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This Is The Turning Point

The driving trends of the past decade are now reversing
Friday, April 6, 2018, 10:32 PM

The saying "the worm has turned" refers to the moment when the downtrodden have finally had enough, and turn on their powerful oppressors.

The worms have finally turned against the privileged elites -- who have benefited so greatly from globalization, corruption, central bank stimulus and the profiteering of state-enforced cartels. It doesn’t matter as much as the punditry assumes whether they are turning Left or Right; the important thing is that the powerless have finally started challenging their privileged overlords.

Though the Powers That Be will attempt to placate or suppress the Revolt of the Powerless, the genies of political disunity and social disorder cannot be put back in the bottle. It took a generation of rising inequality, corruption and the erosion of opportunity to create a society of the protected (the haves) and the unprotected (the have-nots), and rubber-stamping more regulations and distributing Universal Basic Income (UBI) will not rebalance a system that is irrevocably out of balance.

But the rise of resistance, as yet nascent, is only half the story: economic trends and cycles are turning as well, and even if the worms remain passively underground, these reversals will disrupt the status quo. The dominant narrative--the rightness, goodness and sustainability of endless growth of consumption and debt--will unravel, and the internal contradictions of this New Gilded Age (widening wealth/income/power inequality) will finally burst through the thin façade of stability that’s been patched together over the past nine years of “recovery.”

Eight Key Trends/Cycles Are Turning

Here’s the thing about trends and cycles: when they inevitably lose altitude or reverse, we rush around trying to identify the cause. All sorts of theories are put forth, but as a general rule, it rarely boils down to one dynamic.

Consider the decline and fall of the Western Roman Empire. Efforts to identify the cause go back hundreds of years, and include everything from barbarian invasions to the use of lead pipes to deliver water.

A new book, The Fate of Rome: Climate, Disease, and the End of an Empire, pins a significant part of the responsibility on climate change and pandemic diseases—system-wide dynamics that slowly sapped Rome’s vigor, food supplies, capital and labor force.  Not only that, but cooling weather patterns in Eurasia may have been behind the westward movement of the mobile tribes (the Huns and Mongolians) that pushed existing tribes on Rome’s borders into Roman territories—the so-called Barbarian Invasions.

The point here is that systemic trends and cycles are often causally connected and tend to reinforce each other. This is how a stable, wealthy and resilient society gets hollowed out: trends end and cycles reverse, and forces that added stability, capital and resilience when they were working together are slowly replaced by forces that erode the foundations of wealth and stability.

In the current era, eight interconnected trends/cycles are either reaching the end of their run or reversing:

  1. Central bank distortion/manipulation of markets.
  2. The business cycle of credit/debt expansion and contraction.
  3. The yield/interest rate cycle.
  4. The commodity cycle.
  5. The stock market cycle.
  6. Regulation.
  7. Globalization.
  8. Demographics.

Each of these would need a short book to do the topic even partial justice, but let’s summarize each trend/cycle.

Let’s stipulate that technology isn’t a cycle or a trend; its disruptions of existing sectors and institutions accelerate and decelerate over time, but it is woven inseparably into all the trends and cycles listed above.   That said, the emergence of some new technology doesn’t mean the business cycle will be repealed for all time; cycles and trends are influenced by Human Wetware V1.0, an OS developed between 100,000 and 160,000 years ago and still in Version One.

Resource depletion is another background to these trends and cycles: robots and drones will not restore depleted ground water or bring back ocean fisheries.

Central Bank Distortion / Manipulation of Markets

Minus the $21 trillion in central bank asset purchases and trillions more in liquidity/credit programs, would the global economy be growing and global markets be at nosebleed heights? We all know the answer is "no."

Central banks have engineered a "recovery" that looks real enough on the surface, but what are its foundations? Gamed statistics and manipulated markets—in other words, controlling not just the narrative but the information available to market participants.  To achieve the desired outcome—rising equity markets, near-zero bond yields and incentivizing the purchase of risk-on assets—central banks have distorted market information and mechanisms.

The returns on this coordinated distortion are diminishing.  The “buzz” from the initial injections has faded, and now that the monetary authorities are trying to wean the markets off of their drug, the markets have lost the ability to discover the price of assets, risk and capital on their own.

No wonder volatility is rising.

Flooding the economy with trillions in new stimulus worked wonders in the initial stage, but after 9 years, the unintended consequences are metastasizing.

Goosing asset valuations higher in service of “the wealth effect” has widened wealth/ income inequality, creating a New Gilded Age of a few haves and many have-nots. The benefits of the central bank punch bowl—near-zero interest rates, leverage and access to unlimited credit--are reserved for those few at the top of the wealth-power pyramid; very little of the stupendous wealth created out of thin air has trickled down to the bottom 95%.

The relentless rise in asset valuations has pushed homes out of reach of those living in desirable urban/suburban markets, and exposed buyers to the risks of an inevitable reversion to the mean, i.e. a collapse of bubble prices back to historical norms.

Capital is not incentivized to invest in productivity or communities for the long haul; the incentives are for stock buybacks and short-term leveraged speculative bets, forms of mal-investment that hollow out the productive real economy is favor of a momentum-driven financialization boom.

Much of the political resistance troubling the status quo can be traced directly to central bank policies that have exacerbated the New Gilded Age inequalities and excesses. If the central banks can’t find the will to reduce their distortions in service of the few, the political will of the many will do it for them.

The Business Cycle of Credit Expansion & Contraction

The business cycle is a basic structure of any economy based on credit and flows of capital seeking the highest available returns at the lowest available risk. In the expansion stage, households and enterprises borrow more money to boost production and satisfy unmet demand.  Speculators find opportunities in new enterprises and new markets.

In the contraction phase, all the inevitable excesses of freely available credit come home to roost. Marginal investments in new production fail to become profitable and go bust. Marginal household borrowers default, and speculators who bet the farm on momentum plays watch their capital evaporate like mist in Death Valley.

When too much income is being devoted to servicing existing debt, there’s no more net income available to support additional borrowing. Lenders facing losses due to defaults tighten lending standards, and credit—and thus the economy—contracts.

This cycle is an essential dynamic of capitalism.  Central banks have attempted to eliminate the contraction phase that acts as the immune system, washing out bad debt and marginal borrowers.  This has left the economy saddled with “zombie” corporations and debtors that would be liquidated if monetary policies weren’t enabling their feeble survival.

But even the most powerful central banks can’t force firms and individuals to borrow more money when it no longer makes sense to do so. And keeping zombie banks, corporations and households on life support weakens the financial system by piling up the equivalent of dead wood in the forest. When the inevitable conflagration of bad debt catches fire, many of the healthy trees will also be consumed in the flames.

The Yield / Interest Rate Cycle

Many observers are confident interest rates cannot rise due to the deflationary forces in play. Indeed, they predict a future decline in rates back to zero. Perhaps, but history suggests interest rates typically move in long cycles of roughly two or three decades. The current downtrend in rates dates back to 1981, which means the current trend is pushing 40 years. That’s stretching the historical boundaries.

As noted earlier, trends change and then we seek the causes. Interest rates are rising, and perhaps we need no explanation other than reversion to the mean.

The Commodity Cycle

Compared to the stock market (the S&P 500), commodities are at their cyclical lows. As to what happens next, we need only look at a single chart, courtesy of Incrementum AG:

The Stock Market Cycle

We’re implicitly being told that stock markets can loft higher forever, as long as central banks are pumping out the financial stimulus. But nothing goes up forever; valuations get stretched, marginal buyers disappear and doubts about the continuing efficacy of central bank distortions creep in.

The typical Bull Market has a leading sector.  Starting with the mass-market Industrial Revolution in the 19th century, leaders tend to be new industries: railroads, radio, computers, the Internet, etc., or existing industries that have been revolutionized by some innovation: for example, banks freed from regulatory oversight discovered subprime mortgages in the 2000s.

The current leaders—the so-called FAANG stocks—are getting tired.  The tech leaders have reached a scale where growth must slow; the expansion of Facebook from 100 million users to 1 billion was a 10-fold increase; the expansion from 1 billion to 2 billion, a double. Are there even another billion potential users with the bandwidth, devices and interest to join? How much additional revenue can be extracted by selling the data of increasingly marginal users?

The same issues of scale are sapping the growth of Apple, Google, et al.  What happens when Apple has already sold an iPhone to everyone with the means and interest to own one?

There is now political pushback against the quasi-monopolies of big tech. Politicians are being forced to “do something,” i.e. increase regulations, whether they accomplish the intended goal or not.

Valuations and profits are at the top of their respective cycles, the leaders are faltering, victims of their own dominance, and central banks are feeling pressured to reduce the punch bowl of free money for financiers.

Regulation

Democracy is no longer about solving real problems and being held accountable; it’s all about persuading the public that all is well, or distracting them with ginned up controversies. Incumbents get re-elected because they vacuum up enough campaign contributions to buy influence via the mass (corporate) media. They have little incentive to respond to voters, so they don’t.

What they can do is look like they’re doing something other than protecting the cartels and financiers that fund their permanent re-election campaigns. So they propose more regulations, most of which fail to achieve the desired results but succeed in burdening legitimate enterprises to the point of failure. Small enterprises simply fold up when the exhausted owners can no longer bear the burdens and corporations offshore everything that’s over-regulated.

The neoliberal ideology held that the many would benefit if regulations limiting enterprise were eased, and when done judiciously and with common sense, this has functioned as designed. But in the corrupt form of governance that dominates the global economy, regulatory capture means regulations protect cartels and insiders from competition.  Insiders have rigged the system so they can punish competitors and let their cronies off the hook.

The useful regulations protecting the many from the exploitation of the few are being buried by counter-productive “do something” regulations and regulatory moats that protect cartels and insiders.

Globalization

Global trade has a long history, stretching back to the Bronze Age (1500 B.C.). Like every other market, it expands and contracts as conditions change.  The emergence of China (and other nations) since the mid-1980s greatly expanded global trade and capital flows. This distributed new income and prosperity to hundreds of millions of people, and yet it also concentrated much of the newfound wealth in the hands of the few and left many behind.

Nothing goes up forever, not even globalization.  Those left behind are starting to wonder if the good of globalization outweighs the costs.

Demographics

If high-population-growth Africa is set aside, the world’s working age populace is perched on the precipice of decline while the populace of retirees is exploding, not just in the developed world but in the developing world.

Although many put their hopes on robots generating unlimited wealth that will support the elderly and free the working age populace from labor, the more likely prospect is an economy that cannot fulfill the promises made to retirees back when the worker-retiree ratio was 10-to-1 and not the present-day 2-to-1.

Chris Hamilton has written three excellent explorations of demographics that cover the basics. The bottom line is the trend of rapidly-expanding workforces and modest numbers of dependent retirees has reversed:

To underscore this point, chew on this sobering projection: in the US, for the first time ever, retirees will outnumber kids within just 20 years.

Time To Take Action

So as these 8 key trends and cycles change, what can we as individuals do?

In Part 2: 6 Essential Strategies For Prospering Through The Next Crisis, we detail specific steps to take with your money, your career, your lifestyle, your possessions and your mindset that will dramatically improve your odds of ending up on the winning side of these cycle reversals.

But time is of the essence. Preparation has value only if done in advance, and the turning point is upon us.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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39 Comments

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 626
Financial Perspective

what is most intriguing to me is analysis that ties the broad context of human experience together to create wide vision of future events.  I find the analysis here tends to stray towards a massive E for the economy, a small to mid size E for energy (mostly for its effect on economy), then a little bitty E for the environment.

It seems to me that much of our problem in this modern era is the financialization of our view of the human project.  So I was disappointed that so much of Charles list was consumed with financial items which is usually more broadly focused.  I find that a financial view tends more often towards a fear and adversarial based analysis.

Fear comes from a disconnection from reality, and to me financial  analysis is by its nature disassociative of the deeper issues of our relationship to each other and the world around us.

charleshughsmith's picture
charleshughsmith
Status: Platinum Member (Offline)
Joined: Aug 15 2010
Posts: 722
yours is a fair critique

Treebeard, yours is a fair critique IMO and I suppose it comes down to focus.  Chris has written thousands of words on energy, and many others have done a better job on the environment/ecological degradation/depletion than I can. As for the "squishy" topics of social and cultural change, I've written extensively about those processes here and in my books. 

So in focusing solely on cycles and trends, we set aside depletion and degradation as these are not cyclical phenomenon. They are systemic but not cyclical, at least as far I can see. That leaves the emotional/social structures of human civilization, many of which are responses to climate change (regardless of the source), depletion and degradation.

I probably should have made more explicit the causal connection between a low consumption DeGrowth lifestyle that requires few resources and "money" and the resultant reduction in energy-resources impact.  But I suspect the vast majority of people, here and elsewhere, focus on finance because that impacts their daily lives and choices more than the macro forces of depletion and degradation which are often abstractions when it comes to having the cash to pay this month's bills.  When currencies collapse as in Venezuela, virtually everything else goes by the wayside as people focus on getting food, medicine, etc. 

That human priorities boil down to finance is a sad statement about our global status quo, and it;s something I am trying to change in my own small way with my CLIME proposal (community labor integrated money economy).

pgp's picture
pgp
Status: Silver Member (Offline)
Joined: Mar 2 2014
Posts: 214
Heaven forbid that we should mention population growth

Of course the effects of population size and growth go hand in hand with resource depletion.  Nor can finite wealth be spread among the masses forever equitably.  I find it ironic that the subject of population growth is always overlooked... Almost as if there is some kind of subconscious taboo in admitting the stupidity of putting more people on a planet reeling from environmental overload and lack of space.

Otherwise CHS is superbly well informed as usual.  It's sad but all too human that the real thinkers in the world have the voices that are least heard. 

Fate is cruel and nature often rewards stupidity with death, so its no surprise that the human race has started to peak and that driven only limbically by emotion, romance, pride and belief it find's itself staring into the abyss.

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 492
Population Growth

There is no need to worry about overpopulation IMHO.  A minor or medium sized glitch in distribution of fuel and important commodities like water purification chemicals, medicine and food will trigger massive die offs. And the reality is that in western societies we have larger populations of older people rather than younger ones tipping the scales in a way the world has never seen before.

Also can't say I agree that nature rewards stupidity with death.  I think they often rise to the top or are elected leaders, unfortunately.  Evidence, -  just watch a little political theatre - I rest my case.

Informative article as always CH Smith!

AKGrannyWGrit

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 198
Right brain meets left brain
treebeard wrote:

what is most intriguing to me is analysis that ties the broad context of human experience together to create wide vision of future events.  I find the analysis here tends to stray towards a massive E for the economy, a small to mid size E for energy (mostly for its effect on economy), then a little bitty E for the environment.

It seems to me that much of our problem in this modern era is the financialization of our view of the human project.  So I was disappointed that so much of Charles list was consumed with financial items which is usually more broadly focused.  I find that a financial view tends more often towards a fear and adversarial based analysis.

Fear comes from a disconnection from reality, and to me financial  analysis is by its nature disassociative of the deeper issues of our relationship to each other and the world around us.

AH right brain meets left brain. No surprise here. For ten years the human experience has been reduced to economic charts on this site.You pretty much nailed it. This is why I drop in every few weeks and went years w/o reading. 

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 198
AKGrannyWGrit wrote: There
AKGrannyWGrit wrote:

There is no need to worry about overpopulation IMHO.  A minor or medium sized glitch in distribution of fuel and important commodities like water purification chemicals, medicine and food will trigger massive die offs. And the reality is that in western societies we have larger populations of older people rather than younger ones tipping the scales in a way the world has never seen before.

Also can't say I agree that nature rewards stupidity with death.  I think they often rise to the top or are elected leaders, unfortunately.  Evidence, -  just watch a little political theatre - I rest my case.

Informative article as always CH Smith!

AKGrannyWGrit

Unless of course you are the one dying off, then perhaps there might be some small cause for worry.

LesPhelps's picture
LesPhelps
Status: Platinum Member (Offline)
Joined: Apr 30 2009
Posts: 809
Mohammed Mast wrote: Unless
Mohammed Mast wrote:

Unless of course you are the one dying off, then perhaps there might be some small cause for worry.

Whilst reading a book, years ago, the author groused that he was depressed about the untenable situation that humanity was creating.  It eventually occurred to him that we all die.  What does it matter in the long run, whether we all die at once, or our deaths are evenly spread out over time?

"Everyone dies.  It's only a question of when."

- Tres Hombres

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 626
Growth vs Giving Back

Thanks for the response, you are my favorite commentator here, and when read this piece, I thought, oh no, Charles is going financial on us too!

 If I think about my own life and aspirations, very little of it has anything to do with financial growth.  I’m learning foreign languages, have taken up cycling, always trying to deepen my understanding natural systems and to relate to them gardening/permaculture techniques, developing better and deeper relationships with family members friends and the wider community, learn to cook better, improving yoga and meditation practice, etc, and on and on.  Somewhere at the end of a fairly long list would be items related to financial matters.  And most of that is defensive, how can I protect myself and family members from a society that has gone off the rails?

I have a feeling most people are like me, different interests naturally, but not financially obsessed. Some 90% of all equities are owned by less than 10% of the population, yet we are bombarded with stock market data like it is the most essential piece of information human beings need. Are business cycles as basic as gravity or human consciousness? What was the length of the business cycle in the Ming Dynasty, or say in native societies? 

The point being is that the very financial language used to describe the nature of our problem is the problem itself, it is the language of reductionism and exploitation.  As cultural values disintegrate, and the values of the rich and powerful supplant those of the broader culture, it destroys the very thing the wealthy love so much, materialism.  Greed shortens and exacerbates business cycles, leads to volatility and financial instability, wealth and income inequality, environmental degradation, and degraded life in all its forms.

How do we ground discussions about the economy in a broader cultural and environmental context which give it life and meaning?  Without that context economic discussions to me are not only meaningless but destructive.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5643
finance & cycles

treebeard-

It turns out, credit and finance has been around for a very, very long time.  Any time human civilization grew larger than a small tribe, it would develop some kind of monetary system, and soon after money arrives, then credit appears close behind.

https://www.armstrongeconomics.com/history/ancient-economies/commodity-prices-before-1259/

So if credit existed, then so did the business cycle, since credit is the driver.  There is possibly also a larger Empire business cycle driven by long term weather patterns (mini ice-ages end up causing depressions, warming trends result in expansions).

https://www.armstrongeconomics.com/markets-by-sector/bonds/bonds-climate-change/

In short, cycles, finance, and credit have been with us for millenia.

But here's the opportunity: if you understand cycles and their ultimate inevitability, you can use that to inform your life planning.

Me, I like the puzzle of finance and cycles.  The vast majority of people - even the really smart ones - don't know about the business cycle; I suspect that has to do with the physics of human emotion tied to memory.  Infrequent, shocking events (2008?) are seen by humans as one-off events, rather than a part of a much longer term pattern.  And yet - if there was a dead simple way to avoid financial trouble and/or increase your wealth in a relatively painless way, simply recognizing where you are in the business cycle and using that to inform your larger life-decisions would be a really simple way to do it.

If I had to assign myself a task, it wouldn't be a daily column, because most of the time, things don't change that much from day to day.  Instead, I'd write weekly, monthly, or perhaps quarterly, about where we were in the larger business cycle.  I'd spend more time on forecasters that looked ahead 3-6 months, trying to project trends and events ahead of time that were more relevant to people's lives on their life-timescale.  And if something really dramatic happened during the week, I'd do a real-time piece every now and then to explore the event that just happened.

To paraphrase the old saying about history: "If you don't understand finance, you are doomed to be exploited by it."

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 492
100%
Mohammed Mast wrote:

Unless of course you are the one dying off, then perhaps there might be some small cause for worry.

Yes that will be true.

I took a "Death & Dying" class at our local University.  The first thing our Instructor said the very first day was this.  "statistically speaking, 100% of people die".  So, for me the question is not if I will die but what will I leave behind.  And my efforts are to help shape a place that will provide food, shelter and hopefully sanctuary for whomever follows or is left.

 

charleshughsmith's picture
charleshughsmith
Status: Platinum Member (Offline)
Joined: Aug 15 2010
Posts: 722
hand to mouth, "money", buffers and resiliency

This is fertile ground for several discussions. The End of Growth, fossil fuels, globalization, centralized power, geopolitics as its currently understood and so much more is unfolding and manifesting in all sorts of ways, many of which are tracked here in one way or another. I would say that the majority of my recent output here has been addressing social disorder not finance, but the two are of course interconnected, along with everything else. Why are soils being depleted? To maximize profits, duh!

Many people are living hand to mouth, in the US and the rest of the world. They see their most pressing problem as "I don't have enough money" followed by "the costs of everything keep rising." In other words, finance/economy is where the manifestations present themselves as pressing concerns.

Most of the readers /subscribers of this site are relatively well-off. Precariats can't justify the cost. So we're a self-selected audience. Those of us with financial security have the luxury of pursuing other interests. This security might arise from being part of Peggy Noonan's "Protected class" or from bootstrapping, hard work, sacrifice in service of long-term goals or choosing the right parents, class and circumstances. (inherited wealth)

My point is that finance/economy aren't the end-all to be-all but they manifest all the inter-related causes and feedbacks in measurable ways that impact everyone to one degree or another.  Venezuela has a variety of issues to deal with (dysfunctional governance, perverse incentives, decaying infrastructure, etc.) but the collapse of the currency has impoverished everyone and so issues of climate change, soil depletion, etc. lose their relevancy to people trying to get enough food.

One of my core phrases is "if we don't change the way money is created and distributed, we change nothing." If we want to solve any of these non-financial issues (lowering birth rates, water conservation, protecting ecosystems, reducing consumption,etc.) we have to start with the way money is created and distributed, as these establish the incentives that influence all human action.

So in this sense, yes, finance is the key to everything else.  As the book on Rome and climate change/pandemics I mentioned makes clear, crises arise that have nothing to do with "money"  but they manifest very quickly in financial ways that impact everyone in the system. So in the Roman empire, even towns spared the ravages of the plague were soon ravaged by financial repercussions of these other forces.

We've been protected from all sorts of forces because we can create money out of thin air and trade that "money" for trillions of dollars of goods and services produced elsewhere. Most of us implicitly assume that will continue indefinitely.

Cycles matter because non-financial crises that arise at the peak of financial "wealth" may not bring the entire system down, but crises that happen at financial troughs of weakness will bring the system down as buffers and resiliency have been thinned to the point where one push is all that's needed.

herewego's picture
herewego
Status: Silver Member (Offline)
Joined: Aug 11 2010
Posts: 155
Credit where due

I enjoyed the article, Charles, and this ensuing discussion. Thanks! I don’t know if the worms can turn though. We are so completely misinformed and unskilled now. With what resources would we take a stand? But we can get stepped on, or possibly avoid being stepped on.

About the 3E discussion:

The 3E perspective is still the best lens I’ve seen to account for and organize the enormous body of information that our species’ and biosphere’s situation now entails. I relish the company of you all who can learn, think, adapt and share with all 3 Es in view. A DEEP thank you to Chris, his family, Adam and his guests for going out on a limb repeatedly to create and promote such a useful perspective.

That’s why I’m still here, though I really, truly, deeply, already understand and accept that the ““markets””, including real estate bubbles, will die, kill my pension hopes, destroy my parents’ wealth and make a wreck of most my friends’ lives. And yes, money as we know it is dying on its feet. While that was an astonishing, terrifying revelation a few years ago, thanks to PP and other sources it is now on the radar and I only need to track for timing. It isn’t inherently interesting. Maybe if I were an investor....

So I do feel kind of parched for some other level of discussion amongst these skilled and 3-E informed online companions that we have become.

Clearly, Adam, Chris, some of their guests and many of their posters “get” the Environment E. When they do write or speak of it, I hear love, grief and a keen awareness of the depth of our relationship with and dependence on a functioning planetary biosphere. I’ve also been amazed and delighted by the evidence of inner work and deeper levels of insight that have shown in our work here. Delighted because finding humans who can navigate the 3Es AND bring self-awareness to the table is RARE, and precious to me.

Is there some fourth E? “Existential”? “Elemental”? “Ecstatic”? That level where we resonate with the glory of what is, here, all around us, from the last cold sip of coffee just now to the precious body of lake water down the road with its ever-present gifts of beauty, music, life and delight. How does one find words for this kind of magnificence? Our Beloved World. Our minds need to remember what our souls try not to forget: an existential foundation of ecstatic connection with what is. This planet is a fantastic teacher on that level, and also the physical foundation for all of our systems. How do we reclaim and live from that, instead of from our economic fantasies? What skills does that require? How do we get some of our attention on developing those? Like homesteading skills, it takes plenty time to develop being skills, and assumption deconstruction is heavy labor indeed.

I do not see any conversation about the markets, the economy or the monetary system as they are yielding functionally sound results. But can we break the back of the nonsensical assumptions (“externalities” - do I really look that dumb?)? Can our discussions reclaim our foundational joy in being here, our love for and willingness to be accountable for our actions on this planet? Because SHE IS THE ECONOMY, and our systems are a subset of hers. Any theory or practice - even if it’s been around for a whole hundred years - that doesn’t get that is not dealing with reality – only with a short-lived, devastatingly impactful illusion.

My two cents worth:
Much credit due here, and oh I’m thirsty for the work of creating new a narrative together!

charleshughsmith's picture
charleshughsmith
Status: Platinum Member (Offline)
Joined: Aug 15 2010
Posts: 722
4th and 5th Es

I like the proposal of additional Es.  As you know, Chris in particular has written about spiritual / internal aspects of our collaborative voyage through the transition that's unfolding.  My own personal interest is social/cultural, i.e. how we relate to those around us, to the structures of everyday life (to use Braudel's phrase) and how we understand/contextualize the waves of change that are rolling in.

I'm always seeking ways to advance my own understanding and add something to the conversation, so I appreciate suggestions for future topics to explore/discuss.  Food for thought, and I'm hungry!

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 492
Hi Charles

My suggestion would be to do an article on how people are adapting to the sociatal changes.

I personally am not as interested in the analysis of "what is and how we got here" but rather how to survive "what is".  For instance I am probably one of the few who post or regularly read PP who shops at Goodwill, hits the mark-down section of the grocery store first.  I have noticed that over the past 10 years, (and can count at least 15) that many gift shops have closed in my town.  Crime is sky-rocketing and trends are changing.  Only a ew of us notice many of the suttle changes.  Sears closing, Sams Club and some Mom& Pops are a little more obvious.  A shiny NEW business that just opened is Dave & Busters, a sociological statement to be sure. Some of the new trends are re-purposing, co-opting, creating multiple small income streams (think TaskRabbit or Uber) and rather than brick & mortar - mobile everything.  Dog grooming, boutiques, food trucks, glass repair, coffee stands, and so on are becoming more popular as there is no high monthly rent.

Perhaps if you noodle on the idea it may grow into an article, at least I hope so.

Happy noodling!

AKGrannyWGrit

 

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excellent suggestion

AKG, that's an excellent suggestion.  I've also noticed that thrift store prices on many items have skyrocketed by a larger % than retail goods.  Fortunately I can still dumpster-dive the college students' trash bins for free, and remain confident that their over-consumption will yield lots of goodies when they move out :-)

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Light Bulb Moment!

CHS, what a novel idea, that never occurred to me.  A great article in the making for sure!

I too have noticed prices at various goodwill outlets have indeed gone up.  However there are obscure, hole in the wall, places where good deals can be found.  I have found when someone needs something if they ask family and friends to keep an eye out for a specific item one usually appears.  People like to help others solve a problem.

There is a very real trend these days to re-purpose, embellish, and re-use items.  I predict that there will be some big companies that have been so busy buying back their own stock that they haven’t seen the trend of re-use rather than buying new.  These companies will be dumbfounded when they realize few jobs and the satisfaction of re-use means little profit for them.

On a personal note I bought a beautiful wool Neman Markus jacket at goodwill for about $20 and almost everytime I go out someone comments on my jacket because it’s very colorful. I enthusiastically share that I found it at goodwill and say that there are great deals to be had if one looks.  The objective is to erase any stigma that only the poor and destitute shop at goodwill.  It’s just not true, mainstream “Middle America” does these days and there is less and less stigma and shame associated with it.  It’s a matter of necessity.  And DIY is the in-thing!

Looking forward to more great tips!

AKGrannyWGrit

 

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4th E

I've often thought of the 'consensus trance' as the fourth E. This is the psychological condition of being unable to integrate the implications of the 3 Es into ones world view. Put slightly differently it is the inability to take on board factual data that is counter to ones deeply held beliefs - the data is generally jettisoned and the beliefs held tight. And since this fact is fundamental to our predicament it would be nice to recognize this with some type of honorary 'E' status.  Unfortunately I can't think of any synonyms that actually start with the letter E so the notion is probably doomed.  Suggestions anyone?

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Enculturation
David Allan wrote:

I've often thought of the 'consensus trance' as the fourth E. This is the psychological condition of being unable to integrate the implications of the 3 Es into ones world view. Put slightly differently it is the inability to take on board factual data that is counter to ones deeply held beliefs - the data is generally jettisoned and the beliefs held tight. And since this fact is fundamental to our predicament it would be nice to recognize this with some type of honorary 'E' status.  Unfortunately I can't think of any synonyms that actually start with the letter E so the notion is probably doomed.  Suggestions anyone?

Not sure if this is what you're getting at, but consensus trance is certainly at it's root, a  function of enculturation.

 

mm

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Bravo

Oh, very good mememonkey. The closest I could get was entrancement - your suggestion is much better

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consensus trance

It occurs to me that the consensus trance is - perhaps - the Backfire effect meets herding behavior.

My guess: evolutionary biology has constructed the backfire effect to make sure that hard-won life lessons are never relinquished, while - again presumably - the herd comes up with better decisions in aggregate than individuals, at least most of the time.  [In trading, the saying is: "the herd is right about the trend, but wrong at both ends"].  I suspect both of these behaviors are usually pro-survival.  We may bemoan the lack of flexibility that the backfire effect brings, but - how much disaster would we encounter if we all simply ditched our hard-won life lessons at the first challenge?

I would guess that evolution tried all sorts of approaches long ago, and found it led to poor outcomes.

Perhaps chalk it up to being heavily influenced by our biology?

 

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davefairtex wrote: Perhaps
davefairtex wrote:

Perhaps chalk it up to being heavily influenced by our biology?

I find, especially in dealing with teenagers for over two decades now, that most adults don't seem to chalk up near enough to our biology as we should. For example:

"Teenagers do stupid things." First off, yes they do. Second, we did too when we were teens. Third, their frontal lobes are all sorts of a mess until their early 20s. At least they have an excuse, whereas the adults I know who do stupid things have far fewer excuses.

 

"Teenagers don't think about the long-term consequences of their actions." First, some do. Some do, some of the time. Most do, occasionally. Second, most humans aren't good at long-term thinking. As primates, long-term thinking would not have served us as well as short and medium-term thinking/planning.

 

"Teenagers are lazy." Um...no biological entity will expend more energy than it needs to expend in order to get the energy it needs. Monkeys don't climb to the top of a tree to get fruit if there is fruit on the lower branches, unless there is a predator down there. The teenagers who do expend more energy than they need to get good grades, for instance, perceive that is what is needed for their long-term success...and they usually are the ones who buck the biology and actually do think long-term. Humans are lazy, as is any organism if it can afford to be. 

 

In all seriousness - this whole post is tongue-in-cheek- I think that we often don't take biology and psychology into account when considering lots of things. Economists who base their economic models on the assumption that people will act rationally, for instance, clearly don't know much about human psychology.

 

Great conversation in this thread by the way. A fine example of why I always come back to PP.

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Another "E"

Great idea.  There is a lot of talk about emotional resiliency and developing connections to your local community to create community resilience. I don't know how you qualify/quantify that to raise it to a 4th E, but certainly the cultural vessel in which this all occurs can be as important as all the other E's.  And certainly the integrity of relationships between the three E's is critical to our ability to think wholistically about problems and avoid the "silver bullet" syndrome.  Certainly no single issue, like a gold standard, as much I support the idea will solve all our problems, (or even go a long way to solving all our problems).

Regardless of the economic or political construct the we are placed in, if we collectively don't reach a minimal level of enlightenment, all is for nought.

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my proposed 4th E : eudaimonia
Here is my proposed 4th E: Eudaimonia Below are excerpts on the full meaning from Wikipedia and Brittanica. I think this covers quite a bit of the ground we'd all like to see discussed here:
 
Eudaimonia, sometimes anglicized as eudaemonia or eudemonia /juːdɪˈmoʊniə/, is a Greek word commonly translated as happiness or welfare; however, "human flourishing or prosperity" has been proposed as a more accurate translation.
 
Etymologically, it consists of the words "eu" ("good") and "daimōn" ("spirit"). It is a central concept in Aristotelian ethics and political philosophy, along with the terms "aretē", most often translated as "virtue" or "excellence", and "phronesis", often translated as "practical or ethical wisdom" In Aristotle's works, eudaimonia (based on older Greek tradition) was used as the term for the highest human good, and so it is the aim of practical philosophy, including ethics and political philosophy, to consider (and also experience) what it really is, and how it can be achieved.
https://en.wikipedia.org/wiki/Eudaimonia
 
The Greek word eudaimonia means literally 'the state of having a good indwelling spirit'; and 'happiness' is not at all an adequate translation of this word.
https://www.britannica.com/topic/eudaemonism#ref273308
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Fourth E: Escapism

I love this conversation!  Thank you.

I propose Escapism as the fourth E.  Merriam Webster defines escapism as

Habitual diversion of the mind to purely imaginative activity or entertainment as an escape from reality or routine

Oh, the directions we can go with this definition.  "Imaginative activity," besides encompassing all the truly mind numbing nonsense that is called entertainment these days, also includes believing business as usual can continue without consequence.

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No one should rent space inside your head

Without your consent. 

I wanted to post this talk here to get this info in front of Chris, Charles and everyone else.

His book is also worth the read.

https://www.facebook.com/Flowgenome/videos/1724405300935816/

The talk is titled Manufacturing dissent: Cognitive Liberty in the Age of the Algorithm

Author - Jamie Wheel from the Flow Genome Project. Book is Stealing Fire. 

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Great writeup and discussion.

Great writeup and discussion. I just wanted to discuss some current events from my area since it is relevant to the worms uprising. For a long time Alberta has been pushing for another pipeline to the BC Coast to increase oil sands crude export. Kinder Morgan already has a small pipeline out here but it constrains supply. From what I understand most of the other pipeline projects from Alberta have been squashed as well. Alberta really wants access to global oil markets.

Enbridge proposed the Northern Gateway pipeline several years ago which was heavily opposed and it died. Kinder Morgan has proposed the twinning of its existing pipeline to increase throughput to Burnaby. This would follow the existing pipeline but in many sections would take a new route. I think it would result in a 10 fold increase in tanker traffic through Vancouver Harbour.

There has been a lot of resistance in BC to this pipeline for several reasons. The National Energy Board which was basically shaped by the previous Conservative federal government was / is stacked with pro-pipeline sympathizers and the review process was criticized for being a sham from the beginning, and from what I have learned about it, it indeed was.

The federal government approved the pipeline and has been trying to convince BC that it should be built and legally, it now has the green light. But BC Premier Horgan has come out against the pipeline and has vowed to stop it, largely a political move to not completely alienate the environmental contingent after he approved the Site C dam (a terrible legacy of the previous "Liberal" government which was actually made up of Conservatives). Alberta has responded with a boycott of BC wines.

The problem is that the pipeline does not have the support of aboriginals whose land it would be passing through. The federal government made a mistake by rubber stamping it because they tried to ram it through. This has created huge resentment and resistance here. Hundreds of people have already been arrested as construction is starting at the port and it hasn't actually gone through any native land yet (although many would argue that Burnaby is still native land).

The spill response plans have been criticized as being inadequate, and I would agree. I don't think they haven't done a real investigation into what would happen, and for good reason: if they did, they would have to admit that the stuff sinks and they just don't know how to clean it up. The predictable response from the oil industry is to assure us all that marine safety will be top priority. But this, coming from Kinder Morgan, which is run by the same guy who did the Enron scam, doesn't hold much weight. Especially in light of all the ongoing oil spills all over the world despite the industry's continuing assurances that it is safe. People just don't believe them.

In the last couple of days, Kinder Morgan has put the project on suspension for a couple months until more certainty can be achieved. It looks like this project may possibly end up being canceled. I find this interesting because the worms are rising up. The people are opposing the multinational plans to do whatever they want with our environment. But this will create a lot of internal resentment within Canada, either way this project goes. Alberta sees it as their right to force a pipeline onto BC which BC doesn't want, and our only "payment" for this would be greater federal tax revenues and job opportunities for BC'ers who want to go work in Alberta. Alberta sees it as unfair that BC is sabotaging their economic plans.

The Feds and Alberta keep arguing that this pipeline is essential for Canada's economic well-being -- further proof that they don't understand the 3 E's and the folly of exponential growth. They don't understand how to handle unemployment in Alberta when the economy stops growing. They don't know how to manage an economy that isn't growing. They have no idea what will happen when the oil runs out -- that will be some future generation's responsibility to sort out. Or Treknology will sort it out by then.

It seems Canada is dealing with so many of the issues that all former oil exporters have dealt with. I just wish this project had been handled properly and fairly from the beginning so that it would have never gotten to this stage under false pretenses. On one hand, I understand the argument for giving the world's largest remaining oil reserves access to world markets, but on the other hand it was forced on the people illegitimately. Due process was not followed. If it had been, then we would have never gotten to this stage where there is so much antagonism because all parties were not properly considered and included.

Alberta says if the pipeline doesn't go through, the crude will be shipped out by train which has a greater likelihood of spills.

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davefairtex wrote:It occurs
davefairtex wrote:

It occurs to me that the consensus trance is - perhaps - the Backfire effect meets herding behavior.

My guess: evolutionary biology has constructed the backfire effect to make sure that hard-won life lessons are never relinquished, while - again presumably - the herd comes up with better decisions in aggregate than individuals, at least most of the time.  [In trading, the saying is: "the herd is right about the trend, but wrong at both ends"].  I suspect both of these behaviors are usually pro-survival.  We may bemoan the lack of flexibility that the backfire effect brings, but - how much disaster would we encounter if we all simply ditched our hard-won life lessons at the first challenge?

I would guess that evolution tried all sorts of approaches long ago, and found it led to poor outcomes.

Perhaps chalk it up to being heavily influenced by our biology?

I just don’t see it.  I can identify human intelligence in individuals, Sir Isaac Newton, Richard Feynman, but not at all, in the behavior of large groups of people.

Where is the intelligence in what Homo sapiens are doing today?  How are we distinguishable from a toxic algae bloom, mindlessly consuming resources until they run out and destroying our habitat while doing so?

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LesPhelps wrote: Where is
LesPhelps wrote:

Where is the intelligence in what Homo sapiens are doing today?  How are we distinguishable from a toxic algae bloom, mindlessly consuming resources until they run out and destroying our habitat while doing so?

 

There was a moment in the movie Independence Day (you know, the crappy sci-fi film back in the 90s) when the American President was yelling at the aliens because they had come to earth to essentially rape, pillage, and strip it of its resources before moving on to another planet. I remember thinking back then, "Ironic. We're pissed because the aliens are just better and more efficient at it than we are."

 

We are the toxic algae bloom, but the nice thing is that the laws of nature still rule here. We too shall have our reckoning and be brought back down to manageable numbers.

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LesPhelps wrote:Where is

Double post blues.

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Snydeman
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LesPhelps wrote:Where is

Um..

 

/smacks head and points at his crappy modem

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LesPhelps wrote:Where is

/sighs

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Berry, Wendell

"Whether we and our politicians know it or not, Nature is party to all our deals and decisions, and she has more votes, a longer memory, and a sterner sense of justice than we do." - Wendell Berry 

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Snydeman wrote:There was a
Snydeman wrote:

There was a moment in the movie Independence Day (you know, the crappy sci-fi film back in the 90s) when the American President was yelling at the aliens because they had come to earth to essentially rape, pillage, and strip it of its resources before moving on to another planet. I remember thinking back then, "Ironic. We're pissed because the aliens are just better and more efficient at it than we are."

Agreed, it was a crappy movie.  However, I've never forgotten the scene when the character Jeff Goldblum plays looks at his father coffee in a styrofoam cup and asks his father, "do you know how long those cups last?"

I've been avoiding disposable cups and bottles ever since.  

These days, it feels good.  Every week, I pick up other peoples trash along the highway.  The top four items I pick up are beer cans, styrofoam cups, plastic bottles and convenience store to-go cups.  Retails store plastic shopping bags are a close 5th place.

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SwEEEEt Conversation!

I’ve been very busy with family events, and now again with work, but there’s been time to peek in here. Love the E ideas, many of which helped me understand more of my own tentative thinking. (And also the summary of the situation here in BC with the pipelines.)

Wrestling with the possible 4th E:

-What do the other 3 Es have in common? Chris calls them a lens. They comprise globally-scaled systems which carry our civilization, and are nevertheless strongly limiting, to the point of catastrophic impact.

-It is continuously bumping into some other as yet undefined limiting effect that makes me suspect the existence of another E.

-I know PPers depend on evidence to back thinking, and that usually means data, scientific studies or reports from credible sources. My source is extensive personal experience of human community and personal growth practices, which doesn’t quite fit in here. Be that as it may, I do know from that experience that a well-supported and even partially-healed human can embody remarkably insightful intelligence, deep presence and real power in the world.

-Coming from that background, I’ve accepted that human effectiveness is not only a function of our intellectual ability. Our emotional selves have the whip hand, even if we “successfully” suppress them. I assert that our top quality intellectual activity rides the deep insights provided by digestion of emotional reactions. THERE we are connected to our values, passions, loves and responsibilities, and there we can see much more context for our Earth experience. We just can’t think well, feel deeply, have insight, recognize consequences, be steadfast, or even enjoy Earth life much if we are carrying around a confusion of undigested pain experiences. And our intellects, though fabulous, can get horribly lost when we are in pain.

-A 4th E, for me, then, and apparently for some of you too based on your E words, has something to do not with the world or systems out there in the world, but with the inner world of human limitation/capacity: deadly stupid when in a mess, powerful and brilliant when supported and awake.

I hate to send this in half-digested, but there will be no more time to work on it for awhile. Thanks to all for your great input on such an interesting conversation. I don't seriously propose that we need to change the 3 Es, but it does provoke good thinking!

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A fourth E.....

would be transformative.  It would take the message of this site from an analysis and critique of the current state of affairs allowing us to prepare for what has a high probability of occurring as individuals to one that seeks to create a new narrative.   In a sense this site fractured the discussion by creating the Resilient Life section, where the mundane details of what variety of tomatoes to plant or how to raise chickens is discussed.  How do we let that thought process inform the discussion at a higher level the rest of the site. As David Korten said, if you want to change the future, change the narrative.

Crafting a new vision is no mean feat. As was suggested early on by MM, left brain, meet your other (and better) half please, mister right brain.  Are we ready for this?  The amazing abundance of natural systems is created by all the participants giving back more than they take.  Yet it seems to be the imperative of our current system is - take, take and take some more, only the weak and the stupid give back.  Isn't the mantra even hear, preserve your wealth, keep your hands tightly grasped.  And yet the natural systems continue to give, and they will let us destroy them, if we will let ourselves do just that.

Imagine if those digital dollars that flew around were forced to be visualized in say equivalent energy values, say cords of wood, barrels of oil, physical human labor, harvested crops, etc.  Could we continue to do what we do.  Could we continue on as the walking dead.  We are trading life for digits on a computer screen.

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How about Emergence as the 4th E?

Hi Treebeard,
I love your idea that the fourth E should be something positive.  How about Emergence?  There are so many levels to emergence in this conversation, both internal and external.  Typically, when we increase our awareness about anything, something which this community fosters, we emerge into a new of seeing and relating to ourselves, loved ones, community and the larger world.  What will emergence out of the perpetual growth meme look like?

--Suzie

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I vote for emergence

Suzie, that is a powerful 4th E--emergence, as its core is the recognition of the need for emergent systems/narratives which includes what we're all talking about, bottoms-up, self-organizing, decentralized ways of living as opposed to top-down hierarchies imposed to keep the status quo glued together a bit longer. I vote for emergence.

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2nd the motion

Emergence 

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4th E is needed - I recommend "Ethics"

I wrote this a couple of years ago but I still like the idea of "Ethics". Ethics should be based on facts and results. We can agree on ethics no matter what our religion or spiritual leanings. They should be overriding principles which if followed would solve the issues of disconnection we are having today. The 3 ethics of permaculture for example are care of earth, care of people and share the surplus. Those are a good starting point. I would like to have all people on the planet adopt an ethic that says the entire geological/biological world is a singular system which no entity has the right to damage. Damaging that system is a crime. I like the word "emergence" but I don't think others will know what it refers to without explanation. Ethics is straightforward - given the actual realities of the energy, environment, and economic systems - we should proceed and take actions based on the ethical principles which apply to today. "All men are created equal" has become problematic to say the least. The new ethic might be "All creatures great and small and the natural earth they live on should be preserved". 

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