charleshughsmith
Executive Summary
- Identifying the 8 characteristics that signal a system is experiencing diminishing returns
- The powerful advantages simplification can offer
- Debt-avoidance as a forward strategy
- The criticality of creating parallel, self-reliant systems
If you have not yet read Our Era’s Definitive Dynamic: Diminishing Returns, available free to all readers, please click here to read it first.
In Part I, we surveyed examples of diminishing returns and touched upon the forces that generate devotion to systems beset by diminishing returns. In Part II, we’ll look a little deeper into the dynamics, with an eye on avoiding being ensnared in systems that are doomed by dwindling yields and rising costs.
Characteristics of Diminishing Return Systems
1. Friction. Sources of what I term 'friction' include procedural impedance between dissimilar systems, fraud, inefficiencies, and processes that no longer add value but that are accepted as “the way things work.” (I wrote about systemic friction for Peak Prosperity in 2011: How Much of the U.S. Economy Is Friction?)
Common examples include the proliferating “reward cards” from retailers that fill our wallets and purses with low-value complexity and our absurdly complex income tax system that costs billions of dollars while serving primarily as a conduit for special-interest tax breaks.
2. “Solutions” that do not address the root problem. One example is our healthcare system’s haphazard approach to mental health: A great many mentally ill people who fall between the system’s cracks end up being incarcerated, in essence passing the cost and responsibility for mental healthcare to the already-burdened criminal justice system. Imprisoning the mentally ill is clearly a diminishing-return “solution” to our systemic lack of mental health care.
How to Overcome Diminishing Returns
PREVIEWExecutive Summary
- Identifying the 8 characteristics that signal a system is experiencing diminishing returns
- The powerful advantages simplification can offer
- Debt-avoidance as a forward strategy
- The criticality of creating parallel, self-reliant systems
If you have not yet read Our Era’s Definitive Dynamic: Diminishing Returns, available free to all readers, please click here to read it first.
In Part I, we surveyed examples of diminishing returns and touched upon the forces that generate devotion to systems beset by diminishing returns. In Part II, we’ll look a little deeper into the dynamics, with an eye on avoiding being ensnared in systems that are doomed by dwindling yields and rising costs.
Characteristics of Diminishing Return Systems
1. Friction. Sources of what I term 'friction' include procedural impedance between dissimilar systems, fraud, inefficiencies, and processes that no longer add value but that are accepted as “the way things work.” (I wrote about systemic friction for Peak Prosperity in 2011: How Much of the U.S. Economy Is Friction?)
Common examples include the proliferating “reward cards” from retailers that fill our wallets and purses with low-value complexity and our absurdly complex income tax system that costs billions of dollars while serving primarily as a conduit for special-interest tax breaks.
2. “Solutions” that do not address the root problem. One example is our healthcare system’s haphazard approach to mental health: A great many mentally ill people who fall between the system’s cracks end up being incarcerated, in essence passing the cost and responsibility for mental healthcare to the already-burdened criminal justice system. Imprisoning the mentally ill is clearly a diminishing-return “solution” to our systemic lack of mental health care.
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…
The New Education Models Offering New Hope
PREVIEWExecutive 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…
Executive Summary
- How to recruit the "best-fit" members
- How to develop community rules in advance to attract the best prospects and set expectations from the beginning
- Ownership/management options for running communities (including a recommended structure)
- The 6 key guiding principles for running an intentional community
If you have not yet read Part I: The Growing Appeal of Intentional Community, available free to all readers, please click here to read it first.
In Part I, we surveyed some of the more common variants of traditional communities: religious communities, family-based hamlets, cohousing and cooperative housing. In Part II, we’ll examine some of the issues that must be addressed when starting an intentional community.
I hope I won’t shock you too terribly by starting with the observation that human beings are notoriously difficult to deal with when assembled in groups. Those of you who participate in community groups need no further explanation, as you are already nodding your head in agreement.
Trying to achieve consensus on every issue is either impossible or impossibly time-consuming, and so every organization, from church to nation-state, has a structure to simplify participation and authority.
There are two sets of problems in launching an intentional community: assembling a group of people with the collective capital and will to bring a complex project to fruition, and locating a practical, affordable building or parcel for the community…
Key Considerations for Starting an Intentional Community
PREVIEWExecutive Summary
- How to recruit the "best-fit" members
- How to develop community rules in advance to attract the best prospects and set expectations from the beginning
- Ownership/management options for running communities (including a recommended structure)
- The 6 key guiding principles for running an intentional community
If you have not yet read Part I: The Growing Appeal of Intentional Community, available free to all readers, please click here to read it first.
In Part I, we surveyed some of the more common variants of traditional communities: religious communities, family-based hamlets, cohousing and cooperative housing. In Part II, we’ll examine some of the issues that must be addressed when starting an intentional community.
I hope I won’t shock you too terribly by starting with the observation that human beings are notoriously difficult to deal with when assembled in groups. Those of you who participate in community groups need no further explanation, as you are already nodding your head in agreement.
Trying to achieve consensus on every issue is either impossible or impossibly time-consuming, and so every organization, from church to nation-state, has a structure to simplify participation and authority.
There are two sets of problems in launching an intentional community: assembling a group of people with the collective capital and will to bring a complex project to fruition, and locating a practical, affordable building or parcel for the community…
Executive Summary
- Understanding the Fed's ability to impact (or not) health & education, pensions, and inflation
- What you can do to insulate yourself from the impacts of the Fed's financial interference
- Mindset
- Major expenses
- Debt
- Resilience
- Income
If you have not yet read Part I: The Fed Matters Much Less Than You Think, available free to all readers, please click here to read it first.
In Part I, we found that the supposedly omniscient Federal Reserve is irrelevant to the engine of real wealth creation (innovation) and actively inhibits the allocation of capital and labor to innovation by incentivizing speculation and malinvestment.
In Part II, we’ll look at what else matters that the Fed either negatively influences or does not control, as well as specific actions we can take as individuals to insulate ourselves from the collateral damage caused by misguided central bank policies.
Health and Education
We all know health and education are vital to individuals and the economy, and like everything else that matters, the Fed’s influence is limited to financial repression of interest rates that enables the Federal government to avoid the sort of healthy fiscal discipline that higher rates would demand. In other words, the Fed has widened the moat around government spending, protecting it from the hard choices that would accompany massive deficits and bond issuance in a free-market economy.
Public and Private Pensions
By at least one measure, the Fed’s repression of interest rates (designed to recapitalize the banks at no direct cost to the Fed or government) has cost savers $10.8 trillion in lost income. Since the majority of savings in the U.S. are in public and private pension plans, 401Ks, and IRAs (individual retirement accounts), the Fed’s repression of interest rates has pushed these income-security savings into risky speculative asset bubbles in stocks, bonds, and real estate, and critically undermined the financial health of pensions by radically reducing their low-risk, safe returns.
How You Can Limit Your Exposure to the Fed’s Financial Interference
PREVIEWExecutive Summary
- Understanding the Fed's ability to impact (or not) health & education, pensions, and inflation
- What you can do to insulate yourself from the impacts of the Fed's financial interference
- Mindset
- Major expenses
- Debt
- Resilience
- Income
If you have not yet read Part I: The Fed Matters Much Less Than You Think, available free to all readers, please click here to read it first.
In Part I, we found that the supposedly omniscient Federal Reserve is irrelevant to the engine of real wealth creation (innovation) and actively inhibits the allocation of capital and labor to innovation by incentivizing speculation and malinvestment.
In Part II, we’ll look at what else matters that the Fed either negatively influences or does not control, as well as specific actions we can take as individuals to insulate ourselves from the collateral damage caused by misguided central bank policies.
Health and Education
We all know health and education are vital to individuals and the economy, and like everything else that matters, the Fed’s influence is limited to financial repression of interest rates that enables the Federal government to avoid the sort of healthy fiscal discipline that higher rates would demand. In other words, the Fed has widened the moat around government spending, protecting it from the hard choices that would accompany massive deficits and bond issuance in a free-market economy.
Public and Private Pensions
By at least one measure, the Fed’s repression of interest rates (designed to recapitalize the banks at no direct cost to the Fed or government) has cost savers $10.8 trillion in lost income. Since the majority of savings in the U.S. are in public and private pension plans, 401Ks, and IRAs (individual retirement accounts), the Fed’s repression of interest rates has pushed these income-security savings into risky speculative asset bubbles in stocks, bonds, and real estate, and critically undermined the financial health of pensions by radically reducing their low-risk, safe returns.
Executive Summary
- The commodity complex is already beginning to rise following oil's upside breakout
- Natural gas is trending higher
- Copper appears to have bottomed
- Wheat and coffee's downtrends are ending
- A secular rise in commodities can happen even in the face of slower economic growth and lower demand
If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.
In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend. I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.
This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.
If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.
The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.
As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.
Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…
Understanding the Secular Shift of Capital into Commodities
PREVIEWExecutive Summary
- The commodity complex is already beginning to rise following oil's upside breakout
- Natural gas is trending higher
- Copper appears to have bottomed
- Wheat and coffee's downtrends are ending
- A secular rise in commodities can happen even in the face of slower economic growth and lower demand
If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.
In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend. I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.
This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.
If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.
The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.
As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.
Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…
Total 177 items
by blaggers