Tuesday, January 20, 2009


I thought this was a very insightful article from Eric deCarbonnel:

Hyperinflation will begin in China and it will destroy the dollar

But I must admit that I enjoyed the discussion in the comments below the article almost more than the article itself. Mish and Eric had a nice exchange and many others as well.

I think the appropriate lesson to take away from this piece is just how infinitely complex and chaotic these intertwined systems really are. And by "chaotic", I mean in terms of Chaos Theory, where the apparent chaos is only within our narrow view.

If you haven't read this masterful piece by Krassimir Petrov yet, you are in for a treat:

Chaos & Order - A Breakpoint for the Global Monetary System

I think this article delivers a nice primer on the most useful way to view the unfolding crisis. And that is from the Chaos Theory perspective. You can see also my posts on Fractals, [1], [2] and [3].

When you look too closely at complex systems their movements appear chaotic. But as you step back, patterns start to emerge. And through these patterns you can predict the end point regardless of the chaotic movements in between.

An analogy I like is that the various aspects of this crisis, derivatives, trade imbalances, banking insolvencies, currency problems, etc... are like trees in a forest. You may be an expert on a specific kind of tree. You can learn almost everything about that tree and how it interacts with other trees in the forest. But unless you back away and stand atop the adjacent mountain, you may not see the raging forest fire that is heading your way.

Okay, so it's not a perfect analogy, but I like it.

Also, on the recommended reading list, I have become a fast fan of Hubert Moolman of South Africa. Check out his latest article, Fake Money, Dead Money and Fake Leaders. Also Gold Is Money and more which can be found on his blog.

Lastly, I recommend the latest Gerald Celente interview by Jim Puplava if you haven't yet listened to it.



Ender said...

FOFOA, I look forward to the next article.

Ivo, What's up with your website? Everything ok?

Ender said...

FOFOA, Second thoughts, you remember that snail's pace? Let time perform it's magic ... If there's always music in the background, at what point does the world detect that there is nothing but silence?

Fellow observer, the music has stopped. What might we do now?

There is no time but the present.

FOFOA said...

Hi Ender,

I often think on your snail's pace. But I still believe that sometimes things happen like lightning. It's hard to know what's just over the horizon. I'm watching too.


ps. RickAck has a lot of responses posted to his call-out in case you haven't seen them. Link

FOFOA said...

When the music stops, you grab a chair (unless you have already set aside a golden chair with your name on it, in that case you just relax and watch others scramble for chairs).

SatyaPranava said...

btw, i read deCarbonnel daily. he's one sharp guy and his theory that hyperinflation will start in china and be exported here is very intriguing, as it sounds quite plausible. especially when one considers that deflation was started here in teh US during the Great depression and exported out (intentionally?) and consequently led to the concentration of wealth and power here as the world's largest creditor nation called in its debts.

it'll be interesting to see IF china does that, or if it even needs to.

i sometimes feel like we're the criminal (i doubt there are ANY "good guys" in this war) near the end of the movie, and the sheriff (corrupt, yet rhetorically standing for his town) has shot the man in black (the US). He watches the man writhe in pain, attempting to scramble on the floor for his (our) gun, etc. Then just when it seems like the guy has a chance, the sheriff delivers the final blow. i wonder if this is what china is waiting for. to see us really writhe and scream in utter pain.

the sad thing, IMHO, is that even if our country's oligarchs are replaced on some level, many of the "bad guys" here are the ones who know what's coming, will be better prepared than those to whom they're lying, and thus, probably still in a significant position of power in the "new" system. intriguing to contemplate the global chessboard (esp when reading Brzezinski's take on it!).

btw, i'm just feeling inspired tonight...must ahve been the farmers' market and all that beautiful local, beyond-organic food, music, and people that nourish the soul...then again, it could just be that i'm a raving lunatic progressive/libertarian who's easy to please ;)

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