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FRED
06-16-07, 10:52 AM
http://www.itulip.com/images/nukeposter.jpgAre You a Doomer?

Editor's Note: Anyone looking for a comprehensive and well researched debunking of doomer thinking need look no further than this presentation by Gary Alexander, a self-described life long and 18 years ago reformed professional doomer. (Thank you iTulip member Sapiens for finding it.) Alexander goes into his personal 50 plus year personal adventures in doomerism, as chronicled by the books that appeared during his career, starting with the 1957 nuclear doomsday book "On the Beach" by Nevil Shute and ending with the economic devastation envisioned by James Dale Davidson's and Lord William Rees-Mogg's “The Great Reckoning” (1990). If you have doomers among your friends or family members, or if you suspect yourself as one, read on. iTulip community members will want to take the brief Are We Doomers? (http://www.itulip.com/forums/survey.php?&do=take&sid=28) survey to measure the level of doomishness in our community, ranging from Mad Max Pessimists to Mary Poppins Optimists (average completion time: 2min 3sec).

In critique, I prefer the already well established term "doomer" to Alexander's term "apocaholic." Second, as a co-author of a book americasbubbleeconomy published by John Wiley & Sons and covered by Kiplingers, I am compelled to object to its inclusion on Alexander's list of "doomsday books." I'd also scratch John Rubino's “How to Profit from the Coming Real Estate Bust” off the list, or if Alexander is going to keep it add Peter Warburton's scholarly "Debt and Delusion."

Neither America's Bubble Economy nor iTulip are about doom. They are about the nature of the next inevitable financial market and economic setback, how one might reasonably prepare for and deal with it, including not buying into the press coverage that will appear during the event to give everyone the impression that things will never get better. iTulip additionally explores the social implications, as those bear not only upon the experience of the period but also the form that the recovery is likely to take, the opportunity in the crisis.

iTulip readers are skeptical, not paranoid, and they don't like to be surprised by unseemly economic events, such as the crash of the stock market bubble from 2000 to 2002 and the slow motion crash of the housing bubble which began in 2005, especially as these (http://www.itulip.com/GlobeArchiveJanszen.htm) events (http://www.itulip.com/housingnotlikeequities.htm) were predictable by reasonably observant people of average intelligence who do not suffer the Desperate Optimism of the Invested.

We are optimistic in the long run, citing a few thousand years of human progress as our justification for that optimism. To the frustration of the majority of iTulip readers, iTulip's editorial position on global warming, for example, is on the fence. We do not go along with Peak Oil doom prophesies: too much lead time, too many solutions–such as conservation–already exist, and too much money to be made on solving the problem. Flu pandemic scares are BS.

iTulip is not doomer's heaven.


http://www.itulip.com/images/doomerscale.jpg

Latest iTulip Community "Are We Doomers?" Survey Summary Results: (http://www.itulip.com/forums/survey.php?do=results&sid=28)

5.00 on the iTulip Doomer Scale (5.0 = Neutral +/- 3%) with 80 surveys filled 10:00PM EDT 6/20/07

Take the "Are We Doomers?" Survey (http://www.itulip.com/forums/survey.php?&do=take&sid=28)

Paradoxically, many of the financial and economic risks that have scared doomers for decades, and which Alexander in his presentation below dismisses as failed forecasts for having not occurred–yet–will in the event contribute to the challenges we will face during the transition period we anticipate. Doomers often correctly identify the source of future crises but fail to understand the timescale on which they operate. Forty or fifty years may pass before the seeds of an economic crisis bear fruit, before an imbalance reaches its terminal stage and ends, and several smaller and resolvable blossomings often occur along the way.

Alexander lists many "The Coming Fill-in-the-Blank Crisis" books which have appeared over the years, such as the "The Coming Dollar Devaluation" (1970) by Harry Browne and "The Coming Credit Collapse" (1974), by Alexander Paris. But he neglects to note that while these writers may have the timing wrong, the basic premises of their warnings–that credit cannot be expanded forever more rapidly than GDP growth and that currencies valued daily by the actions of a herd of speculators are prone to wild price swings–are essentially valid. We have warned readers about the implications of the credit bubble since 1998, and the folks over at the Prudent Bear longer than that. We also warned that the end was not near, that the credit bubble was likely to go on for many years, and spin off sub-bubbles, such as the housing bubble, junk bond bubble, and private equity bubble. Today those doomers over at the Wall Street Journal warn of an imminent collapse in their own "Coming..." piece called The Coming Credit Meltdown (http://online.wsj.com/article/SB118212541231038534.html), and they're probably right. For the junk bond bubble, the end is near. Whether that will mark the beginning of the end of the credit bubble versus a credit bubble, only time will tell. The iTulip community tends toward a pessimistic view on this; a lengthy and established record of arrogance, corruption, and incompetence among economic and monetary policy makers does little to reinforce expectations of a happy outcome. Starting with the collapse of the housing bubble, followed by junk bonds, various flavors of securitized debt, the stock market, and the bond market itself, we not foresee a "soft landing."


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Doomer Porn

Doomers occasionally choose the right things to worry about while mistakenly believing that the crisis each will produce is imminent, but just as often they worry about the wrong things entirely. They tend to see all threats as presenting an equally high level of risk, and soon. Y2K was a reason to buy gold and hole up in the basement with canned food and a shotgun, hiding from the soon to be wandering hordes of armed gangs searching for food. While millions of words of dire warning were being written about this non-event–we at iTulip joked about Y2K at the time–Islamic fundamentalists were planning the attack on the U.S. they made 19 months later that killed thousands of people as they went about their daily routine. That threat received very little press before the event.

Doomers tend to overlook real risks in favor of the ones other doomers have already latched onto and are excited about. Reviewing Alexander's list of events below, notably absent is the one that iTulip first warned its readers about, the year 2000 stock market crash. He also discounts the economic impact of the housing bubble, even as each article of faith that argues for a benign outcome, from "there is no bubble" to "prices only go up" to "the sub-prime meltdown won't spread," is contradicted by unfolding events.

I have theories about why doomers get the timescales of ongoing threats wrong, treat all threats as equal, and often miss the actual threats–what makes doomers tick.

Doomerism is a narcissistic behavior rooted in childhood experiences that set deep in the doomer's psyche an unconscious expectation of their own kind of doom, such as sudden decline into sickness or poverty, or some other misfortune. They then project this undefined general sense of personal foreboding onto the world. This theory accounts for the selectiveness of doomers, why some obsess about economic doom prophesies, such as Peak Oil, while others dwell on impending public health disasters, such as bird flu. The selectivity likely relates back to the original causes, a family financial crisis versus serious illness. Or maybe Mom or Dad or both were doomers; they learned to obsess about future doom on their father's knee, in which case the focus of obsession is less specific, and moves from one doom de jour to the next, whatever is getting the most press at the time. This theory also explains why doomers get the timing wrong: dooming is not about understanding the nature of a dysfunctional economic or financial system process and how long it is likely to take to reach its turning point so that one might deal constructively with the risks. It's about the emotional impact of the idea of the threat, the drama of it. (Ok, so my mother was a psychologist and my uncle a psychiatrist, and I've done some research on my own. I recommend readers who are curious put Freud on their reading list. The concept of repetition compulsion applies to doomers, as expressed by one of my favorite Freud observations of neurosis: "The wish is father to the fear.")

http://www.itulip.com/images/birdflu.jpgThe final point I'll make is that we all have at least some doomer in us, yours truly included, and wealth offers no protection. Berkshire Hathway's Warren Buffett told Charlie Rose in a May 10, 2007 interview that the world his children will grow up in after he passes on will be a better place than the one he lived in, "if they survive" he added, grimly, and went on to cite various terrorism threats. Charlie moved the interview on quickly past Warren's doomer moment.

As another example, I attended a venture capital conference in California last year where some of the most successful and well known VCs on the west coast appealed to entrepreneurs in the audience for ideas to deal with an inevitable global flu pandemic. SARs was in the press just then. John Doerr said, "It's only a matter of when, not if." He put his money where his doomy flu pandemic beliefs are, investing tens of millions since then. The managing general partner of another firm said he was building an energy independent off-the-grid home in the desert at the cost of several million dollars to avoid the flu pandemic chaos.

These fears are unjustified. If you read any of the books on the last major global flu pandemic, which took place in 1918, it becomes apparent what caused it and why it can't happen again: the medical establishment knew little about the causes of flu and how to prevent its spread, and WWI created the worst political environment imaginable for rational and cooperative approaches to coping with the problem. This is not the case today. Today a chicken gets sick and millions are slaughtered, just in case. In 1918, hundreds of sick soldiers were packed into barracks where the flu went through and killed half of them or more. Then the Army filled the barracks up again, and another 50% died. It was horrific. Crowds were allowed to gather in public for parades, and weeks later thousands would be dead. Today, an outbreak of SARs in Honk Kong clears the streets of one of the most densely populated cities in the world. A few months later, Hong Kong is business as usual. It's not 1918 anymore.

iTulip is about seeing our financial and economic world for what it is, rather than as what we'd like it to be, and that includes discounting one's unconscious doomer fears/wishes. While we try to get our readers to drop naive notions of efficient markets and the invisible hand, to understand that concentrations of financial and political power will always distort a market system, and that these distortions create asset bubbles and other perverse market conditions that eventually lead to crisis, we don't want our readers going off the deep end, either. We want our readers taking reasonable risks with their capital because otherwise you can't make money, while keeping in mind that shit happens–The Great Depression, WWII, the holocaust, the crash of 1987, the 1997 Asian currency crisis, the year 2000 stock market crash–so the old fashioned idea of saving a few bucks for a rainy day and staying out of debt is still a good idea.

Personally, I've never made a dime off pessimism, but haven't done well on optimistic bets, either. Always it is realism that has made me money and served me well. While realism is as hard to achieve as any nirvana, it is important to understand that one's personal biases and prejudices, often unconscious, forged by personal experience, distort the world from the inside out as much if not more to our detriment than do the external actions of bankers and politicians upon us, although those actors are easier to identify and the vilify.

Read on and see if you can identify with any of Gary Alexander's experiences. But should you read this and pronounce yourself a doomer and commit yourself to reform as Gary has, remember this: just because you're paranoid, that doesn't mean they're not all out to get you.

- Eric Janszen – June 18, 2007
Join Me in a Crusade for Panic-Free Living
Updated for the Atlanta Investment Conference
20th Anniversary Reunion, 8:45 am, April 20, 2007

By Gary Alexander, Recovering Apocaholic

Hi, I’m Gary and I’m a recovering Apocaholic. I am currently Apocalypse free for nearly 18 years. I left the church of the Religious Apocalypse in 1976, over 30 years ago, and I resigned from the secular church of the Financial Apocalypse in 1989. Yes, I still feel the urge to proclaim the end of all things, from time to time, but I white-knuckle my way to a history book for a little perspective, and then I breathe easier. If you wish to join AA, the only requirement is that you give up the adrenaline rush of media-fed fantasies.

Since I spoke to you last on this subject, in 1994, we have survived “Bankruptcy 1995” (the original epidemic of Hockey Stock charts), the Big Bang in Hong Kong, years of Y2K scare stories, a SARS epidemic, Mad Cow disease, Bird Flu, a real threat on 9/11, Triple Deficits (Budget, Trade and Balance of Payments), wars in Serbia/Kosovo, Iraq and Afghanistan, Deflation in 2003, Inflation since then, The Perfect Storms of 2005 (Katrina, Rita and Wilma, the 3 Witches of the Bermuda Triangle), and today’s reigning fears of Global Warming, $200 Oil and the Sub-prime Housing Loan Crisis Implosion. But before we go from today’s sub-prime fiasco to the ridiculous claims of imminent collapse, let me introduce the depths of my past addiction to the Apocalypse.

I was born in July 1945, the day the first atomic bomb exploded in Alamogordo, New Mexico. That mushroom crowd has haunted our lives ever since. As a teenager, I became convinced the world would end before I was 30.

Too soon old…too late smart, I was very, very wrong:

http://www.itulip.com/images/duck-n-cover.jpg 50 Years Ago (1957) – The “Duck and Cover” Generation

My apocalyptic addiction began 50 years ago, in the Year of Sputnik, when all of us Seattle-area 7th graders – mostly the offspring of Boeing engineers – were told that we must now learn more science and math, to close the missile gap with the Soviet Union.

Back in 1957, the U.S. was the proud owner of 100,000 kilograms of U-235, in what was termed “45 times overkill” of the Soviets. But the Soviets had more missiles than we did. In that same year, 1957, the first underground nuclear explosion was set off near Las Vegas. In junior high, I soon became addicted to dystopian novels, like On the Beach, by Nevil Shute, a Briton who had moved to Australia, in order to be among the last on earth to be fried by the inevitable radiation cloud following nuclear Armageddon. The novel was adapted for the screen in 1959, directed by Stanley Kramer, and starring Gregory Peck as captain Dwight Lionel Towers of the USS Sawfish. The story was set in the near future, 1963 in the book (1964 in the movie), in the months following World War III. Nuclear fallout killed ALL life, with hot air currents killing off Australia last,

The characters made their best effort to enjoy what remained of their life before dying from radiation poisoning. The film was shot in Melbourne, with a chilling ending of wind-swept but empty city streets there. That image has haunted me, to this day. I am convinced that this hopelessness sewed the seeds for the senseless rush to immediate gratification in the 1960s. With a world about to die, hedonism soon reigned supreme.

In high school, I read Aldous Huxley’s “Brave New World” and the scathing exposes and novels of Philip Wylie (1902-1971), son of a Presbyterian minister father and a novelist mother (who died when he was five). Wylie wrote apocalyptic nuclear war novels like “Tomorrow” (1954), about the atomic bombing of two fictional Midwest cities adjacent to each other in the
mid-1950s. One had an effective civil defense program, and the other did not. Later, I read his novel, “Triumph” (1963), another graphic description of the effects of nuclear war story involving a worst-case USA/USSR “spasm war,” in which both sides emptied their arsenals into each other with extensive use of “dirty” bombs to maximize casualties, resulting in the main characters (in a very deep bomb shelter) being the sole survivors in the northern hemisphere, the new Adam and Eve of a new creation.

In the financial realm, I was also becoming convinced that America’s economy was doomed, especially after reading John Kenneth Galbraith’s “The Affluent Society” (1958), which said the rich get richer and the poor get poorer, while advertising creates artificial demand in the West. The same theme was echoed in Vance Packard’s “The Hidden Persuaders” (1957). He followed up with “The Status Seekers” (1959) and “The Waste Makers” (1960). Also popular was a book we young cynics all read, “The Ugly American” (1958), by William Lederer and Eugene Burdick. America was supposedly incredibly shallow and bigoted in the 1950s, soon to be rescued by the Liberated 1960s.

P.S. The world is still a dangerous and violent place, but the most chilling example of violent death now is in Africa, with machetes. We’ve now gone over 61 years without using nuclear bombs against humans – thank God. Back in the late 1960s, Herman Kahn wrote “On Thermonuclear War” and “Thinking the Unthinkable,” in which he demonstrated that we can survive a nuclear holocaust, but that didn’t seem likely in 1962:

http://www.itulip.com/images/CubanMissile.jpg 45 Years Ago (1962): The Cuban Missile Crisis and “Silent Spring”

The closest we came to a nuclear exchange was in October, 1962, during the Cuban Missile Crisis, in my high school senior year. That was one of the events that caused me to throw away a National Merit Scholarship and decide to attend a small church college that seemed to made sense of these global threats. Another impetus was the collapse of the global ecology, as demonstrated in another best-selling book that I read in 1962:

Rachel Carson (1907-1964) published “Silent Spring” in 1962, based on a compilation of articles she had written for The New Yorker. Her book is credited with launching the environmental movement that culminated in Earth Day (1970), including a worldwide ban on the main villain in her book, DDT. Silent Spring was a Book of the Month Club main selection, spending several weeks on the New York Times best seller list. It was actively endorsed by one of my heroes at the time, a Washington State native, Supreme Court Justice William O. Douglas, as well as many other nature advocates in my school.

As a result of that book and further research, I wrote an extended scientific article for a national magazine in 1970, linking the chemicals in DDT to many of the pest sprays commonly used in homes. I wrote other articles supporting the ban in DDT, which I am ashamed to say, has caused the deaths of millions of Asians and Africans since then. Many insect-borne diseases were on the verge of extinction in 1970, when the U.S. tied foreign aid to poor nations to their “voluntary” banning of DDT, to our great shame.

Knock, knock!

Who’s There?

Armageddon!

Armageddon Who?

Armageddon outa here!

In 1963, I threw away my future to apply to Ambassador College and join the Worldwide Church of God, in effect saying “Armageddon Outa Here.” The book that motivated me the most was Herbert Armstrong’s “1975 in Prophecy,” in which he showed from several perspectives that the world couldn’t make it past 1975. After four years of their college indoctrination, I became a leading writer, editor and researcher for a decade (1966-76) for their publications, turning secular trends into Apocalyptic rhetoric in magazines and in the electronic radio media, writing radio and TV scripts for the voice of “The World Tomorrow,” the late Garner Ted Armstrong. I didn’t have long to wait for ammunition.

http://www.itulip.com/images/Malthus.jpg40 Years Ago: “The Population Bomb!” and “Famine 1975”

Upon graduation from college, my job of predicting the End of the World by 1975 was made incredibly easier by a wave of new books proclaiming the inevitable end, based on the centuries-old (and easily discredited) theories of Thomas Robert Malthus, who wrote in 1798 that population grew geometrically, but food production could only grow in small (arithmetic) increments. In 1967, the brothers William and Paul Paddock wrote a book called “Famine 1975,” in which they said it was impossible for food production to keep up with population growth. The title of their first chapter said, “The Population-Food Collision Is Inevitable; It Is Foredoomed.” The Paddocks believed that the Malthusian formula was on a collision course and all we could do was starve a little less than others.

Then came Paul Ehrlich’s “The Population Bomb” (1968), in which he opened famously by saying, “The battle to feed humanity is over. In the 1970s and 1980s, hundreds of millions of people will starve to death, in spite of any crash programs embarked upon now.” Writing in Ramparts magazine, he went even further, “Hundreds of millions of people will soon perish in smog disasters in New York and Los Angeles…the oceans will die of DDT poisoning by 1979…the U.S. life expectancy will drop to 42 years by 1980, due to cancer epidemics.” Hepatitis and dysentery would sweep America by 1980 and nearly all of us would wear gas masks. Over 65 million Americans would starve in the 1980s, leaving only 22.6 million starved Americans alive in 1990. In 1990, he incredibly justified his claims as being right – a trait common to Doomsday prophets. *

* “The individual will frequently emerge not only unshaken but even more convinced of the truth of his beliefs than ever before. Indeed, he may even show a new fervor about convincing and converting other people to his view.” – Leon Festinger, “When Prophecies Fail.”

In the meantime, Dr. Normal Borlaug was launching the Green Revolution, which has managed to feed billions more people on moderately more arable soil than in the 1960s. Instead of starving against our will, millions of us are trying to starve voluntarily – by dieting. Food is far cheaper, relative to the overall growth of the cost of living, than in the 1960s. From 1977 to 1994, food costs fell 77% in real terms. Grain is in surplus, despite 46 million idle arable acres of U.S. farmland, and 11 million idle acres in Europe.

In the first 15 years after “Earth Day,” we made great progress against pollution. The amount of particulates spewed into the air fell by 64%, carbon monoxide emissions fell 38%, ocean dumping of industrial wastes was cut by 94%, and the number of rivers unfit for swimming dropped 44%. By 1990, cars emitted 78% fewer pollutants. Yet Lester Brown’s annual “State of the Earth” keeps saying the opposite, that pollution is growing.

And for anyone who still believes in Dr. Malthus, I have one word to share with you: Chickens! Are they food, or are they population? Do they grow arithmetically, or geometrically? On the Delmarva Peninsula alone, 90 million cluckers live their nasty, brutish, crowded and short lives on the way the chopping block and your local KFC.

The famine/population fear is older than Malthus. Confucius thought the earth was full, 2500 years ago. Romans thought they had “worn out the earth.” St. Jerome said “the world is already full, and the population too large for the soil.” Tertullian wailed about “teeming populations of Carthage” with “numbers burdensome to the world.” He saw death from famine, war and disease as “the means of pruning the luxuriance of the human race.” In truth, Rome was rich when it was crowded, and a wasteland when it was empty.

http://www.itulip.com/images/flynnart.gif35 Years Ago – The Club of Rome and “The Limits to Growth”

In the early 1970s, Garner Ted Armstrong pulled me aside and gave me a challenging new project, which might take years to finish. He said that all the globe’s trends are getting worse, and that if we could only “feed all these trends into a computer,” we could predict the precise time of the end. Maybe it’s 1975, as we all still thought at the time, or maybe it’s a little later than that. After all, we can count the hairs we lose each day and predict when we will go bald. So we could do the same with all other trends–depleting resources, increased crime, nuclear overkill, chemical and environmental pollutants, etc.

Ambassador College had a new IBM 370 computer and a huge programming team at my disposal, so I set out on this impossible project full of hope. Two years later, I gave up, but a bunch of secular statisticians in Cambridge, Massachusetts did not give up. They fed all the same kind of data into Harvard’s massive mainframe and came out with their magnum opus, “Limits to Growth,” modeling the future consequences of growing world population and finite resources. The study was commissioned by the world’s aristocracy, gathered into a group they called the Club of Rome. Limits to Growth was written by Dennis and Donella Meadows, among many others. The book used computer simulation to project a rolling Doomsday. (All this made me feel like less of a religious nut….)

In short, the report’s authors projected that, at the exponential growth rates they expected to continue, all the known world supplies of zinc, gold, tin, copper, oil, and natural gas would be completely exhausted in 1992. They set specific dates for each commodity. President Carter later bought into this idea and published his gloomy Global 2000 report.

Then, along came Dr. Julian Simon, who bet Dr. Paul Ehrlich $1,000 that the price of commodities would FALL, not rise, implying an expansion of resources, rather than a contraction of supplies during the decade in which they were all to disappear–the 1980s.

By 1985, instead of running out of oil, an oil glut pushed the price down from $40 to $10 a barrel. Shortages beget higher prices and more exploration, not depletion of resources. In the extreme cases, shortages create new technologies. A wood shortage in England in the early 17th Century led to the use of coal and the birth of the industrial revolution. A shortage of whales led to the use and discovery of petroleum, and electrical lighting. The stench of horse manure in urban streets led to the invention of the horseless carriage.

http://www.itulip.com/images/IceAge2.jpg30 Years Ago – Global Cooling and “The Next Ice Age”

My final TV script for Garner Ted Armstrong came in 1975, when I was about to leave the cocoon of the Church of the Apocalypse for a more mundane job at the University of Southern California. He wanted a program on Global Cooling, or the Coming Ice Age. In 1975, there were several covers in major news magazines about the Coming Ice Age.

One example was Newsweek, for the week of April 28, 1975. It said that leading climate scientists were “almost unanimous” (sound familiar?) in their predictions of global cooling. Time Magazine had “The Coming Ice Age” on its cover, and the November 1976 issue of National Geographic had a lead article on the problem of global cooling.

Later on, physicists combined the threat of natural cooling with nuclear war to predict a “Nuclear Winter.” Our future was clearly frigid. The trend from 1935 through 1975 was a gradual cooling of temperatures, since the Dust Bowl of the 1930s. (Most record-high state temperatures, to this day, were set in the 1930s, not in the 1990s, Mr. Gore.)

One day in the control studio, Garner Ted Armstrong showed me a news clipping that pointed to the potential threat of carbon-dioxide emissions contributing to future global warming – a threat that currently assaults us in the daily media. He looked me in the eye, as his trusted researcher, and asked point blank, “Which is it – warming or cooling?”

“With any luck, sir,” I quipped, “We’ll get both, and then they will offset each other.”

He was not amused. But I was on my way out and no longer cared what he thought. I was happy that a peaceful new job awaited me at a less Apocalyptic California college. But that did not stop me from reading a series of best-sellers and coming back to the Doomsday business three years later. In the 1970s alone, all of this was “Coming…”

The Coming Dollar Devaluation (1970) by Harry Browne
The Coming Dark Age (1971) by Roberto Vacca
The Coming Credit Collapse (1974), by Alexander Paris
The Coming Bad Years (1978), but Howard Ruff
The Coming Real Estate Crash (1979) by English and Cardiff

The 1970s were also book-ended by two big #1 best-sellers telling the same story from the religious and secular angle: “The Late Great Planet Earth” by Hal Lindsey (1970) and “Crisis Investing” by Doug Casey (1979). They were the biggest best-sellers each year.

http://www.itulip.com/images/kondratieff.jpg25 Years Ago (1982): The Coming Kondratieff Collapse!

I didn’t stay out of the Doomsday press for long. By 1979, I was back in the business, in Virginia, writing free-lance special reports for a leading direct mail marketer on a more secular version of The End of the World. As “Mr. X,” I wrote a series of reports on survival havens, banking secrecy, the collapse of the stock market and the fiat currency system. I was consulting editor to Survival Tomorrow, Tax Angles and Personal Finance (formerly the Inflation Survival Letter) at KCI. In 1982, my first special report for Jim Blanchard was on the coming Third World Loan Crisis, leading to the demise of major New York City money center banks, including the much maligned Citibank.

In brief, I said, trying to re-arrange loans to Third World nations was “like re-arranging deck chairs on the Titanic.” At the time, most Latin American nations were following the Juan Peron model, as military dictatorships, starting in Peru (from 1948 to 1980), then Venezuela (1952), Colombia (1953), Bolivia (1964), Brazil (1964), Uruguay (1972) and Chile, under Gen. Auguste Pinochet (1973 to 1988). The giant of the region, Brazil, was ruled by a succession of four-star generals from 1964 to 1985, as their economy reeled from one crisis to another. Central America was in the same condition. El Salvador was under the military’s thumb for over 60 years, from 1931 to 1992. Then came military juntas in Guatemala (1954 to 1986), Honduras (1963-82), Nicaragua’s Sandinistas (1979-90) and Panama under General Noreiga (1968-89), so the situation indeed looked bleak.

Latin America dominated the news in 1982, when I was writing that Third World debt threatened to bring down the region, and perhaps cause many major North American money center banks to fail. The major New York money banks and the U.S. Treasury of the late 1970s had loaned too much money to the “ABC” nations (Argentina, Brazil and Chile), who were each in default on those loans, after crippling back-to-back recessions.

Like others, I said it was futile to re-arrange those loans. But behind the scenes, several New York bankers and Reagan-era Treasury officials quietly negotiated with the Latin American debtors, offering to reschedule their debts at lower interest rates, in exchange for some political concessions – such as free elections – which resulted in the gradual forced retirement of several military dictators. Throughout the mid-1980s, military juntas were replaced by democracies, the last one by a dramatic invasion of Panama in 1989.

As a result of increased economic freedom south of the border, between 1987 and 1994, external debt as a percent of GDP declined by fully half in most Latin American nations: In Chile, external debt fell from 109% of GDP in 1987 to 42% by 1994. Argentina’s debt fell from 58% of GDP to 31%. The biggest basket case of the early 1980s, Brazil, reduced its external debt to the lowest level in Latin America, at just 25.8% by 1994. Even Mexico’s debt fell significantly, from 79% of GDP to 44%. We heard all about their high debt levels in the 1980s. But I bet your never heard the rest of the story. In 1975, there were only 31 global democracies, but now, we have over 120 democracies.

By the way, Nikolai Kondratieff was proved right: The 1979-82 depression came exactly 50 years after the 1929-32 depression, but none of the Doomsday prophets noticed that.

http://www.itulip.com/images/marketcrash.jpg20 Years Ago – A Wave of “Coming Crash” Books (after the Crash)

The #1 Best-seller in 1987 was Dr. Ravi Batra’s “The Great Depression of 1990.” Dr. Batra turned out to be right on his timing, but wrong on his geography. Japan suffered a decade-long Great Depression in the 1990s, but according to Batra and others, Japan was the last place this could happen. Many other best-sellers of 1987 were proclaiming the superiority of the Japanese management system, Japan’s work ethic, its currency, its wealth and ability to “buy up American assets” from Hawaiian hotels to Hollywood studios. (As it turned out, Japan only knew how to pay way too much for those assets.)

Several other authors (including me) tried their hands at “coming crash” books, sadly published about the same time the crash happened, failing to warn anyone in time, and keeping them from re-investing in stocks, which would have been the smartest move at the time. In the next wave of “coming crash” books, the overextended American debts were the paramount threat. Harry Browne wrote “The Economic Time Bomb: How You Can Profit from the Emerging Crisis” in 1989. Harry’s “bullet points” predict this:
Be ready for both a deep recession and severe inflation.
Why deposit insurance doesn’t make your bank account safe.
How the trade deficit could trigger the next depression.
Budget deficits have reached a limit – causing the worst recession since 1937.
An economic time bomb is set to implode – one wrong move can set it off.Not one threat came to pass, despite deeper budget deficits and trade deficits in 1990-91.

Then came “The Great Reckoning” (1990), also predicting a “Depression in the 1990s.” But the 1990s turned out to be the best decade ever for global economic growth and the stock markets of free countries, as the Dow gained 5-fold, from 2,365 to 11,723.

It was at this time (1990) that I wised up and, mercifully, partook in the bulk of that rise:

10-50 Years Ago DOW 10-Year Gain

April 18, 1957 488.03 192.8%

April 20, 1967 878.62 80.0%

April 20, 1977 942.59 7.3%

April 20, 1987 2270.60 140.9%

April 21, 1997 6660.21 193.3%

April of 2007 c. 12,500 87.7%

60-Year Gain: 75-fold +7,400%

For my grandchildren’s generation, I look for another 75-fold gain in the next 60 years, despite threats from Global Warming, the Housing Crisis, the Triple Deficits in America, and anything else Doomsday prophets dream up in the future. I have been inoculated against such fears. Please join me in abandoning the siren song of the Prophets of Doom.


“Apocaholics Anonymous” Bibliography: For Further Reading

(1) Proof that “Things Really are Getting Better”

Anderson, Terry L., editor, “You Have to Admit It’s Getting Better: From Economic Prosperity to Environmental Quality,” Hoover Press, 202 pages.

Goklany, Indur M., “The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives, on a Cleaner Planet,” Cato Institute, 2007

Lomborg, Bjorn, “The Skeptical Environmentalist: Measuring the Real State of the World,” Cambridge University Press, 1998, 352 pages + 153p of notes and bibliography.

Moore, Stephen & Simon Julian L., “It’s Getting Better All the Time: 100 Greatest Trends of the Last 100 Years, CATO Institute, 2000, 265 pages.

Simon, Julian L., “Population Matters: People, Resources, Environment and Immigration,” Transaction Publishers, 1993


(2) Countering the Current Global Warming Scare

Avery, Dennis T. & Singer, S. Fred, “Unstoppable Global Warming: Every 1,500 Years,” Rowman & Littlefield, 2007

Horner, Christopher C., “The Politically Incorrect Guide to Global Warming and Environmentalism,” Regnery Publishing, 2007

Michaels, Patrick, “Shattered Consensus” (2005) and “Meltdown” (2003)


(3) How Media and Mass Psychosis Mislead You

Chafetz, Morris E., MD, “Big Fat Liars: How Politicians, Corporations, and the Media Use Science and Statistics to Manipulate the Public,” Nelson Current, 2005.

Mackay, Charles, “Extraordinary Popular Delusions and the Madness of Crowds,” 1841 first edition, 700+ pages

Simon, Julian, “Hoodwinking the Nation,” Transaction Publishers, 1999, 127 pages


(4) Currently Popular Doomsday Books in 2007: Random Sampling

Arnold, Daniel A., “The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away.”

Brussee, Warren: “The Second Great Depression: Starting 2007, Ending 2020”

Panzner, Michael, “Financial Armageddon: Protecting Your Future from Four Impending Catastrophes.”

Rubino, John, “How to Profit from the Coming Real Estate Bust”

Schiff, Peter, “Crash Proof: How to Profit from the Coming Economic Collapse.”

Wiedemer, David & Robert, “America’s Bubble Economy: Profit When it Pops”

In addition, Bill Bonner’s & Addison Wiggin’s “Empire of Debt: The Rise of an Epic Financial Crisis” (a 2005 best-seller) will be turned into a documentary film in 2008. Perhaps they will join Al Gore in the Apocaholics Hall of Fame in Hollywood.

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Uncle Jack
06-16-07, 05:22 PM
I don't mean to sound paranoid, but how do they know it's coming to a theatre near me?

I'm not a doomer. I'm bearish, but I'm no doomer.

Ishmael
06-16-07, 09:41 PM
Am I a doomer. I never worried too much about nukes taking me out and lived and worked in Europe (and the Middle East) during the late 70's and 80's when The Red Brigade and such things were happening. Was hauled out of my car one night by several guys with AK 47's and several times faced people who did not like me because I was an American.

However, the mathematical side of me tell me this is an unsustainable trend. People ship material stuff to us and we ship them paper and it seems to be going faster and faster. Debt has always been unsustainable in the past so why shouldn't it be in the future. Countries rise to the top and then topple. In 1928 (a mere 79) years ago we saw it happen, why should we be any different. Because we are stronger and smarter. As a whole I think we are weaker and dumber.

The real eye opener is when the lies to cover the problems become to blatant that anyone with half of a brain must see them.

Things change! I also have always recognized that it takes longer than you think it will. Why is that? Because there are strong entrenched positions which will not give up their power easily. They will be drug from their position with their fingers clawing at their thick persian carpets. They will fight it kicking and screaming when anyone with a brain will see that it should change. Always has been this way and it always will be.

BlackVoid
06-17-07, 09:22 AM
I had a good laugh.

So, because nothing really bad has happened in the last 60 years, nothing bad will happen in the future? ROFL. Flawlass argument really, hahaha.

Shit DOES happen. I am not saying you have to be a doomer, but just because prophecies of the last half century did not happen it does not make them invalid. Especially regarding the Club of Rome. Clearly exponential growth on a finite system is not possible forever.

tree
06-17-07, 04:53 PM
This is excellent, critical stuff, EJ, that deserves wide reading.

Having spent most of my career journalistically "sounding the alarm" on this or that medical or financial "crisis," I had a wake-up call (life-threatening illness). It made me ask myself whether my need to point out "the writing on the wall" was a sad effect of an unconquered dark side (product of a violent upbringing in a Holocaust refugee household) that perhaps helped bring on my illness. I have thought a lot about changing what I think and write about.

And yet, and yet, I still cannot help but feel our economic situation is unsustainable, that we are in for a long and sustained period of punishing inflation and high interest rates making life painful for Americans without low overhead or steady income or deep savings. And I do not trust corporate goons who profit from selling technology to government to "control" competition for resources (e.g. health care, transportation, jobs).

Am I still blinded by my doomerism, or, like a clock, am I right at least twice (or is that once?) a day?

Walk through any big city today -- gentrification, luxury everywhere, everyone wearing clothes with logos signifying expense, people eating sandwiches that cost more than the hourly minimum wage. Is this the rising U.S. I must embrace, or the falling one in which I must survive?

And where the heck do I put my life savings?!

synthesis66
06-17-07, 11:56 PM
Things are never as good or bad as they seem.

metalman
06-18-07, 12:23 AM
Things are never as good or bad as they seem.

Prediction is very hard, especially about the future.
- Yogi Berra

van01
06-18-07, 03:45 AM
The Coming Dollar Devaluation (1970) by Harry Browne - looks like Harry Browne was correct indeed!

The Coming Real Estate Crash (1979) by English and Cardiff - again, the crash DID appear!


Otherwise, a really good article!

Charles Mackay
06-18-07, 01:29 PM
All of the bottom picking bullish books that will be written during the coming SuperCycle BEAR market will be just as wrong as all of the bearish books written during the past SuperCycle BULL market were.

This book is a neat little contrary opinion indicator.

necron99
06-19-07, 11:04 AM
I've been a lurker on the iTulip site for about three years now, and I am deeply ashamed that my first post must contain a lot of negativity. But the article by Gary Alexander was so egregious that I had to register in order to set right some falsehoods. The introduction by Eric Janszen expressed a tremendously prudent, rational, wise attitude, so I was really looking forward to reading a well-written article explaining why we're not doomed. Unfortunately I was sorely disappointed by Gary Alexander's piece.

First permit me to analyze the structure of his argument. Mr. Alexander writes over 3600 words detailing his many failures of judgment in the past. Then he coughs up a few numbers to show that the stock market has risen. And then that's it; that's literally the entire basis with which he urges us to trust his judgment now, and dismiss any concerns about future problems. Based on what, his past track record? Was this article edited or excerpted from a longer piece? Because his past track record inspires little confidence, and neither does his grasp of science.

The first red flag came early in the article when Mr. Alexander said, "I wrote other articles supporting the ban in DDT, which I am ashamed to say, has caused the deaths of millions of Asians and Africans since then." Well good news, Mr. Alexander: you can forget about the shame, because that statement is a pure political talking point without factual merit. The fact that the DDT Ban Treaty contains explicit loopholes which allow any country, right up to the present day, to spray DDT for "Public Health" reasons ( http://www.who.int/inf-pr-2000/en/note2000-15.html ) is only the first in a very, very long list of reasons why that statement is false. The treaty is actually well- and efficiently-written to ban the spraying of DDT on crops against agricultural pests while still allowing DDT's use to combat insect-borne diseases. You can read the rest of the list at ( http://timlambert.org/2005/10/crime-of-the-century/ ).

Then we encounter the tired canard that we can't trust scientists about Global Warming today because they predicted Global Cooling 30 years ago. As Mr. Alexander himself argues, just because Newsweek published a story on something doesn't mean it's true; so we should not be surprised that when Newsweek said scientists were "almost unanimous" in predicting global cooling, Newsweek was wrong. Only a few scientists ever predicted global cooling, and it was based on a small amount of evidence. (Newsweek eventually issued a rather self-serving retraction, at http://www.msnbc.msn.com/id/15391426/site/newsweek/ ). Today it's the scientists, not Newsweek, who claim a concensus; and there is a huge cornucopia of numerical evidence for Global Warming today, compared to the predictions of the 1970s. You can read more at http://www.realclimate.org/index.php/archives/2005/01/the-global-cooling-myth/ and http://www.realclimate.org/index.php/archives/2006/10/global-cooling-again .

By the time I got to Mr. Alexander's Bibliography, I was fully expecting to see the books by Bjorn Lomborg, Dennis Avery & Fred Singer there, and Mr. Alexander did not disappoint. While those authors served a valuable purpose by encouraging debate -- rational debate eventually reaches some sort of conclusion, and the conclusions have gone against Mssrs. Lomborg, Avery, and Singer. See:
http://www.realclimate.org/index.php/archives/2006/11/avery-and-singer-unstoppable-hot-air/
http://www.sciam.com/article.cfm?articleID=000F3D47-C6D2-1CEB-93F6809EC5880000
http://www.americanscientist.org/template/BookReviewTypeDetail/assetid/17791
http://www.ucsusa.org/global_warming/science/ucs-examines-the-skeptical-environmentalist.html
http://education.guardian.co.uk/higher/physicalscience/story/0,9836,539739,00.html

When one analyzes the contents of speeches and presentations by Mssrs. Avery, Singer, Lomborg, Michael Crichton, Sentaor Inhofe, and now Mr. Alexander, one finds -- discounting the false pseudoscience like the DDT Ban talking point -- they actually contribute virtually nothing positive to the debate. They are rarely anything but reactionaries whose only tactic is to shout "NO!" into the faces of people who know the science better than they do. This leads them into some interesting ironies. For example, calling Al Gore an "Apocaholic" at the very end of the article. Anyone who had taken the (admittedly difficult) effort to read or listen to virtually any Al Gore speech through to the end, would know that Mr. Gore is convinced that the technology and resources to surmount these environmental problems already exist right now, today, and that the only thing we lack is the decision to apply those things. And furthermore, that we can make money doing so, not lose money. (Mr. Gore frequently cites the Rocky Mountain Institute, which is entirely dedicated to that proposition: http://www.rmi.org/images/PDFs/Climate/C06-10_FixTheClimateProb.pdf ) Whether Mr. Gore is right about that or not, does that sound like an "Apocaholic" or "Doomer" to anyone? I'm no fan of Mr. Gore, I voted against him in two of his three national elections. But it seems obvious that Mr. Alexander is attacking a media caricature of Mr. Gore, without even coming close to addressing Mr. Gore's factual points. I wouldn't take financial advice from someone with that type of behavior.

Nothing I have written above can in any way prove the "truth" of any so-called Doomsday scenario. But that's because the iTulip editors have already staked out an eminently reasonable position: that we still have time, resources, and tried-and-true American ingenuity on our side to resolve these problems. But by using shoddy science and talking-point arguments, "Denialists" like Mr. Alexander seek to blind us not only to good, trustworthy science which predicts these problems; but also, to good economics, such as the Rocky Mountain Institute noted above.

The ultimate irony is that, by insisting upon inaction and willful disregard of science, "Denialists" such as Mr. Alexander may be the people most directly responsible... if and when these difficult but resolveable problems eventually become the total calamities which Mr. Alexander refuses to believe in anymore.

I am consistently pleased with the things that the iTulip moderators themselves write on the website. But if any iTulip member shifted their investements around based on the contents of Mr. Alexander's speech... well, frankly, the best you can hope for is that you accidentally wound up right for the wrong reasons.

FRED
06-19-07, 11:38 AM
Nothing I have written above can in any way prove the "truth" of any so-called Doomsday scenario. But that's because the iTulip editors have already staked out an eminently reasonable position: that we still have time, resources, and tried-and-true American ingenuity on our side to resolve these problems. But by using shoddy science and talking-point arguments, "Denialists" like Mr. Alexander seek to blind us not only to good, trustworthy science which predicts these problems; but also, to good economics, such as the Rocky Mountain Institute noted above.

The ultimate irony is that, by insisting upon inaction and willful disregard of science, "Denialists" such as Mr. Alexander may be the people most directly responsible... if and when these difficult but resolveable problems eventually become the total calamities which Mr. Alexander refuses to believe in anymore.

I am consistently pleased with the things that the iTulip moderators themselves write on the website. But if any iTulip member shifted their investements around based on the contents of Mr. Alexander's speech... well, frankly, the best you can hope for is that you accidentally wound up right for the wrong reasons.

Wow! Have we got some smart, thoughtful folks over here at the Tulip or what? Great comment. Glad you came out to write this. In sum: Gary used to be irrationally pessimistic and we shouldn't be surprised that he's just as irrational in his newer role as an optimist.

Spartacus
06-19-07, 01:28 PM
a highly skeptical doomer - you may remember my posts about being very nervous about my doomer investments, and my post where I imagine myself in 2020, where there's been no fallout from <insert xxx here>, remembering the doomsday stuff I used to read in 2006-2009.

one who knows the anti-doomer rhetoric and agrees with a lot of it

one who's skeptical of "argument by outrage"

and thus wants to ignore all the doomers, but just can't bring myself to ignore them because I think there's a grain of truth in there.

ASH
06-19-07, 09:29 PM
I didn't notice anyone remarking upon this point, so I wanted to inquire: have we considered how visions of impending doom play to our internal sense of justice? I attempt to be as dispassionate as possible when thinking about what is likely to happen, yet I cannot deny that a number of things which I think will eventually happen -- disasters, really -- amount to comeuppance for improvident behavior. For me, this strongly applies to debt disaster scenarios (both personal and public), but it could just as easily apply to environmental disaster scenarios. Some part of me wants my spendthrift neighbors to be reduced to penury as penance for living and consuming beyond their income; some part of me wants to see the elderly of previous generations surprised to be cleaning tables at McDonalds because they voted themselves more benefits than our demographics can support. These are ugly little self-righteous thoughts, but they are also reasons why I might be receptive to doomsday scenarios.

... And yet, I think the underlying reason why we have a moral bias against certain types of behavior is that there IS usually an eventual comeuppance. Maybe it's not surprising that we should find our hearts aligned with our brains on this one: our values as received are shaped by the experiences of prior generations who have seen the comeuppance up close. However, we have to be careful about how the emotional element affects our perception of the likely pacing of any given scenario. Like various folk awaiting the day of Judgement, we could easily go through life imagining that our own version of economic judgement is just around the corner.

I think of economics as being like chemistry -- specifically, chemical thermodynamics. Thermodynamics will tell you what the equilibrium state of a system is, and how big the driving force to get there is. Similarly, it seems that macroeconomics provides the tools to identify equilibrium (the historic trend) and quantify imbalances (such as housing price bubbles, for instance). However, in chemistry, you need kinetics to tell you how fast the system evolves to its equilbrium state -- and whether it does any oscillating around that state. That's what we're lacking in economics, and it's also the inaccurate element of most doomsday scenarios (although it's clear to me that EJ and others have implemented some form of kinetics in their predictive economic modeling -- I'm just saying it ain't an exact science). We're pretty good at identifying what is out of whack -- and discerning that a major change will come -- but we're rather poor at the timing. (I know that's not an unusual statement for this forum, but I wanted to offer the observation about thermodynamics versus kinetics.)

No -- I'm not a doomer by the standards of the poll. But I do appear to be a self-righteous curmudgeon, waiting for everyone I disagree with 'to get theirs'. Without vigilance, that could lead to similarly low predictive accuracy.

DemonD
06-20-07, 06:59 AM
just a thought, there have been times of significant "doom" in ancient history, in prehistory, in medieval times, etc. many times the factors leading to the doom were not well thought out or understood, like the fact that rome was finally truly sacked once and for all, not when the city got burned, but when the water supply was cut off.

A great empire felled by a few well placed strikes to some stone aquafers.

how about the plague, which was spread by mice and rats from the east?

of course there is historical evidence of famine and locusts and other natural plagues in ancient egypt (bible notwithstanding, the occurrances of the ten plagues short of the last one can all be satisfactorily explained by science).

where did i read an article about darfur, a lot of the violence there has been caused by a warming trend that has made the land more arid, and therefore it is causing friction between the people there?

And of course we had a psychopathic narcissistic megalomaniac who has caused pain and suffering millions of people - and oh yeah his granddaddy made tons of money by selling war materiel to another psychopath who was so thorough they actually recorded the 10 million+ people they gassed to death.

I consider myself a realist, so this is the bearish side; i could just as easily mention how life spans are longer, we can now prevent almost every disease that used to kill millions of people, advances in tech, biotech and agritech have made living on this planet much more comfortable for many people.

Anyway the point about Mr. Alexander being just as irrational on the positive side makes sense. In either case he has shown himself to be of no real value to me.

jeffolie
06-20-07, 05:02 PM
I am a doomer.

Even a broken clock is right twice a day.

Depressions and economic diasters do happen just not often.

DemonD
06-22-07, 03:04 PM
One more thought:

"Just because you are paranoid, it doesn't mean they aren't out to get you."

Rajiv
07-08-07, 02:11 PM
Good article by Joe Bageant (http://bageant.typepad.com/) titled "The Ants of Gaia -- it’s only the end of the world, so quit bitching" (http://www.joebageant.com/joe/2007/07/the-ants-of-gai.html)


As a small boy, I once transferred most of an anthill population from its natural digs in our front yard to a gallon jar of fresh dirt, sprinkled it with a little sugar (in the cartoons, ants are always freaks for sugar, right?) and then left the ants on their own. Of course the day came when all I had was a jar full of dry earth, ant shit and the desolation of their parched little carcasses. I'd guess that it was the lack of water that finally got 'em.

But the most interesting thing in retrospect -- if a jar of dead bugs can be called interesting -- is this: Up until the very end they seemed to be happily and obliviously busy. They constructed an ant society with all of its ant facilities, made more baby ants and did all those things ants do that the proverbial grasshopper is famous for not doing. Obviously Christian predestinationists to the last ant, they met the grasshopper's grim fate by another route, and did not look at all surprised in death.
.
.
.
Global warming as mange medicine

If mankind were discovered on a dog's hide the owner would give the dog a mange dip. Or if the earth were a Petri dish, we would be called pathology. Problem is though, mama earth tends to shed pathogens off her skin, which for us pathogens, is the ultimate catastrophe.

When forced to look at catastrophe on this order of magnitude, we either go numb in shock or look in delusion to something bigger, or at least something with more grandeur than Mother Nature flushing humanity down the toilet. Otherwise, one must accept the both ugly and the weirdly beautiful prospect of oblivion. Meanwhile, we begin too late to "make better choices." Grim choices that do nothing but postpone the inevitable, which are called better ones and sold to us to make ourselves feel better about our toxicity. Burn corn in your gas tank. Go green, with the help of Monsanto. But not many can be concerned even with the matter of better choices. Few can truly grasp the fullness of the danger because there is no way they can get their minds around it, no way to see the world in its entirety. The tadpole cannot conceive of the banks of the pond, much less the wooded watershed that feeds it. But old frogs glimpse of it.

Still, there is choice available, even a superior choice -- the moral one. Accept the truth and act upon it. Take direct action to eliminate human suffering, and likewise to eliminate our own comfort. We can say no to scorched babies in Iraq. We can refuse to drive at all and refuse to participate in a dead society gone shopping. We can quit being so addicted to the rationality and embrace the spirit. Rationality simply turns back on itself like a mobius strip. Too much thinking, too much cleverness on the monkey's part leads it to believe it can come up with rational solutions for what ration itself hath wrought.

Contemptuous
07-08-07, 07:24 PM
Great post Rajiv.42

spunky
07-14-07, 11:25 PM
Am I a doomer. I never worried too much about nukes taking me out and lived and worked in Europe (and the Middle East) during the late 70's and 80's when The Red Brigade and such things were happening. Was hauled out of my car one night by several guys with AK 47's and several times faced people who did not like me because I was an American.

However, the mathematical side of me tell me this is an unsustainable trend. People ship material stuff to us and we ship them paper and it seems to be going faster and faster. Debt has always been unsustainable in the past so why shouldn't it be in the future. Countries rise to the top and then topple. In 1928 (a mere 79) years ago we saw it happen, why should we be any different. Because we are stronger and smarter. As a whole I think we are weaker and dumber.

The real eye opener is when the lies to cover the problems become to blatant that anyone with half of a brain must see them.

Things change! I also have always recognized that it takes longer than you think it will. Why is that? Because there are strong entrenched positions which will not give up their power easily. They will be drug from their position with their fingers clawing at their thick persian carpets. They will fight it kicking and screaming when anyone with a brain will see that it should change. Always has been this way and it always will be.


Very nice; we great minds do think alike , no:D

Nice article; it is always better to be a bear

FRED
11-16-07, 02:28 PM
We are posting this story for two reasons. One, we have repeatedly told our readers that a 1918 type flu pandemic is unlikely in modern times. However, we don't want our readers to mistake our optimism for complacency. Two, this news is potentially serious and we want our readers to be aware.

Part of the scientific community that is focused on preventing a flu pandemic believes that by focusing on bird flu the scientific community is looking in the wrong place. Some virologists believe that the next viral pandemic may in fact be caused by a virus that mutates from a cold virus. If so, the impact can be quite serious as there are no vaccines and the cold virus is very communicable.

Please be especially careful this cold season and watch this story closely.

Thank you.

Fred



Resurgent Severe Cold Virus Spreading In US With Fatalities (http://www.medicalnewstoday.com/articles/89096.php)
16 Nov 2007 - 9:00 PST (medicalnewstoday.com)

An uncommon, but resurgent and highly virulent strain of the cold virus, called adenovirus type 14 or Ad14, is spreading in the US and is causing severe and sometimes fatal respiratory illness, even in healthy adults.

The virus has killed 10 people since May last year, when a 12 day old baby girl died from it in New York City. Between March and June 2007, there have been 140 confirmed cases of Ad14 in Oregon, Texas and Washington, according to the US Centers for Disease Control and Prevention (CDC).

53 of the patients (38 per cent) had to be hospitalized, 24 of whom were admitted to intensive care, of whom 9 patients died.

The CDC said that the strain of Ad14 in all four states were genetically identical, but different to the one that spread in 1955, suggesting this is a new strain of an old virus. They have not found any link between the New York case and the outbreaks in the other four states.

Also, an investigation by the New York City Department of Health and Mental Hygiene has not found any other cases of Ad14 illnesses in the area.

Investigations have been carried out by state and city health officials, the CDC and the US Air Force. The CDC's Morbidity and Mortality Weekly Report (MMWR) for 16th November summarizes their findings.

The CDC warns that state and local health professionals should be alert to the possibility that this virus will cause further outbreaks.

In Oregon the cases were first noticed when a hospital doctor reported several patients admitted with severe pneuomonia between early March and early April 2007. 15 of the 17 patients were confirmed by lab tests done by the CDC as being infected with Ad14.

Investigations by Oregon state health officials traced 68 people who tested positive for adenovirus between 1st November 2006 and 30th April 2007. Of these, 50 were available for further tests, from which there emerged 31 cases of Ad14, of which 30 were reviewed further. Of the 30 patients, 22 were male, and the age range was 2 weeks to 82 years. 7 (23 per cent) died from severe pneumonia.

The authorities were not able to establish a link in the hospitals or the community to explain how Ad14 was spread among the patients.

In Washington, the case of four residents in a residential care facility was brought to the attention of state health officials in mid-May this year. They were in hospital suffering from pneumonia of unknown origin. The patients, three of whom were female, were aged between 40 and 62, and all four smoked. One had AIDS and the others had chronic obstructive pulmonary disease.

The initial symptoms were cough, fever, shortness of breath, and they started towards the end of April. Three patients required intensive care and assisted breathing for severe pneumonia. The patient with AIDS died and the others recovered. Three of the patients were confirmed by the CDC as having been infected with Ad14 (isolate was not available for the fourth). No other cases of Ad14 were identified at the residential home.

In Texas, during an investigation conducted between February and June this year, over 100 cases of Ad14 were found among 423 cases of respiratory illness among military trainees at Lackland Air Force Base (LAFB). Before this outbreak there was one case in May last year on the base.

A total of 27 patients were admitted to hospital with pneumonia, 5 of whom had to have intensive care. One patient died. Of the 16 for whom throat swabs were collected, including the 5 in intensive care, all tested positive for Ad14. Of 218 healthcare workers who worked at the hospitals the Ad14 patients had been treated at, six tested positive for Ad14, five of whom had had direct contact with the infected patients.

Adenoviruses were first identified in the 1950s and cause a broad range of conditions from conjunctivitis, upper respiratory illness, through pneumonia, and gastrointestinal disease. They usually infect vulnerable patients such as the very young or the very old, or those with underlying medical conditions.

It is unusual for adenoviruses to cause hospitalization, and it is rare for healthy people to die from them.

Ad14 appears to be resurging in the US, after lying low for some 50 or so years. An outbreak occurred among military recruits in Europe in 1969, and more recently, in 2001-2002, Ad14 was linked to an outbreak of respiratory adenoviral infections in the pediatric ward of a Taiwan hospital.

Jim Nickerson
11-16-07, 05:01 PM
Fred,

Worthwhile post, thanks for putting it up.

Rajiv
04-17-08, 12:48 AM
A good article at The Archdruid Report - The Specialization Trap (http://thearchdruidreport.blogspot.com/2008/04/specialization-trap.html)


Few ideas are quite as unpopular nowadays as the suggestion that the fate of past civilizations has something to teach us about the likely destiny of our own. This lack of enthusiasm for the lessons of history pervades contemporary culture; what makes this interesting is that it is also among the most fruitful sources of disaster in the modern world. The ongoing implosion of real estate prices around the industrial world is simply one example out of many.

Long before the phrase “condo flipper” entered common usage, one thing should have been obvious: anybody who claims that an asset class can keep on increasing in value forever is shoveling smoke. From the 17th century Dutch tulip mania to the internet bubble of the late 1990s, financial history is littered with the blackened ruins of speculative booms that crashed and burned while in hot pursuit of the fantasy of endless appreciation. None of this kept investors in the last few years from betting the future on the belief that this time was different, and real estate prices would keep rising forever – or from lambasting those few spoilsports who suggested that what went up would inevitably, in due time, come down.

Those of us who insist on reading today’s headlines about peak oil in the light of history risk a similar reaction. Still, it’s a risk worth taking. The logic that insists that while all other civilizations have risen and fallen, ours will just keep rising forever, differs not a whit from the logic underlying the late real estate bubble; the only difference is one of scale. It’s for this reason among others that I try to keep up with scholarship on the decline and fall of past civilizations, and that was what brought me to Bryan Ward-Perkins’ valuable book The Fall of Rome and the End of Civilization (Oxford UP, 2005).

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One of the tools he uses to document the real scale and impact of the western empire’s collapse is the humble but eloquent voice of pottery. The Roman pottery industry was huge, capable, and highly centralized, churning out fine tableware, storage vessels, roof tiles, and many other goods in such vast quantities that archeologists across Roman Europe struggle to cope with the fragments today. The pottery works at La Graufesenque in what is now southern France and was then the province of Gallia Narbonense, for instance, shipped exquisite products throughout the western empire, and beyond it – goods bearing the La Graufesenque stamp have been found in Denmark and eastern Germany. Good pottery was so cheap and widely available that even rural farm families could afford elegant tableware, sturdy cooking pots, and watertight roof tiles.

Rome’s fall changed all this. When archeologists uncovered the grave of a sixth-century Saxon king at Sutton Hoo in eastern Britain, for example, the pottery found among the grave goods told an astonishing tale of technical collapse. Had it been made in fourth century Britain, the Sutton Hoo pottery would have been unusually crude for a peasant farmhouse; two centuries later, it sat on the table of a king. What’s more, much of it had to be imported, because so simple a tool as a potter’s wheel dropped entirely out of use in post-Roman Britain, as part of a cascading collapse that took Britain down to levels of economic and social complexity not seen there since the subsistence crises of the middle Bronze Age more than a thousand years before.
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Cooking vessels, food containers, and roofing that keeps the rain out, after all, are basic to any form of settled life. An agricultural society that cannot produce them is impoverished by any definition; an agricultural society that had the ability to produce them, and loses it, has clearly undergone an appalling decline.

What happened to put such obviously useful items out of the reach of the survivors of Rome’s collapse? As Ward-Perkins shows, the post-Roman economic collapse had its roots in the very sophistication and specialization that made the Roman economy so efficient. Pottery, again, makes an excellent example of the wider process. Huge pottery factories like the one at La Graufesenque, which used specialist labor to turn out quality goods in immense volume, could make a profit only by marketing their wares on a nearly continental scale, using sophisticated networks of transport and exchange to reach consumers all over the western empire who wanted pottery and had denarii to spend on it. The Roman world was rich, complex, and stable enough to support such networks – but the post-Roman world was not
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Trace any other economic specialty through the trajectory of the post-Roman world and the same pattern appears. Economic specialization and centralized production, the core strategies of Roman economic success, left Rome’s successor states with few choices and fewer resources in a world where local needs had to be met by local production. Caught in the trap of their own specialization, most parts of the western empire came out the other end of the process of decline far more impoverished and fragmented than they had been before the centralized Roman economy evolved in the first place.
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Map this same process onto the most likely future of industrial society, in turn, and the parallels have daunting implications. In modern industrial nations, the production and distribution of goods are far more centralized than anything Rome ever achieved. Nearly all workers at every level of the economy perform highly specialized niche jobs, most of which only function within the structure of a highly centralized, mechanized, and energy-intensive global economy, and many of which have no meaning or value at all outside that structure. If the structure falters, access to even the most basic goods and services could become a challenge very quickly.
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Contd. (http://thearchdruidreport.blogspot.com/2008/04/specialization-trap.html)

Spartacus
04-17-08, 12:54 AM
comparing civilizations is OK, but this ...

>>> The logic that insists that while all other civilizations have risen and fallen, ours will just keep rising forever, differs not a whit from the logic underlying the late real estate bubble; the only difference is one of scale.

is the fallacy of composition.


A good article at The Archdruid Report - The Specialization Trap (http://thearchdruidreport.blogspot.com/2008/04/specialization-trap.html)

Rajiv
04-17-08, 01:16 AM
I don't see that as a fallacy of composition

Fallacy of Composition (http://www.nizkor.org/features/fallacies/composition.html):

The fallacy of Composition is committed when a conclusion is drawn about a whole based on the features of its constituents when, in fact, no justification provided for the inference. There are actually two types of this fallacy, both of which are known by the same name (because of the high degree of similarity).

The first type of fallacy of Composition arises when a person reasons from the characteristics of individual members of a class or group to a conclusion regarding the characteristics of the entire class or group (taken as a whole). More formally, the "reasoning" would look something like this.

Individual F things have characteristics A, B, C, etc.
Therefore, the (whole) class of F things has characteristics A, B, C, etc.

The second type of fallacy of Composition is committed when it is concluded that what is true of the parts of a whole must be true of the whole without there being adequate justification for the claim. More formally, the line of "reasoning" would be as follows:

The parts of the whole X have characteristics A, B, C, etc.
Therefore the whole X must have characteristics A, B, C.

I don't see either of these cases applying in the above argument

Contemptuous
04-17-08, 02:29 AM
Rajiv -

Here's another thought for you to wrestle with. The article extract you posted above beautifully illustrates the catastrophic collapse of civilisation once the empire collapsed. But much of what you write of our contemporary era implies a critique of the excesses of modern empire. Of course it would be reasonable to conclude excesses have occurred to all empires.

What then do you envision is going to be ushered in as the brief-lived modern "Anglo-American Empire" collapses. You might reasonably expect to get a Balkanization of power throughout the world, which you envision as a good thing - escape from hegemony - but how is that consistent with the hopeless decline your posted article describes once the "rule of the Roman denarius" and the "Pax Romana" were decimated?

It would appear clear, that despotic empires are (paradoxically) also conducive to international peace? And if so, can we conversely conclude that disintegration of empire is conducive to an effect which is antithetical to international peace? I detect an inconsistency in the problems you warn about - chaos after the fall of Rome, yet emancipation after the fall of the UK/US 200 year "Pax Anglo-Saxonica"?

Rajiv
04-17-08, 10:50 AM
Lukester,

It is indeed a conundrum. However the article was more a warning, that we are in a precarious place if the chain of supply were to be interrupted.

However, I don't see this as an issue of empire -- but rather something that may happen as shortages of commodities develop - leading to civil unrest -- and hence disruption of trade -- and hence a collapse of the chain of supply. In this scenario, specialization becomes a trap -- non local production of essential commodities (read food, clothing) is one of the major problems that I see.

See again my post (http://itulip.com/forums/showthread.php?p=33481#post33481) on the Bengal famine and also GRG55s post (http://itulip.com/forums/showpost.php?p=19092&postcount=1)

Jeff
04-17-08, 11:58 AM
Getting back to the topic, recognizing that bad things can happen gives an individual, especially as an investor, an edge over the vast majority. Similarly, seeing a good outcome when the majority think everything is going to hell can be useful and profitable.

I hired a wealth management firm based in large part on the answer to the question, "How would your proposed investments perform through the collapse of the US government and economy." This question had generated nothing but dumb looks and sputtering from Goldman Sachs, Banc of America, Merrill and a boatload of others. Everytime some moron on TV says, "In a unimaginable development..." I want to put a brick through the screen. It's not Doomerism to have a vivid imagination.

I know for a fact that the "smart guys" on Wall Street, including Goldman told WorldCom shareholder to NOT sell right to the very end. I pulled my last dime out of Goldman when they tried to talk me out of selling Cisco stock at $62.00 in June 2000 that'd I'd paid $0.01 for. (Really. Ask EJ.)

Nothing, but nothing should be unimaginable. The NASDAQ really is at less than half of what is was 8 years ago. I got death threats for calling it over in a Wshington Post article (http://www.osborncapital.com/ocdocs/press/articles/00-12-10wposborn.html) in December 2000.

alcyone
04-17-08, 03:23 PM
The important question to be asking is: “What is the difference between a Doomer and a SEER?”
The answer is of course a huge difference in CONSCIOUSNESS. To the Seer, what we are witnessing today are the predictable agonies of end-stage capitalism. The really astute financial bloggers like Eric Janszen, Nourel Roubini and Mish Shedlock are in reality, financial pathologists performing a real-time autopsy of what used to be known as Western Capitalism. It is like witnessing a slow-motion train wreck whose symptomology is surprisingly similar to Cancer. Laissez-faire free enterprise systems that used to function harmoniously in earlier centuries have been invaded by a parasitic pathogen that contributes nothing to the well-being of the whole but survives and multiplies exponentially by “gaming the system” and siphoning off its precious energy like a malignant tumor. (see: Hedge-Fund Managers Score Biggest Ever Payday - http://www.huffingtonpost.com/2008/04/16/hedge-fund-managers-score_n_96912.html)
We see this in the financial markets, as well as the larger phenomenon known as Corporate Globalization, the endgame of malignant capitalism. In its present de-regulated form it has become an unsustainable system of exploitation, which, like cancer, creates a terminal stress on its host organism. In economic terms, corporate privatization has created a huge disparity of power through the concentration of wealth and control among a small and elite upper class who can only maintain their position and ever-increasing quarterly profits by exploiting the working classes, polluting the environment and recklessly depleting natural resources that are essential to human survival. Like Cancer, this brand of metastatic growth cannot be reformed and owing to the insidious web of collusion and greed which has metastasized into the organs of government, finance, law, and media, it cannot be regulated. It can only destroy itself and die.
The multitude of bloggers who are presently analyzing the death throes of Capitalism do so with no understanding of the larger picture. This gives many of them a false sense of hope for the patient. But seen within the context of a larger more comprehensive vision, this “perfect storm” that has brought Wall Street to its knees has been prefigured in the writings of many prophets and seers. The most prescient of these, Patrizia Norelli-Bachelet, wrote in her book, The Hidden Manna:
“The Whore of Babylon is the consciousness of Materialism that reigns upon the Earth. She is the Whore that usurps the energies which should be channeled upward toward the higher ranges of consciousness. Yet the Earth has fallen under the sway of her power. The Great Whore is described as sitting upon many waters... a symbol of consciousness. It is she with whom the kings of the Earth have committed fornication. The kings are the political leaders of today and the global corporate oligarchs. They lie with the Whore collaborating in her pathological materialism. All during her rise, the world has slept, drunk with her wine and displaying her wealth. Babylon of our time is Sex and Money. She is the great scourge of our time which sucks dry the resources of the planet to satisfy the greed that is carrying the world to its doom. But the hour of God draws near. Babylon the fornicating whore, the queen of money power must soon collapse under the weight of her wicked and destructive accumulated energy. And when the moment of her collapse arrives, it is sudden and quick. Up to the end she will appear triumphantly powerful, because she cannot see her own condition. The most prominent characteristic of the moment of her downfall is the apparent increase of her splendor and glory. The moment she is most secure in her victory is the moment of her furious collapse, “therefore shall her plagues come in one day…” Alas, alas, that great city Babylon, that mighty city! (she is also Rome) For in one hour is thy judgment come.” Patrizia Norelli-Bachelet – The Hidden Manna - St. John’s Revlation.

This may sound suspiciously apocalyptic, but Ms. Norelli-Bachelet’s vision falls within the purview of a higher logic that gives the seer their ability to know the future in the symbols of the present. To paraphrase the renown psychologist, Carl G. Jung :
…when an unsustainable contradiction is not made conscious, the conditions of its denouement appear outside ourselves as “fate”. The world must perforce act out the conflict in what appears to be sudden and inexplicable events.
The appearance of these unsuspected fateful events have become known in financial circles as “Black Swans” or Black Swan Events which closely parallel the principles and logic of Chaos Theory. In prophetic terms they follow a build-up of pathological contradictions such as described in the Srimad Bhagavatam:
“When society reaches a stage where property confers rank, wealth becomes the only source of virtue, and falsehood, the source of success in life, and when rulers become plunderers… and society reaches the lowest point in its moral decline...”
…Then cometh the “Black Swan”… Reliable systems build up disequilibrium to a point of critical mass where a single event can bring about a suddenly collapse.
This cannot come as a great surprise to anyone who has taken an unvarnished look at the state of the US economy, our trade deficit, the collapse of the dollar, $600 trillion dollars in derivative debt, Peak Oil, Food shortages, $115 dollar per bbl oil, the mortgage and real estate crisis, the Iraq war, and the list goes on and on.
For those whose vision is clear, the end of Capitalism is a fait accompli, don’t waste your time trying to fix it. Get on with the next thing.
Alcyone

makkie
12-01-08, 10:39 PM
Brilliant! I feel at home ? Thank you iTulip ! :p

walenk
12-02-08, 12:10 AM
We'll meet again
Don't know where, don't know when
But I'm sure we'll meet again some sunny day :cool:

metalman
12-02-08, 02:52 AM
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pqmaxon
12-04-08, 07:44 PM
Where can one find EJ's recommendation last November to get into cash and gold.
Paul Maxon

FRED
12-05-08, 01:38 AM
Where can one find EJ's recommendation last November to get into cash and gold.
Paul Maxon

iTulip made the case to get into gold August 2001 and has yet to issue a "sell" opinion: Questioning Fashionable Financial Advice (http://www.itulip.com/gold.htm)
Gold - September 2001

Other than gold, the only other investment position that iTulip has taken over the years are Treasury bonds via Treasury Direct, also mentioned in the August 2001 article about gold, and CDs.

iTulip has not recommended any stock market exposure since iTulip was founded in Nov. 1998.

See also:

Time, at last, to short the market (http://itulip.com/forums/showthread.php?t=2774)
Time at last to short commercial real estate (http://itulip.com/forums/showthread.php?t=4307)

Polish_Silver
10-31-13, 01:35 PM
Great article, EJ.

The better doomers are not "wrong" just premature. In fact, if Volcker is correct, Brown came near to being right in the timing, as well.

Nuclear war was a real danger. Didn't happen, but you'd be crazy not to think it was a risk. New information about the Cuban missile crisis shows how close we came. If the Soviet sub commander had not turned back, we might well have tested the duck and cover empirically.
(At a certain distance from atomic blast, a sheet of paper will protect you from skin burns. )

Neither the US nor the SU had perfect information about the weapons of the other side, or the willingness of the other side to take risks.

shiny!
10-31-13, 03:42 PM
I'm not a doomer because I don't believe the worst will happen. But I believe the worst, or the "bad enough to be truly inconvenient and/or dangerous", might happen. So I try to be prepared for everything because I don't know how this will all play out over the course of my lifetime.

I refuse to face TEOTWAWKI without toilet paper.

Polish_Silver
11-01-13, 10:30 AM
Doomers are crisis mongers. So we need a word for people who don't believe any crisis will ever happen.
I'll call them "complacents".


Two of my friends are complacents. These are people who think the national debt is no big deal, that leveraged lending is good because it stimulates the economy, and Peak oil is nothing to worry about.


I don't think either of them recognized the stock bubble or the housing bubble until they popped.

Polish_Silver
11-02-13, 01:38 PM
The newsweek (http://denisdutton.com/cooling_world.htm)article:

http://denisdutton.com/cooling_world.htm

Friggin De ja Vu:


There are ominous signs that the Earth’s weather patterns have begun to change dramatically and that these changes may portend a drastic decline in food production – with serious political implications for just about every nation on Earth. The drop in food output could begin quite soon, perhaps only 10 years from now. The regions destined to feel its impact are the great wheat-producing lands of Canada and the U.S.S.R. in the North, along with a number of marginally self-sufficient tropical areas – parts of India, Pakistan, Bangladesh, Indochina and Indonesia – where the growing season is dependent upon the rains brought by the monsoon.

The evidence in support of these predictions has now begun to accumulate so massively that meteorologists are hard-pressed to keep up with it.

Computers now are a lot better, so a similar mistake could never happen again.

Polish_Silver
11-02-13, 01:52 PM
Like others, I said it was futile to re-arrange those loans. But behind the scenes, several New York bankers and Reagan-era Treasury officials quietly negotiated with the Latin American debtors, offering to reschedule their debts at lower interest rates, in exchange for some political concessions – such as free elections – which resulted in the gradual forced retirement of several military dictators. Throughout the mid-1980s, military juntas were replaced by democracies, the last one by a dramatic invasion of Panama in 1989.



Is this correct? If so people should be more aware of it.

BadJuju
02-20-14, 12:29 AM
I'm a Poomer. Poom all the time, baby.