Jay, your uplifting message is early. I recommend for you to get you brain looked to, and be supremely cautious, preserve what you have as others insist on tempting fate and stand to lose what they had not earned in the first place. I recommend that you do not devote any serious money to playing a game against nature and gravity. I recommend that you figure out how to survive and come out fighting another day, when the roulette wheels have finally stopped turning and die stopped tumbling, when the fire has abated, and the smoke has cleared.
It is much easier for me to take apart your false message of hope than it is for you to construct it. Renaissance II may indeed happen, even as you described, but not now, not immediately, not before millions lose their jobs, wealth and hope. Finance has no mercy, no humanity, and its laws are immutable.
I recommend that you figure out a way to run, hide, survive and wait for the inevitable spring after a long winter. Here are my reasons:
(a) <<The world is mostly at peace and at its productive best>>
War and Peace has little to do with wealth creation, as the occurrences of both have been helpful, since the Roman times and before;
(b) <<Scientific discoveries and implementations are at their fastest pace, ever>>
And thus the destruction of franchises, monopolies, and entrenched wealth are occurring at ever-faster pace;
(c) <<Governments everywhere are in a proactive interventionist mode, ready to rescue the financial system from any and all danger, quickly, without the slightest hesitation, always>>
Never a good thing, especially when governments are typically comprised of very mediocre folks gunning for each other;
(d) <<Governments everywhere, in the aggregate, are at their most responsive than at any other historic period>>
Responsive to crowds is not conducive for wealth creation and preservation;
(e) <<The global middle class is at its largest, working, forming families, building for the future>>
This could have been said for each and every historic period and has nothing to do with anything;
(f) <<The comparison to the ancient period 1929, and the comparisons of present day America with 1980s Japan are misleading>>
You are right, Japan worked more (hours + robots), saved more (30+%), individuals played the market less (<25%), without the help of leverage and Internet, and what debt there was, was cheap, fueled by export earned liquidity, not by depending on foreigners’ largesse;
(g) <<America is in the hands of a solidarity leadership, in both the executive and legislature branches of the government, leading the way>>
And therefore? All the easier to find a scapegoat during the coming elections;
(h) <<Russia is no longer in free fall, slowly reviving after the cataclysmic fall of the empire>>
Rome’s fall, as Japan’s, took eons. Many entities pretended, but wealth vaporized for all but the very few. History is not a news clip on CNN;
(i) <<Japan has bottomed, having given back all that was unearned, readying for another charge upward, fueled by liquidity level rivaling any historic period>>
Rome bottomed eventually, but even in its last days, exacted victims. Japan and its liquidity have not yet done its work. The original liquidity bubble, born of the ‘70s oil crisis and resulting aggregation of funds, forced the US and Japan to seek solutions (recycling), thus generating a conduit for the bubble to move from the oil basins back to centers of production. The last twenty years merely witnessed the same bubble being passed back and forth between the two main centers of physical production, gathering more strength with each pass. Ask yourself, which good folks paid the most outrageous sums for US real estate (hint, not the US folks). Let’s hope there is one more pass to go around.
When Japan eventually (sometimes I think “if” rather than “when”), the recovery may be led by massive inflation hereto unseen by history, as the liquid solution of old cause new problems for the future. History is a connected whole, not a series of discrete events.
(j) <<China is undergoing the greatest capitalist revolution, ever>>
And thus the liquidity bubble is passed again, try stalking and catching it, via any vehicle at our disposal, and leave before the riot control arrives on the scene;
(k) <<Europe is on the verge of social, monetary and political unification, gathering momentum for Renaissance II>>
And so much depends on so poorly designed an experiment;
(l) <<Energy costs, adjusted for inflation is just off historic lows, with plenty of supplies about to get on stream>>
The jury is still out on how not dependent we all are on this obviously limited resource;
(m) <<Information cost, for gathering, transmission, storage and analysis, after the binge of the last 60 months, is dropping toward zero>>
You are trying to make a virtual out of a debacle;
(n) <<Network effect, on a global scale, is transforming planet earth into one intelligent organism, solving difficult problems and finding best solutions at the fastest pace>> plus
(o) <<The downside in the financial system is clearly defined and delineated, unlike the upside, as we cannot go to zero>>;
(p) <<The financial system, being a human construct, can be fixed via political dictation and legislative fiat – at worst case, we simply start new>>;
The world depends on one great big untested construct of systems, sub-systems, components, sub-components, all linked, all functioning, each designed for its own little piece of the universe, for its own era, with its designed in but not transparent tolerances. This is what we are all depending on. Call it Space Ship Wall Street, and get on for a ride.
(q) <<Many of the leading companies pre-crisis will be leading companies post-crisis, simply due to their organization, know-how and know-who, but playing in a much more empty environment>>; and
(r) <<By selecting a basket of leading companies share, buy, lock away, and get back to work, each of us will be able to look back on this period as a blessing of generations.>>
And so why not simply wait for a while, or at least ease up on the warp drive accelerator, or throw up the energy shield?
<<In summary, the world is connected, at peace, orderly, vibrant, and on the verge of a new age of exploration and exploitation, and this time, gravity will not hold us back, for we are reaching for the stars. Renaissance II. Should we give up on hope, we cease to be responsible to families, friends and ourselves.>>
Wrong. In summary, the world is connected, alive, complicated, unpredictable, and always on the verge of undiscovered disasters. We are at a critical juncture now, where we must make a judgment on risk vs. reward, based on all that we have learned, starting with the physical laws, mathematical constructs, probabilities, thermodynamics, random motion, and psychology. The road ahead is not clear, the dangers fatal. We can call on history to guide us, and history did not end in 1992.
Renaissance II will happen, but to participate to the fullest, you have to survive first the interim dark ages.
Chugs, Jay |
