This election was lost four and five and six years ago not this year. They dident start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the driest little spot. But he dident know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through the poor fellow’s hands. They saved the big banks but the little ones went up the flue.
Tulsa Daily World, Dec. 5, 1932
Rogers could have written that column yesterday, don’t you know. When you think about it, you come away certain that smart people have this compulsion to be stupid every hundred years or so. I take some comfort in the notion that no matter what, we do tend to survive.
Now, about coming back stronger than ever, I’m not so sure. A great nation is allowed a certain number of screw ups. But eventually the burden of subpar leadership sends it into something less than its former self. I’m thinking about Rome, here. Nobody knew it then, but it was downhill for a very long time after Marcus Aurelius, the empire’s last good leader, passed from the scene in 180 AD.
Charles Hugh Smith publishes www.oftwominds.com, the seventh most read alternative financial blog in CNBC’s survey. Smith has recently been writing a series on the collapse of nations. Collapse, he says, is a process that gets underway when certain factors are present in the system. These are his nine dynamics of decay:
- Complacency and intellectual laziness
- Profound political disunity
- Rise of unproductive complexity
- Those bearing the sacrifices opt out/quit
- Decay of effective leadership
- Rise of bread and circuses social welfare and entertainment to distract/placate restive citizenry
- Decline of wealth-producing capacity—status quo living off financial trickery
- Sclerosis—status quo controlled by vested interests
- Resource depletion/environmental damage
Michael Graham touched on many of these in his book, The Fall of the Roman Empire. Even a cursory look will tell us that these dynamics are in play around the globe today.
Smith’s series on collapse is worth taking seriously. It is a process, not an event, that usually takes many years to completely play out.
The financial markets are presently signaling a severe bear market, and the most likely form of it is a crash that bottoms with the 7 year cycle due to bottom a year from now, then a rally like the 1929-30 bear market rally, and then a slow motion withering away of the economy that could take a decade before it made a final bottom.
This would be very similar to the collapse in the thirties, when Will Rogers was entertaining Americans with his homespun commentary. The difference is that the trend today is one degree greater, so we will need to be prepared for a very long subpar era.
How, exactly to do this? I don’t know. Seneca got up every morning and prepared himself to lose everything, figuring if he could accept that outcome life would not be troublesome, however it turned out.
A sad note:
Dick Diamond, long time friend and mentor, passed away last week. Too good a guy went too soon. Dick was the quintessential journeyman trader. No fuss, no big ego, just amazing consistency. For over fifty years, he made money almost every day the market was open. I’d like to be that good some day. Rest in peace, good friend.