Podcast

Prediction: Things Will Unravel Faster Than You Think

Friday, October 1, 2010

Executive Summary

• We do not live in a linear world
• Complex systems are inherently unpredictable (sort of)
• Accepting “what is”
• Banking on perception
• The dawning of awareness of Peak Oil, sovereign insolvency, & currency debasement
• Hope alone is a terrible strategy
• What you should do

Part I

The currency wars have begun, and the implications to world stability and wealth could not be more profound. Fortunately, all of my long-time enrolled members are prepared for this outcome, which we’ve been predicting here for some time.

When pressed, the most predictable decision in all of history is to print, print, print.  So I can’t take credit for a ‘prediction’ that was just slightly bolder than ‘predicting’ which way a dropped anvil will travel; down or up?

The only problem is, widespread currency debasements will further destabilize an already rickety global financial system where tens of trillions of fiat dollars flow daily on the currency exchanges.

Here’s a recent sampling of news items demonstrating the fever pitch that is being built:

Well, the Fed held its meeting and dutifully released a very measured statement, as expected by those who are familiar with the way the Fed adopts a ‘steady as she goes’ policy this close to an election.

Truthfully, I don’t see anything exceptional in the Fed statement, but the markets responded quite strongly to the release.

They started with the usual ‘not so hot, but not too terrible’ outlook that has dominated their views for quite some time:

One of my bigger ‘learnings’ from the writing of the book was the deepening of my appreciation for the utter importance of energy to our way of life and to the process of creating (and maintaining) wealth.  I spent time reacquainting myself with the laws of thermodynamics and came away with a far more focused view of the predicament in which we find ourselves.