? What added value do you bring to your employer in the course of your job? What is that extra something that you do that makes you worth that much?

I’m afraid that for the vast majority of you, the answer is either little or nothing. And this is not a slam on you, but rather it’s a simple acknowledgement that when it comes to the restaurant making money, the difference between having an good fast food employee and a mediocre fast food employee is usually not that great. These jobs are built on the premise that someone with no employer-valued skills will be able to do the job with a very short amount of training. Now there are a rare minority of said workers that are fast and motivated enough to easily do the same amount of work of two mediocre workers, and if I were the employer I'd consider bumping THEM up to $13-15/hour (less employees doing the same work equals less overhead, and I'd pay one person the equivalent of two if they can pull that off). But are all the other coworkers worth that? Hell no! Realistically speaking, I bet managers at some large franchises don't have that kind of leeway to reward their truly exceptional workers. So IF you are truly exceptional in your workplace…. excellent in dealing with customers, getting work done faster than your co-workers, proving you can be trusted to handle some responsibility…. then really you should already be an assistant manager or manager or on the track to being one. Assistant manager may not be rolling in the dough, but it’s far better pay than fry cook or the like and can open a lot of doors to other opportunities inside or outside your company. 

“But there are no opportunities for advancement here!”, or "My boss is a greedy tool who doesn't even give raises to the good employees!"

So then look somewhere else! I've had my share of crap bosses too, and I responded by looking elsewhere. And I also understand sometimes advancement opportunities are limited, especially in this economy. A given restaurant or store only needs so many management & supervisory positions, and sometimes there might be a pay or raise cap for regular shift employees. That just means you need to look a little harder and not just expect the opportunities to fall into your lap. Go find a different job, one that has better opportunities for advancement. I’ve worked a lot of fast food jobs in my teens and early 20’s, and do you know what I did when I felt the pay and opportunities were too low, or at least too low considering the crap I had to put up with? I looked around and went to work somewhere else! In America, fast food jobs for the most part are meant to be stepping stones to something else. They give young adults the chance to break into the working world and develop some minimal work ethic, and being able to demonstrate you’ve survived a fast food job for 6-12 months shows to your next potential employer that you already know how to show up for work on time and perform basic tasks. Barring being a store manager or working in district management, it's not suited to be a career! So stop pretending that it is!

“But the job market where I live totally sucks! There are no other jobs here!”

Then MOVE! If that’s really true, then you need to take initiative and move to someplace where there are better opportunities. People have been relocating themselves for thousands of years for the purpose of finding better opportunities, and most of them had to work harder and sacrifice a lot more more than we do in order to pull it off. Do YOU have to ride in the steerage compartment of a steamship or in a covered wagon for weeks or months to relocate? Hell no! We even have this wonderful service called movers and U-haul that makes it a snap. The point is that change is inevitable, and if you don’t want to be a victim of change you need to find a way to adapt. And sometimes that means changing where you live and work.

“But I can’t move or change jobs because of (insert reason here)!”

Is it “can’t” or “won’t”? For most of these people, if they’re honest with themselves the answer is “won’t”. They just don't want to move. But hey, I do understand some people do have priorities or circumstances that prevent relocating or changing jobs. And in those cases, if you REALLY want a better opportunity then you will probably have to create it yourself. Take inventory of your talents and skills and figure out if there’s a way you can turn those into a side business or a way to work from home. And if you don’t possess any such skills, go out and learn some. Heck, if you’re reading this you probably already have a computer and internet… you have a learning tool of immense usefulness at your disposal. It will require a lot more effort compared to simply changing jobs, but the world is not fair. You have to deal with the world as it is, not as it should be.

“But I work really hard damn it!”

… And to quote Clark's father-in-law in the movie Christmas Vacation, “So do washing machines”. Listen, I understand full well that (most) fast food jobs are hard, unpleasant work. I’ve worked several such jobs myself, so I've run that gauntlet as well. My very first job was cashier/server at Godfather’s Pizza at age 16, and it was not only the lowest paying job I’ve ever had it was also the one where I worked my butt off the hardest. But my work ethic developed fast as did my ability to step up and deal with the stress of too much work spread among too few cashiers/servers. And when I asked for a bigger raise and the manager told me he’d love to but simply could not afford that, I immediately found someplace else to work for higher pay and better work environment (BTW that boss did offer a higher raise when I put in my notice to get me to stay, but I'd already secured a better job for what he offered). Now don't get me wrong, I don't think Godfather's was a bad job and I understand my old manager's position, it's just that sometimes you got to move on. Anyway going back to hard work, it's the plain truth that effort and sweat are NOT the sole measure of your worth to your employer. Now, it is often appreciated (or at least should be if your manager isn't a tool), but the end result of hard work alone doesn't result in the company receiving the extra money required to pay you $15/hour. Hard work is only one part of the equation involved in making a profit, and in many lines of work it is actually a smaller part of it. 

Going back to my first statement, “what is it that you have to offer”, you need to offer more than hard work to your employer (or to your customers if you run a business). You have to offer RESULTS!!! Results are what makes the money for the employer and gives them the ability to give raises. Results are what provides incentives to give promotions. And in some cases, especially these days, results are what allow you to keep your job when others are losing theirs. The latter actually played a part for me just three months ago. Back then the group I worked in was being dissolved since that part of our company's contract was awarded to another company. There were other positions available in another team, but only enough for half the people in our group. I had been there less than a year, and yet I won a spot whereas three people who had been there for multiple years had not. Why? Results. The other three were not bad people or bad workers, but they didn't get the same level of results or step up to the plate as much as I did. To be honest it had as much to do with the fact I didn't screw up as much or make nearly as many errors as they did. Yet that still falls under the category of "results".

I know it's hard out there, especially when you're trying to get started in your late teens and 20's. It's harder now than it was for me when I was at that stage in life, and that wasn't exactly a picnic. But I also know that for every fast food or service worker out there making a good effort, there are usually at least two others that just skate by doing the minimum and rely on the good worker to take up the slack. Of the latter group, they tend to keep their jobs simply because it's slightly more costly or inconvenient to fire them than to keep them around. In their mind they feel that as long as they manage to show up for work most days and don't steal or burn the restaurant down, they're a "good worker". Well doing the minimum may allow you to keep your job but it doesn't make you a good worker, and if you expect to be given big raises and opportunities for promotion working like that then you are delusional or high on something. And if you insist with this $13-15/hour fast food worker minimum wage demand, pretty soon most of you won't even have the job you have now. Those employers who don't close their doors for good will most likely raise their prices and automate more of their processes. And that means they'll have less employees needed for your store. Ask yourself who's more likely to keep their job in this case, the slacker or the employee who busts his/her butt and gets more stuff done? So if you're a bare minimum kind of employee, a $15/hour minimum wage is going to hurt a lot of your coworkers but it will hurt YOU the most. And if you think things are hard now, you are going to be seriously screwed 5-10 years in the future if you're still trying to make a living as a typical fast food worker. Inflation and high prices are going to grind you into the dirt.

The excellent Patton Oswalt quote in the beginning pretty much says it all (I don't have to agree with some of his political views in order to appreciate his nuggets of wisdom or his comedic value).... if you don't get what you want in work or life, it might just be because what you're able to offer doesn't match up to how much you're asking for. Patton apparently realized that and stepped up as a result, and he's achieved a lot of success in his respective fields. So if you want more money or opportunities, you have to improve yourself AND position yourslef so you have more to offer. Just like Patton Oswalt did. 

Be the Patton.

Wednesday, July 23, 2014

Not Getting Distracted By Events and Decisions Outside Your Control

“Government want to tell you things you can't say because they're against the law, or you can't say this because it's against a regulation, or here's something you can't say because it’s a...secret; "You can't tell him that because he's not cleared to know that." Government wants to control information and control language because that's the way you control thought, and basically that's the game they're in."  - George Carlin

I've brought up a lot of sobering or politically charged subjects thus far, and I imagine some are thinking I'm some neurotic, raving mess worrying about all this crap. The truth is I keep my sanity by maintaining a level of emotional distance from subjects I recognize are beyond my ability to do anything about, and focus more on the things I can control in my life.

I think it’s no coincidence that mainstream news and government spend an awful lot of their time talking about subjects that are beyond our ability to control or influence in any meaningful way. And it’s also no coincidence that these same subjects tend to be divisive and quick to bring anger and/or fear to the surface. Politics is the most blatant example of this, but other things like the MH-17 crash fiasco I wrote about yesterday are their bread and butter as well.

The idea is to promote a general feeling of powerlessness in the audience. Once overwhelmed with such messages, the common reaction is one of fear and/or anger which tends to lead one to seek help or protection or answers. And what a coincidence, here’s a government mouthpiece telling you “don’t worry, just give us a chance and we’ll protect you and make it all better”. And hey, here is the nice TV news anchor, saying “yes it’s a crazy world, and that’s why you need to keep watching us so we can tell you everything that threatens you”. The motives behind the approach are obvious; the government tends to be given more influence and power, and the corporate media gets more influence and money. I don’t necessarily attribute evil intentions behind this approach and it doesn’t require any dark conspiracy. There are probably a great number of people in both media and government who honestly think they have a higher goal which justifies the means (seeing themselves as protective parents perhaps). But it still doesn’t change the fact that they do not trust you, the people, to analyze the information and form your own opinions on your own. And to be honest I agree that a great many Americans are terrible at forming their own, reasoned opinions. But is it because the majority in society are just inherently unable to make good decisions and operate independently, or is it because they’ve been conditioned into mental slumber by decades of said “guidance”? Obviously I believe that latter is the case and that we have to cut the cord at some point, no matter how painful the initial learning curve might be.

Some of you might be familiar with the terms Circle of Influence and Circle of Concern (if I’m not mistaken the terms are from Steven Covey’s book). For those who aren’t, the Circle of Concern includes the multitude of subjects and things that we care about, and the Circle of Influence includes the things we actually have some control over. The problem is that our Circle of Concern is usually a much smaller group than our Circle of Control… i.e. the things we care about far outnumber the things we have any influence or control over. And that area of the Circle of Concern that lies outside the boundaries of our Circle of Influence is where many people typically get distracted and expend too much of their energy worrying or arguing about. We argue at length about political decisions we have no real voice in, wars and military campaigns we have no ability to stop or change the outcome, and economic troubles that are beyond the scope of any one person to appreciably change. 

The first step in grabbing back full control of one’s life is to determine what issues are beyond your Circle of Influence and make every effort to not obsess over them. Of course you can, and should, still care about and keep informed on the issues. For example, I care a great deal about the US beating the war drums in its handling of the MH-17 crash, the incredible fragility of the national and global economy, the overwhelming abuses and growth of the surveillance state, and the multitude of other BS that goes on. But it’s all about recognizing when you start getting angry or anxious over it and then taking a step back. Or for that matter, recognizing when someone else is getting upset and disengaging from any discussion or debate before they get lost in their anger or fear. One of the red flags I've learned to recognize is that anyone who watches cable news 3 or more hours in the day (doesn't matter which flavor, Fox or CNN or whatever) is someone who probably flies off the handle with any number of topics.

The second step is finding some reasonable actions one can take to mitigate the impact of some of those things beyond our Circle of Influence, and then move on with life. I may not be able to do jack squat about an economy on the precipice of systemic breakdown, but I can build up a savings to insulate me from job loss and I can plan a path to financial self-sufficiency through starting my own business. I can't do anything about the coming energy and resource shortages the world is starting to face, but I can adapt beforehand to use less energy and gas and find small ways to become a little more resilient (like having a solar panel & battery system or having extra food stored away) in the face of shortages or high prices. Once you reduce your exposure to some of these big things out of your control, the fear and anger tends to abate and is becomes easier to maintain emotional distance.

So spend more time in your Circle of Influence and a lot less time watching the news and listening to your elected douchebags. Or at least if you have to watch them, make a drinking game out of it. Take a drink every time the politician says "the American people", "hard-working taxpayers", or "terrorists"... just make sure you don't have a place you need to be for a while.

Tuesday, July 22, 2014

The MH17 Crash and the US Government Hitting a New Low in Propaganda and Credibility

"Propaganda does not deceive people; it merely helps them to deceive themselves."  - Eric Hoffer

Sometimes I get the impression that those in the higher levels of the US government believe the average American is no smarter than a gerbil. This is one of those times.

The government’s case against Russia and the pro-Russian separatists in Ukraine being directly responsible for the destruction of the airliner is weak and far from conclusive, yet they’re pushing it with a fervor and urgency of disturbing intensity. They’re apparently firm believers in shouting something loudly and often enough so many people will believe them simply out of apathy or exhaustion (sadly, it seems to work some of the time). Anyone who doesn’t at least suspect that there’s dishonesty and an agenda at work behind the accusations is either delusional or not paying attention.

The things in the official story that stand out as suspect to me include:
  • The lack of incentive and motive on the part of pro-Russian separatists or Russia to take down the airliner. The separatists are well aware that by the simple nature of defying their government’s authority they are already too easily associated as being “terrorists” and have a PR disadvantage right from the start. Simply put, they know it is far from their interest to have foreigners, especially civilian foreigners, killed in their area of operations. And when it comes to Russia, I am no fan of the Russian government and I think they’re capable of something like this if they had something serious to gain. But again there appears to be no obvious political or military advantage in doing so (at least when it happens to be in proximity to Russia or the contested region), and Russia also has a vested interest in preserving any international prestige and credibility in the face of the ongoing war of international opinion with the US and Europe.
  • The flight path of MH17 is over the contested area when the airspace was restricted and practically all other commercial air traffic had appropriately detoured around it (Was Flight MH-17 Diverted Over Restricted Airspace?). And Ukraine’s reaction in confiscating traffic control recordings demonstrates that Ukraine is less than forthcoming about the circumstances regarding any traffic control instructions or directions given to the pilot.
  • The US showed practically no hesitation before blaming Russia and pro-Russian separatists for the incident, and ever so conveniently slipped this unrelated story to the press immediately afterward (How Russian Hackers Stole the Nasdaq) as well as quickly applying new sanctions on Russia. This smells of the same kind of pre-arranged propaganda blitz we saw from the US government last year with Syria’s “chemical attacks” which were later found to point more towards elements of the Syrian resistance.
  • The separatists handed over the black boxes to Malaysian representatives in the company of numerous journalists. This doesn’t necessarily prove their innocence on its own, but unless they had methods available to quickly alter or edit the contents (seems unlikely given the very nature of the devices) they’d have little to gain and potentially a lot to lose by turning it over if they were in fact responsible.

So who is responsible? I wouldn’t start pointing fingers at least until the black box data has been analyzed, but I’ll take an guess at assigning probabilities:
  • 75% chance that this was orchestrated by Ukraine or elements within the current regime to portray Russia and the separatists in a bad light, and therefore receive more international support for their side. If this is the case then I suspect the US and some other Western powers are in the know, and since it was a useful propaganda tool they either decided to go and roll with it shortly after it happened or knew something about it beforehand and gave their tacit approval to Ukraine.
  • 10% chance that this was the result of a misidentification or blunder by Ukrainian military. A bit hard to swallow, but it does have precedent. In 2001 the Ukrainian military did shoot down Siberia Airlines Flight 1812 and after repeated denials eventually admitted it was their fault. I don’t see it as terribly likely though, given the shoddy video evidence that Ukraine produced ( and distributed very soon afterward. The video, if in fact is fake, indicates some amount of planning involved and wouldn’t be easy to arrange so quickly after a true “accident”.
  • 10% chance that this was in fact done by the separatists, likely due to mistakenly identifying the aircraft as Ukrainian military, with the direct or indirect material or training assistance from Russia. The one thing the mainstream news probably has at least partly right is that the users would need some substantial training with the missile system (though probably not the months of training some pundits and analysts are telling us), so unless the separatists already happened to have a trained operator in their ranks they would need outside assistance with training.
  • 4% chance it was orchestrated directly by Russian military forces. I only throw this out because the Russians might be playing a deep game with some goals we can’t see yet. In the realm of possibility, sure, but not likely given the information available.
  • 1% chance that this was done by Western special operations teams, again to make the separatists and Russia look bad. I assign a very low probability here simply because I expect they would not have done such a sloppy job in framing the separatists and Russians. I think they would have had the case wrapped up in a neater and more convincing package. This incident makes the staged chemical weapons attacks in Syria look convincing by comparison.

Given the number and scope of the lies the US government has told in my lifetime (and that is just counting the ones I’m aware of), it is a challenge sometimes to not automatically assume the worst of it as a kneejerk response. So I try to force myself to drop that baggage, at least temporarily, when looking at the bigger picture. And when trying to look at this objectively (as much as such a thing is possible for us humans) the motive and the circumstances around the incident do appear to point to Ukraine as being the culprit. And in the larger scheme of things, the US and NATO have gone through a lot of trouble to encircle and ‘contain’ Russia since the Soviet Union fell, and Ukraine remains a key element in that strategy. Furthermore, such propaganda plays well into the recent out-of-proportion US belligerence towards Russia, and the US government has never been picky about facts when it comes to building a case for... well... anything I suppose. Russia’s government is no stranger to untruths and blatant propaganda either, and while I suspect the facts are more on their side here it is only because in this case telling the truth is to their advantage. The news and statements coming from them deserve just as much initial skepticism as the ones coming from the US.

The whole situation is simply a mess, and I don’t think there are any good guys to be found here. In fact I suspect that the closest thing to it are some of the separatist groups, whose primary motivation appear to be self-interest and self-preservation in the face of an increasingly anti-Russian political climate by the current regime in Kiev. What makes this particularly sad is that Ukraine, which had suffered greatly at the hands of the Soviet Union during the Holodomor, appears to be starting down a similar dark path as its former oppressor with its hostility and racism towards ethnic Russian peoples who played no part in those past horrors. And it embarrasses me deeply that my government is actively supporting such a regime. Unfortunately the Ukrainians are just another pawn in the US/NATO and Russian Federation game of realpolitik, and neither side particularly cares about the future of the Ukrainian people. If I had to make a prediction, I’d say Ukraine within 10 years’ time will make places like Libya and Syria seem pleasant by comparison. Anyone living in Ukraine would be well advised to consider a relocation strategy as a contingency plan, at minimum. If it were me I'd be looking to move out by the end of the year, before the economic disruptions and the risk of escalating conflict become more pronounced.

At any rate, just don’t take whatever random mainstream news outlet's or pundit’s or government stooge’s word at face value. They’re not always lying, in fact most of the time there are elements of truth in what they say (they just like to deliberately leave out or distort the context behind the story). But make no mistake, they are in the business of selling you beliefs and ideas and opinions. Give their words and claims the same scrutiny you would when dealing with a car salesman.

Thursday, July 17, 2014

Don’t Go “All In” On Gold

"Buying gold is just buying a put against the idiocy of the political cycle. It's that simple"  - Kyle Bass

Picking up where I left off with the last post, I suggested that one could preserve some of one’s wealth against the EVENTUAL decline in the dollar by putting it into precious metals (or PM’s as they are commonly referred to in the blogosphere). So I figure I should clarify that statement with the following points:

Do NOT throw most or all your money into gold and silver. Like I said in the previous post, I don’t expect the decline of the dollar to happen any day now. Most of the people who are telling people the dollar will crash any day now are trying to sell you something, typically PM’s or survival supplies. Hey, fear sells. But if those fear peddlers really believed it, why on earth would they be accepting US dollars for the things they sell? At any rate, it’s never a good move to put all your eggs in one basket whether PM's or anything else. And since gold and silver prices are notoriously volatile and subject to periods of market manipulation (refer to here and here for examples and background), it’s especially stupid to do so with PM’s. I admit there were times I was very tempted to plow more money into PM's a few years back, but once I met the targets I originally set, I grudgingly refrained from devoting more of our cash into PM's and focused on boosting our cash savings further. And considering the dive gold and silver took the year after I'm damn grateful I did so.

Gold is part of a long term strategy, and silver doubly so. If you have a nice chunk of money that you expect you’ll need to spend in the next year or two, it’s best to not put it into PM’s. The downward slide in gold and especially silver prices in the past couple years should be enough to illustrate that point. Silver I see as a better overall bargain at this time than gold, but only if you’re willing to hold onto that silver for the real long-haul, like possibly a decade or more. While my hunch is that the bottom for gold and silver is either here or very close, who’s to say it won’t take a big damn dip right at the time you need to cash it in for whatever near-term future purchase you had planned?

Gold and silver are more about wealth preservation, not getting rich quick or chasing a quick return. While I think there’s a decent chance that one COULD increase one’s real wealth through holding and then selling gold & silver at the right times, it’s best to think of PM’s as insurance first and a means of wealth appreciation as a distant second. Plan on that little pile of PM's purchasing roughly the same amount of goods & services in the future as it does now, and no more. And if your timing is good and you do happen to make out like a bandit, think of it as a bonus.

Numismatic coins are not worth the extra expense. For those of you who aren’t familiar with the term, numismatic coins are essentially collectibles where part of their worth is due to either their history or rarity. Some less scrupulous businesses try to sell these to consumers, using fear to manipulate people into thinking these coins are a better investment. Their rationale goes something like this… in 1933 when FDR outlawed private ownership of gold bullion, “rare and unusual” collector’s coins were exempt from that edict, so if the government decides to again make gold ownership illegal then your “numismatic” collectible coins should be safe from seizure. One problem with that logic is the US government has little incentive to confiscate gold in that manner, as our dollar is not backed by gold and it’s very much against the government’s selfish interests to re-institute a gold standard again. They’re quite happy with the current system that allows them to deficit spend without any repercussions in the short or medium term. And there’s a lot bigger and juicier targets (such as retirement fund) that are far easier to get their grubby hands on should they really want money. But the biggest flaw I see in that logic is that it assumes that same exemption would exist for any gold confiscation in the future. Nothing is written in stone saying the government would have to do the same thing the next time around, and nothing says that your particular collectible would be in that exempt category even should one exist. Now all this said, I do think there is a possibility of a restriction or criminalization of gold bullion ownership in the US and some other nations. But realistically speaking that would only be worthwhile for the government to consider if some sort of partial gold standard were adopted. And I think most Western economies will do so only after every other option has failed, including the IMF’s “SDR as world reserve currency” option.

Don't buy, or sell, if you're in fear mode. In fact I think this goes for buying or selling ANYTHING, not just PM's. I will admit this is one rule I broke some years back, shortly after taking the "red pill" and seeing the instabilities in the world with fresh eyes. In my case it involved buying more PM's during my first purchase than I originally planned. Fortunately I bought at a good price and I refrained from dipping into our emergency savings, but even though it worked out well I had to admit that I reacted too much to the news at the time and should have remained more disciplined.

Do not bother buying PM’s for yourself if you’re not willing to thumb your nose at government. This slightly inflammatory statement I suppose requires explanation. If and when various governments start seeing gold and silver rise dramatically in relation to their currencies, how many of them do you think will sit back and let you reap all the profits when you sell or exchange your PM’s (even if in reality you're merely breaking even when counting inflation)? Even in better case scenarios where one’s currency devaluation and/or depreciation is not crushing and extreme, the government in question will likely see high prices and increased demand in PM’s as a threat to the status quo, and seek out ways to keep people from "profiting" from gold and silver ownership and sales. The most probable reaction would be levying punitive "wealth" taxes on gold & silver bullion sales, such taxes being convenient and more politically-acceptable than outright criminalization or mandatory exchange or confiscation of PM’s. It's a win-win for government, since it would not only serve to discourage trading in PM’s but also rake in a little more money for the coffers. Now to be effective in this regard the punitive taxation rate would probably be set high enough so as to wipe out any real inflation-adjusted gains on the sale. So if you did the smart thing and held some gold just in case, you have three choices. One, you could play the part of the law-abiding citizen and pay those punitive taxes because it's your duty as a sucker... er... patriotic citizen of your nation. But really that defeats the original purpose in buying the PM’s in the first place. Two, you relocate yourself and your PM’s to a nation that doesn’t impose such penalties. Great if you can swing it, but that won’t help you much if you’re a US citizen… Americans are taxed on their worldwide income no matter where they live or where the income was earned (you too ever have the feeling that the US government sees you as a sheep to be constantly sheared?). Three, you can sell some of your PM’s to private individuals and simply not report and comply with these hypothetical punitive taxes. I know some are (at least publicly) aghast at the notion, but it's going to become the accepted norm if and when governments implement new such rules and laws to fleece their people to the point of near poverty for its own benefit. Go to just about any country where they suffered an economic crisis, especially one followed by heavy-handed government taxation and financial repression, and you'll find a country where the average person doesn't think twice about ignoring repressive laws provided a cop or government official is not around. When laws get in the way of making ends meet, said laws tend to be ignored whenever possible. So decide how important obeying the law is to you and whether you're willing to trade on the black market IF the government becomes exceptionally repressive.

So warnings aside, yes, I'm pretty bullish on PM's. Market manipulation may influence things in the short term but I don't consider it a long-term threat or danger (I actually like taking advantage of it... I figure it's been giving me more opportunities to buy at discounted prices). Volatility isn't a problem as long as you're not thinking too much in the short term and don't put all your eggs in one basket. And we've already addressed how to respond to repressive government policies. So if you're in a position where you've already paid down most or all your debt and built a healthy cash savings (at least enough to cover 3-6 months' expenses), then funneling some money to PM's is probably appropriate. But as I said, don't go nuts with it.... the only people who should even consider committing half their net worth or more in PM's should be the wealthy guys who no longer need to work to pay the bills.

Wednesday, July 16, 2014

Decline of the Dollar; In the Works but Not Coming Quite Yet

"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens."  -John Maynard Keynes

By now most Americans have been exposed to the idea of the “death of the dollar” in the media, whether through tacky “buy gold” commercials, occasional mention in mainstream media (usually in the form of mocking dismissals of the issue), or through alternative media and blogs such as this. Unfortunately such information is often presented as either black or white with little in-between; more often than not it tends to be either “The dollar as the reserve currency will never die… USA! USA!” on one end, and “The dollar will crash any minute! Buy your gold, silver, guns & ammo right now!” on the other end.

Now realistically speaking, the dollar’s days as the reserve currency are truly numbered. It’s not so much due to the money the Federal Reserve has to date “printed” (which is still a pretty insane amount) as much as it is the US government’s future and increasing reliance on printed money and their total inability to cut their budget in any meaningful way. It cannot change on its own, therefore change will at some point be forced upon it in the form of a loss of confidence in the government and the currency. But is this going to happen this year or next? Probably not. Like it or not, the US is still seen as the safe haven (or as I’d put it, the least crappy haven) for large amounts of tertiary or paper wealth. In my mind, we will need to see a collapse in confidence with one or more of the other economic powers first before it reaches America’s shores. My best guess is we will see Japan as the first economic power to suffer this fate. Japan on a percentage basis is printing more than the US, it has a much higher absurdly high debt to GDP ratio at 227% as of 2013, and is much more reliant on imported energy for both transportation and electricity. Once Japan or some other major economic power suffers a currency crisis, THAT will be the time I’ll start worrying about the US dollar. While I do expect some other “advanced” economies will suffer the same crisis before the US, my sense of it is that when Japan falls the spread of this loss in confidence will pick up speed and “go global” rather quickly. I may be wrong on that assumption (and I certainly hope I am), but with how interconnected the financial world is nowadays I think the period of time between a crisis in Japan and a crisis most everywhere else will be pretty short (maybe a year, or maybe just a matter of months).

Now how will "The Powers That Be" respond to said crisis? Well here I’m going to take a page from Jim Rickards (of “Currency Wars” and “The Death of Money” fame) and assign the highest probability outcome to the IMF and the larger economies calling for an "emergency restructuring" of the international monetary system, where they’ll tap the IMF’s SDR’s (special drawing rights) to assume the role as the dominant reserve currency. Though I do think there’s a distinct possibility that we may see other regional reserve currencies pop up alongside the IMF’s SDR, depending primarily on whether China and Russia feel their interests are best served by breaking with the IMF and the West.

Either way, when the dust clears it will mean a different standing for the US dollar and new limitations on the US government's ability to borrow. So THEN will the dollar crash to near worthlessness? Not bloody likely. What I'm expecting is a substantial devaluation in the dollar along with the imposition of capital controls preventing money and wealth from easily fleeing the country. But while the dollar may at that point only buy 50-70% of what it used to mere months before, most Americans will still get paid in dollars and use dollars for everyday transactions. The key change will be in the higher velocity of the currency, which essentially means that people won't hang on to their dollars very long before spending them. The dollar will still be a valid and accepted means of exchange, but it's image as a store of value will be damaged for a generation or more.

So while it will definitely be to one's advantage to diversify out of the dollar before that time, it won't turn America into a nation of absolute paupers overnight. It will be a world of suckage and most of us will be poorer on the other side of it, but we won't turn into Zimbabwe or Weimar Germany overnight. If one wants to avoid the worst of it, one would ideally convert one's financial (i.e. paper) assets into a combination of precious metals, select real estate, and other useful tangible assets. If one has to keep substantial wealth in the financial system, my guess is that the stock market (or at least select stocks) might be the best place. Even the best stocks will probably still lose some value in real terms, just not nearly as much as the other classes of financial assets. Many businesses will find some ways to adjust to the new world. And while they may suffer, as long as they make useful products or provide needed services they will survive and be worth something. My take is the ones that come out on top in the new world will be those who turn their paper wealth towards ownership of or large stakes in essential businesses. In the meantime, I have few reservations about pooling my savings in dollars, at least in the short term.

Tuesday, July 15, 2014

Getting Off the Hamster Wheel

"Advertising has us chasing cars and clothes… working jobs we hate, so we can buy s**t we don’t need." ― Chuck Palahniuk, Fight Club

How many of you don’t get any true satisfaction from your job or work? How many of you feel you’re your job is lacking in job security? And how many of you just simply hate your job?

I feel one of the great deceptions of our time is the promise of the ‘middle class American dream’. You know the drill…. study hard in school, get good grades, go to college, get a good job, work for the next 45+ years, and finally enjoy a comfortable retirement. It’s such a part of the national narrative that most never question it, and if they do it’s usually not until middle age or beyond. 

Now a small part of the lie is the assumption that the life of the employed professional is the very definition of happiness and success. To be fair, many people are genuinely happy with that; they either prefer a higher level of structure and certainty to operate in, or their passions and interests lie outside their work and they couldn’t care less what they do as long as it pays the bills (many of my friends tend to be the latter). But I suspect they are not a large majority. How many of us stick with our current jobs only because of debt obligations, or retirement plans, or fear of losing health benefits, or simply because they feel it's too risky to try something new? So many probably see employment as not their ideal situation but rather the least crappy option available. But the bigger part of the lie is the stability and security that has been traditionally associated with professional employment. As an employed professional you have less of a say in what work you do, how you do it, when you do it, where you do it, and less of a stake in the success of the company. But in return you get the promise of a steady paycheck, reasonable job security (provided you’re somewhat competent), and a path to funding your retirement via pension (less common) or 401k (more common). Plus you don’t have to take on the added responsibilities or extra effort associated with running your own business. Now that’s not necessarily a bad trade, at least if you’re the kind of person that values security and stability above other things. The problem is that steady paycheck, that job security, and in some cases that retirement plan and/or pension are fast disappearing from the employment landscape. Many have had to accept cuts in hours or pay at their jobs, and frequent layoffs and business shutdowns large and small in size continue to plague the US economy. And to make it worse, many companies are imposing arbitrary educational requirements for jobs where additional schooling is pointless, thus requiring many job seekers to go heavily into student loan debt merely for the chance to get professional employment. Considering this all, it seems odd that the current rate of small business ownership among Americans is far less than it was decades ago, when employment was far more stable and came with more benefits.

The purpose of this rant is not to blame businesses and business owners; while some are worthy of contempt with how poorly they treat their employees and/or customers, many if not most others are moving in this direction out of necessity. The business climate is changing due to a sick economy and government mandates & interference, and unlike elected officials, business owners have to deal with reality and adapt to it to stay solvent. The point of this is to get people to examine the changing situation and figure out if remaining someone’s employee is truly in your own best interest. If you like the freedom from responsibility that employment gives despite the growing uncertainties in pay, job security, and retirement funding, well then I say "May the Force Be With You" and recommend you do your absolute best to make yourself as indispensable as possible to your employer. But if the whole concept is starting to sound like a bum deal, then seriously explore the possibility of going into business for yourself. Start looking at your job merely as a temporary thing and a means to an end in gathering the capital and experience to get where you want to go. Find the skills and/or ideas you have that are marketable, and make a plan and save up some money to make it happen. It doesn’t have to happen tomorrow and it doesn’t have to happen all at once (if you’re part of a two-income household, one of you keeping your day job while the business is getting established is an excellent way to mitigate your risks). Heck, my own plans for going into business for myself have been several years in the making and won’t truly kick off until next spring (needless to say the needs and welfare of family required some extra time to carry it out). But just having that goal has made my work and the mind-numbing, bureaucratic environment a little easier to tolerate.
The new world we are likely to see is going to see a lot of people going into business for themselves out of pure necessity as the quality and quantity of jobs steadily shrivel. So if one has some skills, an idea, an inclination towards working for yourself, and feel one’s job and/or career path may be in jeopardy, why not start now when you can carry it out more on your own terms? Making that move sooner than later might just help you beat the rush and get your business established before the crush of new competition and desperate entrepreneurs-of-last-resort comes in full force.

Friday, July 11, 2014

How the Economy, Energy, and the Environment Will Shape the Future

“The world we live in is vastly different from the world we think we live in.” -Nassim Nicholas Taleb

To start this thing off right, I’d like to share what I’ve found to be one of the most valuable sources of information, the Crash Course from Peak Prosperity. While much of it is a compilation of information gathered from various other authors and sources, the elegance of the Crash Course is how its creator, Chris Martenson, assembles the pieces together to paint a picture of a vastly different future we are likely to see in the very near future. And while the information and conclusions it draws are pretty sobering, the refreshing thing about it is that the ultimate message is one of optimism and is not about scaring the crap out of people for profit or personal gain (like most mainstream media, elected officials, and various hucksters do today). Linked below is the short version of the Crash Course, which is condensed from the full 4+ hour Crash Course series of videos (which I encourage you to look into as well when you have the time) and is a little under an hour in length. Go ahead and take a look, I’ll wait...

Ok ok, for those of you who can’t or won’t watch it now I’ll summarize. It’s based around what he calls the three ‘E’s…. the Economy, Energy, and the Environment. 

In the Economy section he focuses on the exponential nature of our monetary system (how it requires total debt and money supply to perpetually grow faster and faster in order to properly function) and the massive global credit bubble that’s due to end in a spectacular fashion. He also covers the 3 layers of wealth; primary wealth (arable land, water, energy sources, ore bodies, animal food sources), secondary wealth (finished products made from primary wealth such as building materials, food products, consumer goods, etc.), and tertiary wealth (paper wealth, including things like cash, stocks, bonds… basically the paper claims on the other two sources of wealth). The Energy section explains how oil is society’s ‘master resource’, and how Peak Cheap Oil and production limitations in other energy sources like coal and uranium are going to put a crimp in the exponential growth that our current economy and monetary system requires. Lastly, the Environment section is similar to Energy in that it highlights how many of the natural resources and wealth our economies rely on, whether it’s sources of ore, fisheries, fresh water, topsoil, etc., are diminishing at a time when the Economy requires more and more to keep expanding.

Anyway, the grand takeaway in the Crash Course is that we are ultimately headed for a world of less…. less growth, less energy, and less ‘stuff’. Basically the opposite of the ‘bigger, better future’ that most of us are assuming as a given. So how does this affect us in real, tangible terms? Well most visibly I expect jobs will be scarcer and a fair number of over-specialized or niche professions will either decline or cease to exist (life coaches, personal stylists, and marketing strategists, beware!). Any large and complex system requires an abundance of energy to maintain, and economies are no different. Without abundant "energy" (in this case, oil and other sources of primary wealth) the economy will contract to a simpler state which will be unable to support as many job specialties or as many workers (at least decently paid full-time workers). That’s a tough pill to swallow, as these days the job market is already unfriendly for many who are close to the breaking point, financially and emotionally. But it is what it is and everyone, employed and unemployed alike, will have to accept it and find a way to adapt. The next big effect will be rising costs and prices in most things, at least as a percentage of income. Expensive energy and diminishing availability of natural resources are enough on their own to accomplish this, but we have the economy angle working its way in too in the form of unprecedented central bank money printing, the effects of which will eventually make its way into the larger economy (instead of just into real estate and stocks and a few other niche areas as we’re currently seeing). The third big thing to look forward to is a re-balancing of the 3 layers of wealth away from the third or tertiary layer (cash and paper assets) to the primary and secondary forms of wealth. At this moment, Western society tends to pay more attention to cash, stocks, bonds, and other financial instruments, and the growth in said classes has far outstripped the growth in primary and secondary forms of wealth. But these are only paper claims to the other forms of wealth, and when certainty and trust in the financial system and central banks drops below a certain threshold you will see big shifts to tangible assets (as well as huge losses in those cases where there are multiple paper claims to a given asset). 

How many individuals and families out there would be devastated by just ONE of these trends, let alone all three? Trying to imagine it in real terms, I figure it would be like one’s family going from a two-income household to a one-income household, seeing regular 10-20% yearly price increases in most goods and services, and having your savings and retirement accounts reduced by half…. all occurring within the same 5-year period. Now as a late Gen-X’er I was too little to remember the part of the 1970’s that I was around for, but from most descriptions I’ve read and heard it sounds like that decade of stagflation is an echo of what we're starting to see and can continue to expect. And to be honest, while I think it will follow a similar theme, I expect the results will be far worse than what was experienced in the 1970’s. Not only are the negative conditions worse, but most of us lack some of the resilience and grit that people had then. And that’s one thing that really makes me nervous…. not the disaster itself, but how the majority will react to that disaster. More often than not, peoples’ reactions and responses to a disaster or extreme set of circumstances plays more of a part in the overall impact of a disaster than the disaster itself. And let’s face it, we are frickin’ SOFT. Myself included. I mean I do work hard to save, plan, learn new skills, and make preparations for rocky times ahead, but being honest with myself I know that I’m still only half as tough as either of my grandfathers who lived through the Great Depression (one of whom served during WW2). And most Americans in turn are even softer than me, which I would find hilarious if the future implications of it weren’t so tragic. So I figure the only path to a future that doesn’t totally suck is to make people aware of these trends, and if they change their mindset and attitude then their actions should follow. If people accept the changes and choose to change their lives accordingly of their own volition, they may find themselves happier than they are now. The difference between changes you make voluntarily and changes forced upon you is immense.

So take some time to view the video, and at some point find a quiet place free of distractions to take even more time to mentally process it and determine for yourself if you agree or disagree with the information and/or conclusions. Even I’m not going to say I’m 100% confident all the conclusions it draws and trends it describes will come to pass (I think in terms of probabilities not certainties), but I do know the information it uses to draw the conclusions is solid, and I find the rationale behind the conclusions compelling enough to take action on. And if you watch it and don’t feel the same… well the worst that happens is that you learn a few things and end up with one less hour in your day to spend watching the drek that usually passes for TV these days.

So what's all this then?

This represents my attempt to grok the complicated, shifting mess that is our world and, whenever possible, influence people to take a much closer look at what’s happening around them. Economics, geopolitics, energy limitations, environment, culture (or lack thereof)…. all these things are converging in a dangerous way, and the herd seems blissfully unaware that they’re running off the proverbial cliff. Frankly, the difference between what the average person thinks is going on and what is actually going on couldn’t be greater, particularly in America. I won’t pretend to have all the answers and I’m sure I’ll make some mistakes in predictions or analyses along the way, but I can guarantee anything I say here will have more substance than what you’ll find in the broadcast or cable news, and most print media too for that matter. And because I am an engineer and a geek at heart, every so often I may dip into tech topics or maybe even throw some science your way.

Why start writing about this now? Well, in part I'm getting increasingly frustrated with how the average person seems to be lapsing back into complacency and old bad habits at the worst possible time in history. Turning to politicians and government for the solution instead of being part of the solution. Going further into debt to buy more crap they don’t really need. Refusing to acknowledge the need to prepare and save for tough times. Allowing crap TV and even crappier schools effectively raise their children, or on the flip side sheltering and coddling their children to an extent that they’re unprepared to function in the real world as adults. The list goes on. But the other reason is the overpowering feeling I have that the world is very close to another major turning point similar to what we experienced in 2008-2009. And whether it affects us positively or negatively will primarily depend on how attached and dependent one is to the status quo. Those that insist that things will remain the same and base their decisions on that assumption WILL be in for a very rough time. So my desire here is that more people will break out of their self-constructed reality bubbles, declare their independence from the herd, and find their own path in the new world that will emerge.