"Generation Zero - The Inconceivable Truth" - the movie

[jhc811]

Well said John on that 5-Apr-2010 posting. It really makes a lot of sense to me. Nick Guarino and you have pretty much similar future outlook which I don't see anyone else really comes close to that outlook which I pretty much agree with. Mish Shedlock have similar view as this but at somewhat lesser extent.

Again it is no question that "cash under mattress" and a simple rural living with growing fruits orchard/veggie gardens away from big/major cities are our best options. Also it is very important to be debt-free as much as possible.

[thomasglee]

In today's weblog, you wrote:

So now we can translate the split between Generation-X and the Boomers into a split between the Democrats and the Republicans. Basically, the Republicans have adopted the "Silent culture," while the Democrats have adopted the "Boomer counterculture."

We can also see this in how differently each party campaigns. The dems will outrightly claim racism, hypocrisy, etc., whenever a repub does something untoward, but when a democrat does the same actions, the repubs typically give the dem a pass. Sure, the repubs think they're "taking the high-road" when they do this, but in reality, they are being passive wonks that allow others to walk all over them. That's why it is - generally - so hard for them to win over the public when it comes to policy matters. They're too passive.

[9_eU4oMpoNP]

John,

Whenever you venture into US politics, you seem to abandon the principles that drive your analysis. The more you talk US politics, the closer you get to jumping the shark. Focus on your principles, which ignore the cacophony of political distraction.

[John]

> Whenever you venture into US politics, you seem to abandon the
> principles that drive your analysis. The more you talk US
> politics, the closer you get to jumping the shark. Focus on your
> principles, which ignore the cacophony of political distraction.

What principles do you believe that I'm abandoning? Isn't analyzing
the effects of generational trends on politics something that I do all
the time? I really don't understand your criticism.

Also, I find this "active/passive" analysis really fascinating.

John

[Marshall Kane]

oth the Dems & the GOP have been aware of GD since 1992 does that not open up the possibility that they recognized 9/11 as the Regeneracy event (as it was indented by OBL), and our bi-partisan leadership decided to intentionally limit the scope of the war? Or were there still enough Silents in the administration due to the increases in life expectancies? And so Gen-X cannot help but bring the world to utter destruction once again as our Lost ancestors had done?

The potential impact of politicians embracing generational theory is a fascinating one. On the jacket of my copy of Fourth Turning there are quotes from some of the most prominent politicians of the time - I recall Newt Gingrich and Al Gore offhand - praising the book as revolutionary. There is even a review claiming that Fourth Turning was the historical equivilient of Origin of the Species. Why didn't these politicians wholly embrace the generational world view? A simple answer could be that these are busy people who don't have the time to fully process these ideas and they quickly moved on to the next "fascinating" or "revolutionary" book on political theory.

But one could easily develop a nice conspiracy theory regarding the Bush administration guiding the war on terror based on a secret reliance on generational dynamics. They directing the focus on the war on terror away from Afghanistan to Iraq, knowing that a country in an awakening era was the best chance of success. Then, over confident of their "secret" knowledge, they go into the war unprepared.

Now, I have no reason to believe the above scenario was the case, but I think the example does illustrate the power of generational disposition. Boomers and Xers make up the most well-off, educated population in history. Our leaders went into the world with the latest "knowledge" of psychology, sociology, etc. woven into nearly every subject. However, rather then allow this advanced knowledge of human nature to evolve into wisdom, it only serves to feed the arrogance of their "prophet" or "nomad" natures to make them more overconfident and more inclined to be reckless. Hell, I'm sure there are people who read this very site who convince themselves that knowledge of generational theory alone gives them an automatic advantage. Look at those in these forums who are looking to use this knowledge to game the market rather then take cover.

f this is true that we are about to see GD emerge as a well accepted or even widely known theory, doesn't this present the possibility that the cycle will end?

Even if it became widely know I still think you'd have enough people who would either dismiss it or try to use the knowledge to their advantage.

For the record, I think the theory of catastrophic manmade global warming is a farce; however, look at the period of time where the theory was widely accepted. We were bombarded by tales of disaster every day. Children where indoctrinated in schools. Governments passed laws. Still, when it came down to it, how many people who fully swallowed the theory actually made serious sacrifices to prevent it?

I think the best case scenario - for future generations at least - is for the ideas to get out there now, so that when the sh*t hits the fan enough people look around and say something like "Son of a %&@$!!! That Xenakis F**er was right..."

Then, the big question is, can the survivors convince their kids of generational dynamics....

[xakzen]

...
But one could easily develop a nice conspiracy theory regarding the Bush administration guiding the war on terror based on a secret reliance on generational dynamics. They directing the focus on the war on terror away from Afghanistan to Iraq, knowing that a country in an awakening era was the best chance of success. Then, over confident of their "secret" knowledge, they go into the war unprepared.

Problem with this synthesis is that S&H only presented one time line that of the American/Western European history. It was Xenakis in his Generational Dynamics book that proposed the alternative time lines for different cultural histories just in the last ten years.

Now, I have no reason to believe the above scenario was the case, but I think the example does illustrate the power of generational disposition. Boomers and Xers make up the most well-off, educated population in history. Our leaders went into the world with the latest "knowledge" of psychology, sociology, etc. woven into nearly every subject. However, rather then allow this advanced knowledge of human nature to evolve into wisdom, it only serves to feed the arrogance of their "prophet" or "nomad" natures to make them more overconfident and more inclined to be reckless. Hell, I'm sure there are people who read this very site who convince themselves that knowledge of generational theory alone gives them an automatic advantage. Look at those in these forums who are looking to use this knowledge to game the market rather then take cover.

I would have to agree with you here. Not only on a personal note for which my GD knowledge only helped me to demonstrate the principle of Maximum Ruin, but I see it in the elite smugness that they have everything under control.

[The Grey Badger]

How do you know the talking heads are talking nonsense?

Their lips are moving.

[9_eU4oMpoNP]

What principles do you believe that I'm abandoning? Isn't analyzing
the effects of generational trends on politics something that I do all
the time? I really don't understand your criticism.

Also, I find this "active/passive" analysis really fascinating.

John

The main principle that we should look to generational dynamics, not inter-party politics, as a guidepost.

I find it strange for you to say that current events are politicians' or political parties' fault, and then criticize particular politicians or political parties. Similarly, I find it strange that you say that generational traits are dictated by history, and then criticize particular generations. Why criticize someone for something that is not in their control?

[VinceP1974]

What principles do you believe that I'm abandoning? Isn't analyzing
the effects of generational trends on politics something that I do all
the time? I really don't understand your criticism.

Also, I find this "active/passive" analysis really fascinating.

John

The main principle that we should look to generational dynamics, not inter-party politics, as a guidepost.

I find it strange for you to say that current events are politicians' or political parties' fault, and then criticize particular politicians or political parties. Similarly, I find it strange that you say that generational traits are dictated by history, and then criticize particular generations. Why criticize someone for something that is not in their control?

The only time I observe that pepole make such a complaint about occasional visits to Politics-Land it's from those on the Left. Which is odd since they have made politics out of everything.

[mannfm11]

Alan Greenspan was born in the 1920's and he had a larger role in this mess than anyone. The main dancer in this game was one Robert Rubin, who is a borderline boomer (Wiki: Born August 28, 1938). These guys blew the bubble along with Franklin Raines. John is right that the bubble predated the repeal of Glass-Stegal, as the bubble was put into motion in 1933. One thing that causes a repetitive credit cycle is the compound interest equation, which grows faster than the nominal GDP and the need for new debt escalates in order for the economy to run in place.

Larry Summers is a boomer, connected as the son of Robert Summers, economist at Wharton and nephew of Paul Samuelson of Nobel Economics Prize and college textbook fame. He had a huge role in this matter.

The editorialist wanted to know solutions the T-party had. The editorialist thinks that drinking another bottle of whiskey is the way one gets sober. You can only do this so many times before the Whiskey kills you. The whole thing has to deflate and one way or the other, total financial destruction of bankruptcy or the deflating destruction that will cause a lot of bankruptcies, but in the end allow the system to start anew are where we are strung. The Democratic way is the attitude that we are going over a cliff so hit the accelerator and see if the car can fly. The Republican way isn't much better. The US had a lot of collateral to burn up over the last 70 years and both parties saw we burned every bit of it. The systhetic CDO's were nothing more than invented collateral to generate even more leverage. The only collateral left is the war machine and the fact that the US has been the driver of demand and the backbone of every export economy on Earth.

Here are a couple of links that are very informative about what happened in the New Deal. One might get some understanding why the Treasury can bail out Mexico, bail out Bear and the President goes to war when he feels like it.

http://www.scribd.com/doc/15214171/War- ... -Schechter

The link to the actions of FDR along with supporting actions that allowed for moving Federal Power into the states goes to a plan devised by Rockefeller. Schroder makes the connection and has the backing of people that I wouldn't call political nuts, like the former Chief Counsel of the Federal Reserve bank of Cleveland, Walker F. Todd. One of the supporting documents is Senate Report 93-549. http://www.scribd.com/doc/21596845/Senate-Report-93-549

A third document that I haven't read, but relates to the subject is Government by Permanent Emergency. http://www.scribd.com/doc/23244467/Gove ... -Emergency

Murray Rothbard wrote about Wilson and the Federal Reserve. He says Wilson was convinced that the nation was going to be under the massive influence of big corporations and took actions to enable big corporations to function effectively. FDR did even more in this direction. I might note that Wilson was out of Princeton New Jersey and FDR was Governor of NY and also a World War I bureaucrat, I think Secretary of War.

My point out of all of this was that the acts of FDR and the establishment of the Federal Reserve were the power behind creating the largest financial bubble in the history of the world. A long credit cycle only goes about 70 years, none have ever gone any longer to my knowledge. The ceasing of convertibility of currency and the original act of creating a currency that leveraged the supply of gold many times created a Mecca for a huge debt bubble to occur. The next step was to develop collateral to feed the bubble and housing met the bill.

Today there are a lot of absurd financial ideas. For one, the stock market makes 9% a year forever. Only if it is priced to make 9%. A 9% bond priced to yield 3% will only yield 3% regardless of what the coupon originally was. Next is the penson plans based on the 9% return, retirements that have next to nothing in them. Next is the government can spend us t prosperity. Next, real estate never goes down and deflation is impossible with paper money.

One thing I am beginning to understand is the amount of money in accounts has very little to do with the amount of currency printed or perceived currency, as very little currency was printed in relation to the exchange of liquidity between the banks and the Fed over the securities purchased by the Fed. The real money in a bank or the system is limited by the good assets on the books of the banks. The exchange between the banks and the Fed did nothing to the balance sheet of the banks as a sum much greater than what was supposedly printed by the Fed was already owed by the banks. The Fed did nothing but change the nature of the money behind the deposits. Thus we have a systematically shrinking asset base in the banking system along with a shrinking asset base in the near banks as well. If you haven't been following it, the liquidation of commercial paper in the system has been huge over the past 3 years. The total deposits in money market accounts has decline almost $1 trillion over the past 12 months. M-2 has been falling most weeks and fell $38 billion last week. This is not money going into markets, but money assets disappearing in the form of commercial paper and most likely consumer debt. We have reached the likely end.

It is likely that had there not been some kind of bubble blown, the sluggish economy we had in the first half of the 1990's would have stayed that way. But, we wouldn't have had the fictions that have much of the middle class hopelessly stuck in the stock market and now chasing junk bond yields as investments.

I am not writing to dispel the generational theory, as I think there is a link to all the cycles and whether the chcken made the egg or the egg made the chicken is not important. A fresh credit cycle creates a prosperity that floats most ships. In the later stages one always has to swim up stream. Most boomers are lazy, but the younger generations seem to not know how to do anything but scam money. I would venture 40% of the people under 40 scarcely know how to use a screw driver and most have never mowed their own lawns.