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6 Essential Strategies For Prospering Through The Next Crisis

Be one of the few positioned to prosper when crisis hits
Friday, April 6, 2018, 11:32 PM

Executive Summary

  • The trends that have driven the past 10 years are now ending/over. Ride their reversal wisely.
  • Crisis can destroy or magnify your prospects. Your decisions today will control which outcome you experience.
  • In many cases, you need to do the opposite of what the 'herd' is doing
  • The 6 essential strategies for prospering through the next crisis

If you have not yet read Part 1: This Is The Turning Point, available free to all readers, please click here to read it first.

Strategies For Prospering Through The Next Crisis

Those with the open-mindedness, courage and optimism to adapt in time will be far less impacted -- and indeed, will have much better odds of coming through this transition the better for it. Amazing opportunities will arise during this time to increase all aspects of your wealth (yes, money -- but also in all the other important Forms Of Capital, too).

Don’t count on currency “money” retaining its purchasing power. 

States (governments) always follow the same pathway: when financial promises can’t be kept, states debauch/devalue their currencies as a politically expedient short-term solution.

But alas, just like central bank stimulus, the short-term expediency becomes the permanent policy, and the unintended consequences start piling up, for example, a loss of trust in the state’s currency.

I see Venezuela’s destruction of its currency as the canary in the coalmine. The first canaries to drop lifeless from their perch will be non-reserve currencies.  Then the weakest of the reserve currencies will be over-issued (via credit rather than actual money-printing) and then even the mightiest will collapse.

Many people reckon the US dollar (USD) is the weakest, and perhaps they’ll be right, but I think the Chinese yuan (RMB), Japanese yen and EU euro will lose purchasing power first.

The RMB isn’t actually a “real currency,” it’s simply a derivative of the USD via the official peg. As for becoming gold-backed, please examine any chart of Chinese debt issuance (all of which is currency) and then compare that to... » Read more

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Charles Hugh Smith: Fixing The Way We Work

Closing the wealth gap with meaningful work
Sunday, November 15, 2015, 2:34 PM

Charles Hugh Smith returns to the podcast this week to discuss the theme of his new book A Radically Beneficial World: Automation, Technology and Creating Jobs for All.

Automation and artificial intelligence are changing the landscape of work. Tens of millions of jobs are on track to be eliminated over the next decade or so by these advancing technological innovations in the US alone.

The way in which our current economy is constructed, the fruits of those cost savings are likely to go into a very small number of private pockets, while the millions of displaced workers will find themselves with no income and no work to do. It's a huge looming problem that is not being address in national dialog right now.

But there's opportunity to course-correct here. To use our new technologies to increase total productivity in a way that empowers rather than diminishes the individual worker. » Read more

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The Siren Song of the Robot

It may not be the boon we're counting on
Tuesday, January 29, 2013, 1:03 PM

The quest for cheap energy and cheap labor is a conquering human urge, one that has played out with notable ferocity starting with the Industrial Revolution. The introduction of coal into British manufacturing and the more recent outsourcing of Western manufacturing to Asia have marked key thresholds in this ongoing progression.

But despite the harvesting of additional productivity gains from the more recent revolution in information technology, the suite of macro data suggests that the rate of advancement in physical production has slowed, notably, in the past thirty years.

Seen in this light, the greatest gains to global industrial production were probably enjoyed from the late 18th century (when coal extraction and use began in earnest) into the mid-20th century (when oil reached broad distribution). In contrast, computers, the Internet, and the leveraging of developing world labor might eventually be seen as the finishing touches on this great industrial wave. » Read more

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Why the Robot Age May Create a Massive Deflationary Bust

And could create epic inequality
Tuesday, January 29, 2013, 1:02 PM

Executive Summary

  • The transition back to an electricity-centric economy is regressive
  • Declining net energy and peak expansion are co-incident
  • Change that substitutes labor without providing a higher use for it is deflationary and results in inequality
  • Our challenge is to find sustainable work for society

If you have not yet read The Siren Song of the Robot, available free to all readers, please click here to read it first.

Capitalism demands fast gains in productivity. Capitalism seeks revolutionary change. But it’s not clear whether a revolution in machine intelligence leads to a deflationary boom, per Schumpeter, or a deflationary bust.

Writers such as Paul Krugman have perhaps moved too quickly, too easily, to conclude that a massive increase in production from such technology leads sustainably to large growth in GDP without severe consequences. Indeed, in a recent essay responding to Robert Gordon's paper on the end of growth, Krugman takes the view that (positive) returns from technology are just beginning to unfold.

I conclude that Krugman is actually concerned about and open to the possibility that an enormous wave of disruption to manufacturing from robots could produce higher GDP initially and also problems thereafter. What happens to wages in the broader economy?

One does not have to be a Luddite about technology to fear yet another huge new round of wage deflation. The West has already been treated to an era of “cheap, quickly manufactured goods that enhance people’s lives” during the past two decades. And it’s not clear that a flood of goods has necessarily improved well-being.

While I certainly wouldn’t make the curmudgeon's case that electronic devices have reduced well-being, it’s not clear that the I.T. revolution has accomplished much in the way of delivering to consumers cheaper and better quality energy, food, or health care. » Read more