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Economy
In reply to the discussion: Weekend Economists Chart the Bradbury Chronicles, June 8-10,2012 [View all]Demeter
(85,373 posts)4. Fragility and Collapse: Slowly at first, then all at once Josh Keyes YOU MUST READ THIS ALL!
http://cluborlov.blogspot.co.uk/2012/06/fragility-and-collapse-slowly-at-first.html#more
This article is based on the notes from one of the talks I gave at the Age of Limits conference.
I have been predicting collapse for over five years now. My prediction is that the USA will collapse financially, economically and politically within the foreseeable future... and this hasnt happened yet. And so, inevitably, I am asked the same question over and over again: When? And, inevitably, I answer that I dont make predictions as to timing. This leaves my questioners dissatisfied, and so I thought that I should try to explain why it is that I dont make predictions as to timing. I will also try to explain how one might go about creating such predictions, understanding full well that the result is highly subjective.
You see, predicting that something is going to happen is a lot easier than predicting when something will happen. Suppose you have an old bridge: the concrete is cracked, chunks of it are missing with rusty rebar showing through. An inspector declares it structurally deficient. This bridge is definitely going to collapse at some point, but on what date? That is something that nobody can tell you. If you push for an answer, you might hear something like this: If it doesnt collapse within a year, then it might stay up for another two. And if it stays up that long, then it might stay up for another decade. But if it stays up for an entire decade, then it will probably collapse within a year or two of that, because, given its rate of deterioration, at that point it will be entirely unclear what is holding it up...
AS FAITHFUL READERS SUSPECT, THE ONLY THINGS HOLDING THE US UP ARE THE TAX-TRANSFERS FROM THE TAXPAYERS TO THE RECIPIENTS. AND THE CORPORATIONS ARE IN THE RECIPIENT COLUMN, DEPLETING THE WELL FASTER THAN THE POPULATION EVER COULD...
AND THEN THERE'S THE ENDLESS WARS, DOUBLING THAT DEPLETION...
...people assume that they are playing a game of chance, and that its a fair one: something Nassim Nicholas Taleb calls the ludic fallacy. If you drive over a structurally deficient bridge every day, it could be said that you are gambling with your life; but are you gambling, exactly? Gambling normally involves games of chance: roll of the dice, flip of the coin, unless someone is cheating. Fair games form a tiny, insignificant subset of all possible games, and they can only be played in contrived, controlled, simplified circumstances, using a specially designed apparatus that is functioning perfectly. Suppose someone tells you that he just flipped a coin 10 times and all 10 were heads? What is the probability that the next flip will be heads too? If you think 50%, then you are discounting the very high probability that the game is rigged. And this makes you a sucker.
Games played directly against nature are never fair. You could say that nature always cheats: just as you are about to win the jackpot, the casino gets hit by an asteroid. You might think that such unlikely events are not significant, but it turns out that they are: Talebs black swans rule the world. Really, nature doesnt so much cheat as not give a damn about your rules...
WITH ANY LUCK (AND WE NEED LUCK, AT THIS POINT) EUROPE WILL GO FIRST. THEN WE WILL HAVE OUR LAST CHANCE TO PULL OUT OF THE DEATH SPIRAL
...The US Federal government is currently spending about $300 billion per month. To do so, it borrows around $100 billion per month. The word borrows is in quotes, because most of that new debt is created by the Treasury and bought up by the Federal Reserve, so in essence the government just writes itself a check for $100 billion dollars every month. If this continues forever, then the US Dollar will become worthless, so a push is on to get foreign central banks to take on some of this debt as well. They can do that, of course, but, seeing as the US Dollar is on track to become worthless, they have been decreasing their holdings of US Treasuries rather than increasing them. Nobody can tell how long such a scenario can continue to unfold, so what one looks for in a situation like this is signs of desperation...
THIS IS A COLUMN QUITE SUITABLE FOR ASSOCIATION WITH RAY BRADBURY
This article is based on the notes from one of the talks I gave at the Age of Limits conference.
I have been predicting collapse for over five years now. My prediction is that the USA will collapse financially, economically and politically within the foreseeable future... and this hasnt happened yet. And so, inevitably, I am asked the same question over and over again: When? And, inevitably, I answer that I dont make predictions as to timing. This leaves my questioners dissatisfied, and so I thought that I should try to explain why it is that I dont make predictions as to timing. I will also try to explain how one might go about creating such predictions, understanding full well that the result is highly subjective.
You see, predicting that something is going to happen is a lot easier than predicting when something will happen. Suppose you have an old bridge: the concrete is cracked, chunks of it are missing with rusty rebar showing through. An inspector declares it structurally deficient. This bridge is definitely going to collapse at some point, but on what date? That is something that nobody can tell you. If you push for an answer, you might hear something like this: If it doesnt collapse within a year, then it might stay up for another two. And if it stays up that long, then it might stay up for another decade. But if it stays up for an entire decade, then it will probably collapse within a year or two of that, because, given its rate of deterioration, at that point it will be entirely unclear what is holding it up...
AS FAITHFUL READERS SUSPECT, THE ONLY THINGS HOLDING THE US UP ARE THE TAX-TRANSFERS FROM THE TAXPAYERS TO THE RECIPIENTS. AND THE CORPORATIONS ARE IN THE RECIPIENT COLUMN, DEPLETING THE WELL FASTER THAN THE POPULATION EVER COULD...
AND THEN THERE'S THE ENDLESS WARS, DOUBLING THAT DEPLETION...
...people assume that they are playing a game of chance, and that its a fair one: something Nassim Nicholas Taleb calls the ludic fallacy. If you drive over a structurally deficient bridge every day, it could be said that you are gambling with your life; but are you gambling, exactly? Gambling normally involves games of chance: roll of the dice, flip of the coin, unless someone is cheating. Fair games form a tiny, insignificant subset of all possible games, and they can only be played in contrived, controlled, simplified circumstances, using a specially designed apparatus that is functioning perfectly. Suppose someone tells you that he just flipped a coin 10 times and all 10 were heads? What is the probability that the next flip will be heads too? If you think 50%, then you are discounting the very high probability that the game is rigged. And this makes you a sucker.
Games played directly against nature are never fair. You could say that nature always cheats: just as you are about to win the jackpot, the casino gets hit by an asteroid. You might think that such unlikely events are not significant, but it turns out that they are: Talebs black swans rule the world. Really, nature doesnt so much cheat as not give a damn about your rules...
WITH ANY LUCK (AND WE NEED LUCK, AT THIS POINT) EUROPE WILL GO FIRST. THEN WE WILL HAVE OUR LAST CHANCE TO PULL OUT OF THE DEATH SPIRAL
...The US Federal government is currently spending about $300 billion per month. To do so, it borrows around $100 billion per month. The word borrows is in quotes, because most of that new debt is created by the Treasury and bought up by the Federal Reserve, so in essence the government just writes itself a check for $100 billion dollars every month. If this continues forever, then the US Dollar will become worthless, so a push is on to get foreign central banks to take on some of this debt as well. They can do that, of course, but, seeing as the US Dollar is on track to become worthless, they have been decreasing their holdings of US Treasuries rather than increasing them. Nobody can tell how long such a scenario can continue to unfold, so what one looks for in a situation like this is signs of desperation...
THIS IS A COLUMN QUITE SUITABLE FOR ASSOCIATION WITH RAY BRADBURY
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Fragility and Collapse: Slowly at first, then all at once Josh Keyes YOU MUST READ THIS ALL!
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Jun 2012
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I wonder what the next Bradbury, maybe born in 2000 or 2020 will see to write about.
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