In our last note on 8th August I suggested that a sharp correction in markets might be imminent. It indeed was. But more importantly than that: I have been suggesting that Winter is Coming: the collapse of our global economic, political and social systems seems inevitable. I thought the main events might occur from 2018.
But Winter might have already kicked off.
Should we be terrified? No. Winter will inexorably be followed by Spring. And you will see all the elements of Spring emerging in Winter.
Yesterday was a very powerful day according to astrologers with the Great American eclipse, the most significant of its kind in at least 99 years and it is meant to herald much upheaval ahead, but also result in much revelation. The last time there was an eclipse such as this, whose path remained in the US, was 1776. In fact the Declaration of Independence was signed two days after the eclipse.
Rather interestingly last summer when I was in the UK I bought a book about the English Civil War as I felt I knew where things were heading. I found out this week that there was a significant eclipse the day King Henry I died in A.D.1133 which plunged the country into chaos and then conflict.
There is an incredible coincidence of major events and significant eclipses in history. But alas there aren’t many real astrologers in our modern society. But whatever your thoughts about astrology, more and more voices are suggesting that the US might have just entered a civil war. It truly is surreal. And the US is still the epicentre of the global system so this will affect us all.
At times between now and the early 2020s it might feel that the extremists on both sides will determine the direction humanity goes. This has often been true in history. But whilst social media and the media are full of vitriol and hatred, I see a new world building up amongst us. Its like seeing plants and life growing up amongst the trash. Or more poetically, the lotus leaves growing out of the mud.
Discord to War
“The warrior’s approach is to say “yes” to life: “yea” to it all. Participate joyfully in the sorrows of the world. We cannot cure the world of sorrows, but we can choose to live in joy. When we talk about settling the world’s problems, we’re barking up the wrong tree. The world is perfect. It’s a mess. It has always been a mess. We are not going to change it. Our job is to straighten out our own lives.”
Back in early 2015 I wrote this for Dow Theory Letters, yet again warning about the coming social and political breakdown:
“When I attended the Davos World Economic Forum in 2013, there was an air of confidence. I was very bullish about financial markets at the time and this was clear in my writing. The fund I advise was up by more than 100% that year. I didn’t attend this year but a comment by Robert Johnson of the Institute of New Economic Thinking suggested that Davos 2015 was very different: “Very powerful people are telling us they’re scared.” He said that nations are not working, people weren’t talking and they don’t know how to deal with it. He said in one interview that the elite sees increasingly evidence of social instability and violence. He made some headlines when he said specifically that he knows some hedge fund managers who are buying airstrips and farms in places as remote as New Zealand. The Guardian wrote up some of his comments in an article titled “The Nervous Super Rich are Already Planning Their Escapes.”
The problem is clearly that the wealth gap is getting larger – it was reported this week that the number of billionaires rose by over 200 last year. I cannot but think that this will increasingly result in social unrest which will accelerate along different lines – racial, socioeconomic etc. I saw this week that the sequel to To Kill A Mockingbird by Harper Lee is being released soon. Its manuscript was lost for decades.”
If one were a good historian, you might say that we have all the conditions for a revolution in place. A revolution , that is, by the people against the elites. In fact, in our January piece “The Die is Cast” we cite an ex CIA intelligence officer who said the same thing.
If you forget the political personalities for a moment and think about the voters who were gravitating away from business as usual to perceived outsiders like Trump and Sanders in the 2016 election, you might realise that there is also a lot of agreement out amongst the populace. A finance blogger, Michael Krueger, recently suggested that many Americans agree on the following tenets:
1. Trade — Opposition to NAFTA and current “trade” deals such as TPP, TTIP, and TISA have been central to both the Sanders and Trump campaigns.
2. War and militarism — Whether you believe Trump is sincere or not, opposition to Obama/Clinton interventionist overseas wars were key talking points for both Trump and Sanders.
3. The system is rigged — The painful acknowledgment that the U.S. economic system is a rigged scam that fails to reward hard work, and is more akin to a parasitic, predatory oligarchy with very limited social mobility, has been a key campaign theme for both Trump and Sanders. The economy is increasingly dominated by near-monoploy giants who relentlessly push for more power and more profits irrespective of the cost to society, whether that cost be war, poverty or social unrest.
4. Money in politics — The rigged economic system described above aggregates wealth into an increasingly small number of hands. Those hands then buy off politicians and rig the political process. A rigged economy and rigged political system perpetually feeds itself and endlessly grows at the expense of the public like a terminal cancer. Both Trump and Sanders emphasized this problem.
5. Rule of law is dead — Sanders focused on Wall Street bankers, while Trump focused on Hillary and her inner circle of cronies, but the overall point is the same. Rich and powerful oligarchs are above the law. We all know this, but Washington D.C. refuses to do anything about.
But it seems that the people are all squabbling amongst themselves over race, monuments, language and identity. A good historian might say the people are being played – that good old divide and conquer approach. I have no idea. Whatever the reason, the media seems to be focused on the differences and not the similarities.
Yesterday Ray Dalio, a hedge fund manager with a very analytical mind, issued a warning that US society might be too late to fix.
“Average numbers hide the depths of the divisions. For example, by looking at average figures, one might conclude that the United States economy is doing just fine, yet when one looks at the numbers that comprise those averages, it’s clear that some are doing extraordinarily well and others are doing terribly, with gaps in wealth and income being the greatest since the 1930s.
Largely as a function of these economic differences and differences in the principles that people believe most deeply in, we are seeing large and increasingly firm political differences, which are apparent only by looking below the averages. For example, Donald Trump’s approval rating of 35% is a result of 79% support among Republicans and 7% among Democrats (Gallup). Of those who approve of President Donald Trump, 61% say they can’t think of anything Trump could do that would make them disapprove of his job as President, and 57% who disapprove of Trump say they are never going to change their minds on the President’s job performance (Monmouth). Similarly 40% of those polled (PRRI) would favor Donald Trump’s impeachment, which consists of 72% of Democrats and 7% of Republicans, and most of them won’t change their minds.”
At the political level he is absolutely right. There is an immense gulf.
This article in Esquire about white supremacy and playing a Vice video about Charlottesville is very shocking.
Whilst Nazis on American streets is scary, the web is full of accusations that Charlottesville was orchestrated.
“A Charlottesville police officer has come forward to express his anger at being told to “stand down” by the city mayor during violent clashes between protestors. He also claims the protests, which pitched “white supremacists” against members of Antifa, were “set up” to further the agenda of the elites.
“We [Charlotesville police] were ordered to bring the rival groups together. As soon as they were in contact with each other, we were told to stand down. It was outrageous. We weren’t allowed to arrest anyone without asking the mayor first. We weren’t even allowed to stop the driver as he sped away.“
“The event was being set up as far back as at least May and it went like clockwork.”
Perhaps this is all conspiracy theory. I don’t know. But I assure you that this talk is not just limited to one website. What I do know is that extremists on both elements are getting emboldened and the short term risks are that we see further hotspots.
I used the word civil war many years ago but it felt kind of strange to actually say it. Now I am increasingly hearing it being used. Rush Limbaugh, a well known conservative radio host, is the latest to issue a warning:
“America is under attack from within. Our culture, our history, our founding are under the most direct assault I have seen in my life. And I’m sure it’s the same with you. We haven’t seen anything like this. You might even get away with saying that we are on the cusp of a second civil war. Some of you might say that we are already into it, that it has already begun. However you characterize it, though, we are under attack from within. And it’s being bought and paid for by people from outside America, in addition to inside…
If you identify yourself with the Democrats you might have even more reason to listen to this.
The recent document about diversity at Google is another great example of a clash. But again are people’s real views that different? Is there room for dialogue? The immediate reaction of many was to join the bandwagon of shaming the author and saying how sexist technology companies were. And certainly these companies don’t have a very good balance of male/female workers.
Then an amazing thing happened. A number of my friends actually read the document and concluded it wasn’t as bad as they had thought, and actually concurred with one central message: we need diversity of ideas and beliefs and we should stop shaming people who disagree with us.
[You can read the full document here: https://gizmodo.com/exclusive-heres-the-full-10-page-anti-diversity-screed-1797564320/amp]
Here is one such post:
“When that Google bloke got fired, a mix of feelings went through my head, including “he got what he deserved for sending a public memo”, “Was it a firing offense?”. Then I saw Sundar Pichai‘s “CEOspeak statement” and thought, ok Sundar is probably right because I have so much respect for his views. What I did not do, was actually read the memo before jumping to conclusions about the guy who wrote it. Shame on me. But I read it just now, and I am astounded at the political correctness gone amok at Google. Sundar is one of the smartest CEOs on the planet, but his PR algorithm must be signalling an “Uber moment” multiplied by a humongous “virtue signalling” opportunity that was too good to pass up. This is the only explanation for him to have taken the extreme step of firing a guy (as opposed to say a public slap on the wrist) who wrote a mostly balanced memo with a few debatable points. Sundar, you got this one wrong pal, because now you are no longer optimizing for excellence at Google, but for compromise. This is when you became just another corporation. More worrisome, you have now created a culture where your employees will no longer speak truth to power, and given how much power Google has over all of us, you have struck a massive blow against liberty itself. There will be hell to pay.”
I didnt agree with a number of points in the Google article, but that doesnt mean I think it should be censored and the author fired. A number of phrases stood out for me in the 10 page document:
“When it comes to diversity and inclusion, Google’s left bias has created a politically correct monoculture that maintains its hold by shaming dissenters into silence. This silence removes any checks against encroaching extremist and authoritarian policies.”
“My larger point is that we have an intolerance for ideas and evidence that don’t fit a certain ideology. I’m also not saying that we should restrict people to certain gender roles; I’m advocating for quite the opposite: treat people as individuals, not as just another member of their group (tribalism).”
If people actually read the document and then could find the space to have dialogue without being triggered by individual words, I wonder what would happen?
Martin Armstrong, a financial commentator, acknowledges the existence of extremists on both sides:
“Fascism is an authoritarian nationalism, that is characterized by dictatorial power, forced suppression of opposition, and control of industry and commerce. I do not understand how anyone can claim Trump is a fascist. CNN, of course, keeps trying so desperately to create civil unrest. They have come out and said with a headline “Alt-right? Don’t be afraid to call them fascists.” We simply have to stop these stupid labels. That is the first thing we have to do to try to restore some civility.
In London, we have the Telegraph coming out really against CNN with the headline: “Fascism is not Conservatism, and conservatives must make that clear.” I really question what is going on at CNN. It is not the reliable news source, it is becoming a hateful and vindictive network that is trying to create civil unrest. If Trump were truly a Fascist, he should send in troops and shut down CNN. That would be a good fascist move.
Let’s make no mistake here. The White Supremacist rally is taking place now because the standard of living has been diminishing with rising tax levels that reduce the disposable net income of people. That is the root cause of why such rallies take place now in opposition to the leftist rallies that erupted when Trump was elected setting cities on fire – not quite nonviolent. This is all building to a place we do not want to think about.”
This weekend we got confirmation that Steve Bannon, Chief Strategist, is leaving the White House. There are multiple interpretations of this. Some on the left are excited that Trump’s presidency seems to have suffered yet another setback and believe that he will resign or even be impeached at some point. Buthers think that Bannon will be an even bigger force once he is back at Breitbart and can harness the media company’s machinery.
Returning to Ray Dalio, I agree that we have lot of clues as to the short term direction:
“I’m watching how conflict is being handled as a guide, and I’m not encouraged.
History has shown that democracies are healthy when the principles that bind people are stronger than those that divide them, when the rule of law governs disputes, and when compromises are made for the good of the whole — and that democracies are threatened when the principles that divide people are more strongly held than those that bind them and when divided people are more inclined to fight than work to resolve their differences. Conflicts have now intensified to the point that fighting to the death is probably more likely than reconciliation.”
Personally, I can only see these tensions worsening, especially as we go into the 2018 and then 2020 elections. But, our base case continues to be that we will be out of this by 2025. But the green shoots will be seen much earlier, in fact they are already here co-exisiting with all this negativity.
Another Perspective – Renaissance
Not all eclipses are harbingers of war, pestilence and starvation. There was the famous Einstein’s Eclipse of 1919 when Einstein confirmed his theory of general relativity and many others. I like to believe that – if indeed there is any significance to yesterday at all – we are on the cusp of both political revolution and a new renaissance.
I had a surreal moment at the end of last week when I met fellow futurist John L Petersen met for a final coffee near London Heathrow airport before his departure. We had been meeting with futurists and technologists all week. They were unanimously optimistic about the emergence of a new earth. From bitcoin to other decentralised endeavours it seems that a new world is being built around us. Every 30 minutes 5.5 million USD goes into bitcoin according to one source. The new financial system is being created and it doesnt need a middle man who siphons off large transaction fees. Also, inventors around the world are making important breakthroughs. John just met a lone inventor who had a battery technology than was 10X as powerful as lithium ion batteries. Here and there we are hearing reports of low cost energy. And think about the maker revolution thats resulting from 3D printing. A former Wired magazine editor wrote a good book about this https://www.amazon.co.uk/Makers-Industrial-Revolution-Chris-Anderson/dp/1847940676 . The entrepreneurial spirit is bursting out. As John and I were discussing these emerging trends, in the background CNN or Sky News was blaring out more fear and it all suddenly felt like the Truman Show. It wasn’t real. Most people are good people they don’t want to fight over race, identities or politics.
This is an important time of human history to decide. Do you want to be part of the fear and the violence, or do you just decide not to participate? Many of my friends have just moved on and are devoting their lives to collaborating with kindred spirits around the world, often people of different colours and creeds. I have seen their lives transformed almost overnight.
The system is indeed breaking down. The question is where do you direct your attention or energy?
Going Deeper – A Mind Revolution
And amongst all the name calling and fear propagated by the media, many people are also now going deeper and finding a new dimension to their life. Some call this spirituality others suggest a shift in consciousness.
The educator and mystic Krishnamurti said this about society:
“Every day we see or read of appalling things happening in the world as the result of violence in man. You may say, ‘I can’t do anything about it’, or, ‘How can I influence the world?’ I think you can tremendously influence the world if in yourself you are not violent, if you lead actually every day a peaceful life—a life which is not competitive, ambitious, envious—a life which does not create enmity. Small fires can become a blaze. We have reduced the world to its present state of chaos by our self-centred activity, by our prejudices, our hatreds, our nationalism, and when we say we cannot do anything about it, we are accepting disorder in ourselves as inevitable. We have splintered the world into fragments and if we ourselves are broken, fragmented, our relationship with the world will also be broken. But if, when we act, we act totally, then our relationship with the world undergoes a tremendous revolution. After all, any movement which is worth while, any action which has any deep significance, must begin with each one of us. I must change first; I must see what is the nature and structure of my relationship with the world—and in the very seeing is the doing; therefore I, as a human being living in the world, bring about a different quality, and that quality, it seems to me, is the quality of the religious mind.”
Tolstoy once famously said that everyone wants to change the world, but no one wants to change themselves. So before we get angry at others, and at the world, its also an important time to look within.
The important revolution here is the Mind Revolution.
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