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Kicking the Can, As Expected

The recent deal in Congress solves nothing, resolves nothing
Thursday, October 17, 2013, 4:23 PM

I didn't get too worked up analyzing what might happen in the event of a U.S. default on its debt, because I knew in my heart of hearts that such a move would have required some serious political spine.

This is something that is completely lacking in both parties right now, so I didn't worry about any other outcome besides an eleventh-hour agreement to kick the can a bit further down the road. » Read more

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Getting to a Future That Has a Future

It all depends on how well we manage contraction
Tuesday, October 15, 2013, 8:18 PM

Executive Summary

  • The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
  • How food production will need to evolve if we are to continue to feed ourselves in the future
  • How pursuing "growth" is wasting us precious time and energy
  • Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..

If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.

The problem of growth in its current context is first a problem of language, but  do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.

Three Fundamental Activities

I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:

  1. re-localizing
  2. downscaling, and
  3. de-complexifying.

The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.

I will describe the particulars in a moment, but first the point must be made that... » Read more

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Off the Cuff: Yellin' About the Debt Ceiling

The future is looking like 'more of the same'
Thursday, October 10, 2013, 3:36 AM

In this week's Off the Cuff podcast, Chris and Adam discuss:

  • The dollar's date with destiny
    • Growing certainty in a currency collapse
  • The debt-ceiling diversion
    • It will get raised, despite the posturing
  • The appointment of Janet Yellen
    • Confirms the plan is "keep trying more of the same"
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The New Education Models Offering New Hope

More effective, cheaper, faster & possible today
Thursday, October 3, 2013, 6:09 PM

Executive Summary

  • The 4 higher education solutions of the Nearly Free University
  • How higher education can be both cheaper & better than today's alternatives
  • The catalytic roles played by both networking & network theory
  • Making decisions for yourself/your children in this new emerging education spectrum

If you have not yet read The (Needed) Revolution Emerging in Education, available free to all readers, please click here to read it first.

In Part I, we surveyed the foundations of Higher Education and its obsolete Factory Model.  We described its predatory reliance on student loans to feed its bloated cost structure and its failure to provide students with the skills needed in the economy of the 2010s; i.e., the emerging economy.

In essence, the foundation of higher education has been completely upended.  Knowledge and instruction, once costly and scarce, are now abundant and nearly free. The only pricing power left to Higher Education cartel is the artificial scarcity of credentials.

That is not the power of a productive system; it is the power of a predatory system.

The Four Higher Education Solutions of the Nearly Free University

There are four broad technology-enabled solutions that would free higher education from its current cartel limitations on opportunities and accreditation... » Read more

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Off the Cuff: The Government Shutdown is a "Fiscal Suicide Mission"

A "one-size-hurts-all" outcome
Wednesday, October 2, 2013, 12:00 AM

In this week's Off the Cuff podcast, Chris and Utah Representative Ken Ivory discuss:

  • Impact of the Government Shutdown
    • A "one-size-hurts-all" policy
  • No one is stepping up to resolve the fundamental issues
    • "The system is broken"
  • States need to "own the problem"
    • Many are waking up to this reality
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Peak 'Cheap' Oil: Shale Oil Proves Peak Oil Is Indeed Upon Us

We wouldn't drill for it if the cheap stuff were still here
Sunday, September 29, 2013, 10:40 PM

Ever the contrarian, I have been quite skeptical of the many breathless claims being made by wide swaths of the media about how a new energy bonanza is going to overtake the U.S. and eventually the world.  The subject, of course, is the new shale plays in both natural gas and oil.

While these plays are in special cases quite extraordinary, and the technology is just brilliant, many of the more exuberant claims made in the past about the potential contributions of these plays are now being dialed back. » Read more

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Off the Cuff: The Social Contract Is Fraying

It favors the government over the governed
Thursday, September 26, 2013, 2:20 PM

In this week's Off the Cuff podcast, Chris and Charles discuss:

  • Our Social Contract is Broken
    • Has been re-written to benefit those in power
  • Trust is Eroding
    • Faith in institutions like our justice & money systems is waning
  • New Models are Needed
    • Starting with education
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Off the Cuff: Bernanke Spikes the Punchbowl

When prudence would dictate he take it away
Thursday, September 19, 2013, 11:18 AM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • The Fed's Fakeout
    • No taper for you!!
  • Happy days are here again
    • Markets everywhere party onward but shouldn't they do the opposite?
  • Precious metals popping
    • Dollar is down and gold is way up today
  • Investing Outlook
    • Is time to just start dancing to the Fed's tune?
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Off the Cuff: Playing a Bad Hand

The game is rigged & the deck is stacked
Thursday, September 12, 2013, 12:04 PM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Sanity on Syria?
    • The rush to war may be slowing down
  • Markets a-bubblin'
    • Irrational valuations everywhere
  • Japan's woes
    • Bug, meet windshield
  • The disability disaster
    • The new permanent form of welfare

This week, Chris and Mish look at the sorry cards on the table and wonder why anyone wants to play this game.

Stock market valuations are back to non-sensical levels. Even members of the Fed are beginning to admit that their liquidity policies are creating an ongoing stream of asset valuation bubbles. » Read more

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We're All Turning Japanese

Japan is the proxy for our future
Tuesday, September 10, 2013, 1:40 PM

Executive Summary

  • As goes Japan's efforts to rescue it's economy, so will go the U.S. and E.U.
  • Japan's options:
    • Outsource its manufacturing base
    • Replace as much human labor with automation as it can
    • Rush to trade its depreciating currency for hard assets around the world
  • What Japan is telling us about the Keynesian endpoint

If you have not yet read Part I: Abenomics' Dismal Anniversary, available free to all readers, please click here to read it first.

Japan Is Reflecting the Future of Western Economies

While many observers continue to follow Europe as the proxy for post-growth dynamics in the OECD, it's actually Japan that merits the closest analysis.

Much farther along in its post-growth phase, bloated with government debt and having tried a number of big-bang initiatives over the decades, Japan not the U.S. or Europe is leading the way. The country has never really recovered from the gigantic property and stock bubble over twenty years ago.

As proof, just consider the biggest trading story of the past 12 months. Was it the Federal Reserve's intention to taper? How about the chaos in emerging market currencies in countries like India and Indonesia? Or perhaps the continued economic depression in peripheral Europe, as countries like Spain, Portugal, and Greece re-run the 1930s, with mass unemployment and people burning wood from forests to say warm? No, not even such dramatic suffering in Europe was enough to move markets or the EUR currency much this past year.

Instead, it was Abenomics and the front-running (and then chasing) of wildly huge moves in both the Nikkei and JPY that helped drive liquidity and speculative juices across all markets. It is not a coincidence that the peak of this frenzy in May heralded the peak in many markets.

But Japan has more than a financial problem. Despite the hand-wringing about Japan's debt, the world has ignored for some time now Japan's debt-to-GDP, GDP on an absolute basis, and Japan's low cost of capital. Japan borrows. Japan prints. Japan devalues. But the world doesn't care.

An issue the world may finally begin to care about, however, is that Japan has failed to launch itself out of deflation and is making very little progress in its struggle now. Indeed, Japan has a demographics problem and a resources problem that far outweigh its financial problems. To this point, instead of launching into recovery, Japan is running with the resources Red Queen, as every step of its currency devaluation is met with rising costs to import the raw materials Japan uses to make its goods... » Read more