Should You Fear AI?

 Yes but not the way it is presented. AI will not threaten and annihilate us. We will voluntarily give it control of everything and when it's done it will be in charge. With or without consciousness, it won't matter. The higher intelligence will by nature be in charge. This is unavoidable. Monkeys do not run the world. They can't. Likewise, we simply won't be able to run the world that AI will build / organize. It will be too complex for us. We can deep think, talk about alignment all we want. Brains a billion times faster than us will be in charge because... Well, how much time do we spend explaining to monkeys why we and not they are in charge? 

 PS: As I watch two birds fighting in the garden, I suddenly feel like AI! One clearly wants to impose its will on the other. Do I feel like intervening? Not really. Their fight is not my concern. They can fight all they want for all I know. One can enslave the other. I will do nothing...

PS2: Kill switch? No, please! I just wrote an important letter in 10 minutes instead of two hours thanks to AI. Soon, it will be everywhere doing everything for us. Can we live once again like one hundred years ago? Yes, sure. But not in the modern world we are used to.

Authored by James Rickards via DailyReckoning.com,

Artificial intelligence (AI) is all the rage these days.

You can’t read headlines or turn on the news without hearing about how machines with vast computing power, access to billions of books and documents, the ability to teach themselves and blinding processing speeds are now poised to take over the world.

Last night, Fox News host Tucker Carlson even had an in-depth conversation about AI with Elon Musk. Musk didn’t have an optimistic take.

I’ve been studying AI and its potential for years.

I recently spent a couple of days visiting with the world’s third-fastest non-government supercomputer as part of a project to apply generalized superintelligence and AI to national security tasks.

How advanced is AI getting? How close is it to approaching a rough parity with human intelligence? And what dangers does it pose to humanity?

We Can Just Pull the Plug — for Now at Least

Experimenters now envision machines taking on a life of their own and attacking humans and civilization.

But it’s important to remember that if the machine goes berserk, you can just pull the plug.

Apologists for AI capacity claim that pulling the plug won’t work because the AI will anticipate that strategy and “export” itself to another machine in a catch-me-if-you-can scenario where disabling one location won’t stop the code and algorithms from popping up elsewhere and continuing to attack.

Maybe.

But there are all kinds of logistical problems with this, including the availability of enough machines with the processing power needed, the fact that alternate machines are likely to be surrounded by firewalls and digital moats and a host of configuration and interoperability issues.

We need to understand these constraints, but for now, just pull the plug. In fact, there are a number of safeguards being proposed to limit the potential damage of AI while still gaining enormous benefits.

These include transparency (so that third parties can identify flaws), oversight, a weakened form of adversarial training (so the machine can solve problems without plotting against us in its spare time), approval-based modification (the machine has to “ask permission” before activating autonomous machine learning), recursive reward modeling (the machine only moves in certain directions where it gets a “pat on the head” from humans) and other similar tools.

Of course, none of these safeguards works if the power behind AI is malignant and actually wants to destroy mankind. This would be like putting atomic weapons in the hands of a desperate Adolf Hitler. We know what would have happened next.

James Bond With AI

The solution in that case would be more political, forensic and defense-oriented. Intelligence gathering would play a huge role. Of course, that evolves quickly into a machine-versus-machine intelligence war of collection and deception.

Imagine James Bond with a hyper-computer instead of a Walther PPK. The latest developments in AI and GPT (generative pre-trained transformers) put us squarely in a brave new world.

Investors need to be careful about relying on GPT systems for financial advice, despite their enormous processing power. The output is never better than the inputs and the market inputs are littered with bad models, false assumptions, poor forecasting records and biases.

AI is already being programmed with woke ideology, for example. You can imagine the dystopian future that a woke superintelligence could create.

A Woke 1984

You’re probably familiar with George Orwell’s classic dystopian novel Nineteen Eighty-Four; (it’s often published as 1984). It was written in 1948; the title comes from reversing the last two digits in 1948.

The novel describes a world of three global empires, Oceania, Eurasia and Eastasia, in a constant state of war.

Orwell created an original vocabulary for his book, much of which is in common, if sardonic, usage today. Terms such as Thought Police, Big Brother, doublethink, Newspeak and memory hole all come from Nineteen Eighty-Four.

Orwell intended it as a warning about how certain countries might evolve in the aftermath of World War II and the beginning of the Cold War. He was certainly concerned about Stalinism, but his warnings applied to Western democracies also.

When the calendar year 1984 came and went, many breathed a sigh of relief that Orwell’s prophesy had not come true. But that sigh of relief was premature. Orwell’s nightmare society is here today in the form of Communist China…

1984 Comes to China

China has most of the apparatus of the totalitarian societies described in Orwell’s book. China is working hard on AI while using facial recognition software and ubiquitous digital surveillance to keep track of its citizens. The internet is censored and monitored. Real-life thought police will arrest you for expressing opinions opposed to the government or its policies.

Millions of Chinese have been arrested and sent to “reeducation” camps for brainwashing (the lucky ones) or involuntary organ removal without anesthetic (the unlucky ones who die in excruciating pain and are swiftly cremated as a result).

While these atrocities are not going to happen in the U.S. or what passes for the West these days, the less extreme aspects of China’s surveillance state could well be.

And while you might not be arrested for expressing unpopular opinions or challenging prevailing dogmas (at least not yet), you could face other sanctions. You could even lose your job and find it nearly impossible to find another.

Censorship

You can certainly be banned from social media. Anything seems to go on social media (primarily Facebook, Twitter, Instagram, Snapchat, YouTube and a few other platforms) — unless you’re a conservative personality or politico. That’s where the censorship begins.

Many conservative social media participants have had their acco‌unts closed or suspended, not for threats or vulgarity but for criticism of “progressive” views (albeit criticism with some sharp edges).

Meanwhile, those with progressive views can say almost anything on social media, including the implicit endorsement of violence. But nothing happens.

Other conservatives report being the targets of “shadow banning.” That’s where your acco‌unt is open and seems to operate normally, but unbeknownst to you, much of the network is being blocked from seeing your posts and popular features such as “likes” and “retweets” are being truncated and not distributed.

The problem is the trend is moving very quickly in this direction and it’s difficult to stop. And sophisticated surveillance technology to monitor citizens is already in place…

“Show Me the Man and I’ll Show You the Crime”

For example, cameras with the latest surveillance technology can spot and match millions of faces in real-time with an accuracy rate of over 99%. They’re touted as anti-terrorism and anti-crime tools, which they certainly are.

But as Stalin’s ruthless secret police chief Lavrentiy Beria said, “Show me the man and I’ll show you the crime.” It’s easy to see that power being abused to target everyday citizens.

(By the way, Beria would ultimately prove his own point, as he was later arrested and executed for treason).

The problem is once the bad actors start populating the literature with misleading information and developer biases infiltrate the code, it’s clear that AI can be an instrument of tyranny.

In all, AI is definitely something to keep an eye on, and we should be asking important questions. But we shouldn’t worry about it taking over the world anytime soon.

We should instead worry about becoming like Communist China.

A Pyrrhic End To 130 Years Of Vicious Bad Money And Banking Crises

  A fascinating overview of 130 years of monetary experiments.

  How close are we to the brink? Probably less than a year or two!

Authored by Brendan Brown via The Mises Institute,

The original vicious circle starts with inflationary interventions in an up-to-then well-anchored monetary regime.

Consequent asset inflation spawns a banking crisis. That leads to the installation of anticrisis safety structures (one illustration is a novel or enhanced lender of last resort). Alongside a possible monetary regime shift, these damage the money’s anchoring system. A great asset inflation emerges and leads on to an eruption of another banking crisis, devastating in comparison with the first.

An array of additional safety structures is put in place which makes the now-bad money worse than before. After a long and variable lag, a long and violent monetary storm means the safety structures fail, a banking crisis again erupts but this time milder than the previous.

Then a further tinkering with the safety structures causes money to deteriorate even more in quality. Another shift in monetary regime coincidentally does much additional damage. Consequently, in time, a new crisis erupts much worse than the last one.

The safety engineers do more work, causing yet more damage to the mechanisms essential to sound money. But now the safety structures are so pervasive and strong across the banking industry that there is widespread belief that bank crisis eruptions will be smaller or, more likely, totally repressed.

Subsequent events demonstrate those beliefs to be hollow. There is a new round of safety structure elaboration leading to further monetary deterioration. Regime officials declare the end of bank crises.

The cumulative economic cost of this vaunted triumph over bank crisis is an advance of monopoly capitalism and monetary statism that throttles the essential dynamism of free market capitalism. Malinvestment becomes cumulatively larger. Living standards in general suffer. The severely ailing money which subsists is beyond any cure except the most radical.

Let’s fit the above abstract series of vicious bad money–bank crisis cycles to the most recent 130-year history of US money.

At the start there were the inflationary interventions by US administrations in the two penultimate decades of the international gold standard, overpowering for sustained periods the “checks and balances” of that regime.

Murray Rothbard highlights these interventions in his US monetary history book - the first intervention under the “Billion Dollar Congress” of 1889–91 and the second from 1902–7 under Secretary Leslie Shaw who aimed to create a virtual central bank within the Treasury by deploying the huge cash balances of the federal government. The results were the Panic of 1893 and then the epic crash of 1907 followed by a recession.

These financial system convulsions and the related economic slumps were decisive events behind the creation of the Federal Reserve in 1913. Its advocates promised that an elastic currency, a state-run clearing house, and a monopoly of note issuance would mean the end of episodic banking crises.

The true source of these crises, however, were the preceding episodes of monetary inflation, and the scope for this crisis just got a lot worse. The international gold standard disintegrated at the outbreak of World War One. Demand for monetary gold in the belligerent European countries collapsed as governments there sequestered the yellow metal to pay for imports.

Beyond that wartime experience, the launch of the Fed destabilized the demand for monetary base. The novel provision of lenders of last-resort facilities and, more generally, discount window-access to member banks diluted the perceived special qualities of the monetary base (as means of payment and store of value) essential to its enjoying strong, broad, and stable demand despite its constituents bearing no interest. These “super money” qualities are crucial to monetary base’s role in the solid anchoring of money.

In the wake of the immediate postwar depression in 1920, during which no banking crisis erupted, opinion was prevalent that the institution of the Federal Reserve meant no more systemic bank runs and panics. Correspondingly, individuals saw less reason to hold large amounts of cash or types of deposits that were backed by large amounts of cash, gold, or reserve deposits. Hence, though monetary base growth seemed low and stable through what Milton Friedman misleadingly describes as “the high tide of the Federal Reserve” in 1922–27, monetary conditions were, in fact, highly inflationary. This did not show up in average consumer prices in that the economic miracle of the second industrial revolution meant there was a powerful natural rhythm downward of costs in tune with rapid productivity growth.

The result: a great asset inflation and then a subsequent bust, featuring three back-to-back recessions which together formed the so-called Great Depression; the last two of these were marked by convulsive waves of bank failures. This culminated in the New Deal shift of monetary regime, including exit from gold, deposit insurance, and swathes of new bank regulations. The bad money of the 1920s got a lot worse - amidst further dilution of its base’s qualities and a vast expansion of the US monetary base from 1934 to early 1936.

The interlude of wartime inflation and subsequent economic miracle in the US, Europe, and Japan for long stages meant that the vicious bad money–bank crisis circle was in suspense until well on into the “greatest peacetime inflation” (from the mid-1960s to the start of the 1980s). Fast-forward to the eruption of the US banking crisis at the start of the 1980s as the bubble in lending to Latin America (a key symptom from the mid-1970s’ asset inflation) burst. The Fed’s and Treasury’s rescue of large US banks ended the brief US monetarist experiment of targeting the monetary base. Dollar devaluation fueled by Fed inflation following the Plaza Accord in 1985 spawned an asset inflation culminating in the savings and loan debacle and banking crisis in Japan, France, and Scandinavia.

By the early- to mid-1990s, recent examples of the Fed and US government assisting banks in crisis had further diluted the perceived qualities of the monetary base. In consequence, sound money, which depends on a functional monetary base whose supply is highly restricted, had become even more remote. Coincidentally, a shift in US (and European) monetary regime was under way, to the so-called 2 percent inflation standard, with the Fed abandoning any remnants of money supply targeting.

All this led on to a virulent episode of monetary inflation, featuring most directly asset inflation which became the source of the next great banking crisis in 2008–12. A swathe of new banking regulations followed. These came in combination with “monetary reforms”—crucially including interest paid on reserve and quantitative easing—which though ostensibly designed to fortify the banking system, in fact, caused already bad money to become even more unsound. Hence, the reforms laid the foundation for further banking crises which erupted in the aftermath of the great monetary inflation during the pandemic and the onset of the Russia-Ukraine war.

The response to this most recent banking crisis: “too big to fail” extended to deposits of all banks, at least those deemed by highly politicized opinion to be of “systemic relevance”; speculation about vastly increased deposit insurance; and promised new regulations across medium and small banks. The net consequence: a further dilution of any remaining special qualities of reserve deposits.

Reconstituting a functional monetary base as essential to a sound money system would now require radical reform. Money is set to deteriorate in quality yet again—more statist, more regulation, less competition amongst the institutions which produce it in its various forms for the public.

Could state-administered safety structures in the banking system now become so omnipresent that the next asset inflation would not culminate in crisis?

Essential flaws of regulation and the likely virulence of future asset inflations make that outcome unlikely.

Meanwhile, expect official silence about the cumulative costs of the anticrisis “infrastructure” whether in the form of advancing monopoly capitalism, reducing economic dynamism, ever-worse malinvestment, bigger government, and ever-more pervasive crony capitalism.

Despite Relentless Propaganda, Climate Change Skepticism Is Growing; New Polls Show

   From the early 1990s, we've had 12 years to do something before the catastrophe. Can you make it sound more like propaganda than this?

  The fact is that we have no clue how much global warming there is, how much is part of a natural cycle and what is our role in it. 20%, maybe? Almost exactly the same as the uncertainty in the data. Well, you have to find proof if you want funding for your project and consequently, scientists do find some, kind of! Don't they need to put food on the table too?

  What better example of science fitting the political agenda? Activist politicians and the people behind want control and need regulations for this purpose. Warming or no warming it doesn't even matter: the climate is changing, right?

Authored by Paul Joseph Watson via Summit News,

Two recent polls have found that despite relentless propaganda promoting the man-made global warming narrative, climate change skepticism is growing globally.

A survey conducted by a group within the University of Chicago asked Americans whether humans were causing all or most of climate change.

Whereas 60 per cent held this belief five years ago, that figure has now slumped to 49 per cent.

A recent IPSOS poll which covered two-thirds of the world’s population also found that nearly four people in every 10 believe climate change is mainly due to natural causes.

“Perhaps the most surprising statistic from the Energy Policy Institute at the University of Chicago (EPIC) survey is that 70% of Americans are unwilling to spend more than $2.50 a week to combat climate change,” writes Chris Morrison.

“Nearly four in 10 Americans said they were unwilling to pay a couple of dimes. Despite decades of relentless green doomsday agitprop designed to corral populations into living under a collectivist Net Zero-ordered society, it appears that the vast majority of Americans are unwilling to pay even the chump change in their back pockets to stop the climate changing.”

Such skepticism is quite frankly astonishing given that the ‘official narrative’ on man-made climate change has been vehemently amplified by every single major government entity, corporation, media outlet and cultural institution in existence.

The fact that ‘the regime’ is still struggling to convince huge numbers of people that climate change is both the fault and humans and representative of an existential threat represents a massive failure of re-education and brainwashing.

As we highlighted yesterday, social media giants are now increasingly characterizing any skepticism of climate change as a forbidden opinion.

TikTok has become the latest platform to announce that any content challenging the sacred dogma of global warming will be ‘fact checked’ and removed.

The Great COVID-19 Vaccine Bribe

  How do you create an artificial pandemic when you don't really have one?

  How about bribing doctors to vaccinate as explained below or bribing hospital to test dead people whatever the cause of death, and count as Covid death whoever test positive while offering "compensations" for Covid patients?

  All these techniques were extensively used and abused to manufacture a pandemic out of a flu spike which was no more exceptional than what happens every decade or two on average. A job well planned and executed at the highest level.

Authored by John Leake and Dr. Peter A. McCullough, MD via Courageous Discourse (emphasis ours),

Many readers of this Substack have doubtless wondered why their “health care providers”—i.e., doctors, repeatedly exhorted them to get the COVID-19 vaccines and boosters. In my extended social circle, I heard many reports of doctors being downright pushy about it—as though getting the COVID-19 vaccine was the single most pressing matter of medicine and health.

(Steve Heap/Shutterstock)

Even patients who’d recently recovered from COVID-19 were urged by their doctors to get the shots, as were patients who had bad reactions to the first injection.

For a long time, Dr. McCullough and I wondered if these doctors really were that brainwashed, or was there some other explanation for their zeal?

A few days ago, fellow Substack author, Tessa Lena (Tessa Fights Robots) published this document that was apparently circulated to doctors with patients insured by Anthem Blue Cross and Blue Shield Medicaid in the state of Kentucky.

The document raises a number of intriguing questions. I wonder: How many members might be registered in a given practice—that is, how many of those $125 bonuses per vaccinated member could a busy and efficient doctor with a good support staff receive?

Secondly, how many of these “COVID-19 Vaccine Provider Incentive Programs” were operating in the United States during 2021?

As we awakened souls try to figure out what’s going on in our bizarre world, it’s always useful to follow the money. It almost always leads to the explanation for any strange state of affairs that puzzles us.

A Message from the Lost Generation

 A very interesting and representative comment received by martin Armstrong.

Guest Post by Martin Armstrong

COMMENT: I am a Millennial, a demographic that never had an opportunity to succeed in America. The existential trauma began in middle school when our teachers huddled us into a room to watch the Twin Towers burn down in real time. We do not remember life before the Patriot Act or school shooter drills. The war in the Middle East progressed over the years, and I attended the funerals of former classmates who died in Afghanistan and Iraq. The military seemed like a valid alternative considering the once-in-a-lifetime economic collapse.

The Great Recession hit when we were in college, but most of us did not fully grasp what was happening. Many families suffered immensely, and some in the middle class experienced poverty for the first time, which instilled a permanent sense of scarcity. We piled on student debt for a degree that was nothing more than an expensive piece of paper. There were no jobs available once we graduated. We accepted what we could for pennies on the dollar as they fired the more experienced employees, our parents’ peers.

This caused older generations to have misplaced anger toward Millennials. They called us lazy and shouted how we could have a better life if we stopped buying Starbucks or avocado toast. No one realized that we were experiencing a different economic reality.

The pandemic hit once we settled into our careers after clawing up the corporate ladder. Another once-in-a-lifetime financial crash. We stayed in our apartments while the government sent insulting stimulus checks and businesses closed. Uncertainty and economic volatility engulfed our collective experience. Those who missed their chance to buy a home when prices were digestible are stuck as perpetual renters, as most of our income goes toward rent. We cannot save for an increasingly uncertain future due to shelter costs and overall inflation.

There is no financial nest egg for those not born into wealth. We have never felt financially secure. Our parents were established by the time they reached our age but we are the first generation to experience a lower quality of life than the last. People question why my generation is not having children or starting families. We can hardly support ourselves even with decent jobs. We are accustomed to these once-in-a-lifetime tragedies happening every few years. The future looks bleak and we expect the rug to be pulled out from us again. As you say, it is a matter of time.

Thank you for speaking out against the people who contributed to these events and providing guidance for the future. I do not want the war in Ukraine to spark another economic tragedy, as we are barely hanging on. We were fed a lie that you could work hard and succeed but life is far different for us than what we were promised. I feel more prepared for the upcoming downturn after reading your work and seeing that everything has a cycle. There are no once-in-a-lifetime events.

What If The Dollar Falls?

  There used to be subjects which would get you killed just for entertaining the idea such as using an alternative currency for trading oil. Ask Saddam Hussein or Muammar Gaddafi who both paid dearly for the offense. Not anymore. Russia and China are both expending their non dollar trade. Saudi Arabia is open to trading oil in Chinese Yuan. Brazil announced yesterday that they would follow suit. Total, the French oil company just experimented with an initial transaction last week. Now that the floodgates are open, the risk of a rush out of the dollar is real. It won't happen in a day but the momentum is on...   

 This as Nixon would have said 50 years ago is the 'real' war. Or as Xi Jinping mentioned more diplomatically recently, 'change' which has not happened in 100 years! Get ready, Ukraine and Taiwan were just the appetizers. Now, the show is about to begin!

Authored by Peter St.Onge via The Mises Institute,

The past few weeks, major countries have been moving away from the US dollar, raising doubts about the dollar’s long-dominant role in the world. Eight weeks ago, it was just pariah nations like Iran or Russia trying to de-dollarize. Now it’s Brazil, France, even Saudi Arabia—the lynchpin of the decades-long “petrodollar” arrangement.

If the dollar does lose its position as the global reserve currency, it will be catastrophic for the American economy. Catastrophic for the American people on whose backs 80 years of reserve status were built. And it will subject billions of foreigners, for whom the dollar has meant decades of being bullied, to history’s greatest bait and switch.

Dollar at Risk

In late March, Saudi Arabia announced it will price oil in Chinese yuan. Even CNN was worried, in a rare display of situational awareness, while Fox fretted about “Weimar”—hyperinflation.

The dollar has been the undisputed global reserve currency since the 1940s. Reserve currency status looks great on paper: You get to print stacks of green paper and foreigners give you cool stuff for it, like toasters, luxury cars, and copper mines. The problem is who profits—who gets paid when foreigners crave the green paper?

Unfortunately, it’s not the American people; it’s whomever’s printing money: The Fed, meaning the Treasury, to whom they hand their ill-gotten profits, and—you guessed it—Wall Street. Commercial banks.

To see why, imagine foreigners didn’t want dollars. The Fed and banks could only print a little bit since printing a lot would create inflation, and voters would toss them out.

But if foreigners want a large number of dollars, the Fed and banks can print a matching amount. It’s like a river flowing into the money supply reservoir, matched up with a river flowing out to foreigners. The reservoir stays stable, and voters don’t riot.

But notice where the profits went. That river to foreigners didn’t go to we the dollar-holders—we are the reservoir; we are unchanged. The profits went right through us to the source of the river: the US Treasury and Wall Street.

So, like the rest of our crony financial system, it’s a hustle. The American people think they’re benefitting from reserve status, but the profits were sucked out and handed to the people who designed the institutional fleecing we call a financial system.

Enter Weimar

Now, here’s the problem. What if foreigners suddenly don’t want dollars?

Maybe China’s paying them to sell oil in yuan, or maybe the Fed lost the plot and creates too much inflation.

Demand dries up, the dollar starts to lose value, and foreigners start worry their life savings and corporate treasuries are melting. They sell out of the dollar. A little at first, more and more if it accelerates.

Now that river to foreigners reverses, it flows back into the reservoir. The dollar collapses. 70 years of Fed and Wall Street money printing comes rushing back like a tsunami running up a canyon. We’re talking double-digital inflation, over multiple years, at a minimum.

If they screw this up, reserve currency status could turn out to be a trap, an absolute catastrophe for the American people.

What Are the Stages of De-dollarization?

So what happens if the dollar falls?

For starters, foreigners don’t need as many dollars. Meaning there are extra dollars nobody wants. This makes the price of the dollar fall—it gets weaker.

It’s usually slow at first, then picks up speed if it keeps going, a progressive rush for the exits. This is because the first ones out only lose a little bit, but the longer they waited, the more they’ll lose.

Who’s left holding the bag as the dollar becomes increasingly worthless? Easy: Americans. The only people on earth who are actually obligated to use the US dollar, thanks to an obscure law passed in 1862 as a wartime emergency that nevertheless managed to stick around for 151 years.

So Americans have no choice: unless you swapped your dollars for gold, or Bitcoin, or goats, you go down with the ship.

What happens to those Americans? A falling dollar drives up the price of everything that comes into America. But it also drives up the price of anything traded on world markets. Meaning the raw materials and imported components that drive American factories and sustain American consumers.

The first to jump would be gasoline, heating fuel, and food prices—all of those are world markets. Along with prescription medicines since China has a creeping stranglehold thanks to our idiotic over-regulation—indeed, this is more or less true for every consumer product that China dominates: we shot ourselves in the foot, and now it’s coming back to bite us.

Next, those expensive commodities and input prices pour out through the supply chain. Yanking prices up in industry after industry—cars, construction materials like steel or concrete, clothes, furniture, TVs, computers, and medical devices.

Gone are the days of affordable luxuries—now you gotta work for them.

The Main Event: Capital Flows

And that’s when the main event begins: capital flows.

If foreigners get nervous, they sell not only dollars, they sell assets denominated in dollars. Starting with the most liquid: stocks, bonds, and treasuries. These are easy to trade—IBM stock is easier to sell than a Taiwanese factory in Wisconsin—so they go first.

About 40% of American stocks are owned by foreigners and about one-third of corporate bonds. If foreigners start fleeing, both plunge. This could cut your 401k almost in half, and it could drive up borrowing costs for companies to impossible levels.

Leading to mass bankruptcies on top of the wave of bankruptcies the Fed’s already engineering to try and stop the inflation it started.

It doesn’t stop there: one-third of US treasuries are owned by foreigners—over $8 trillion in bonds. If foreigners start dumping those, it will either send US government debt service soaring by potentially hundreds of billions of dollars a year. Or, much more likely, it forces the Fed to step in and buy up all that foreign demand, flooding yet more trillions into the economy.

This would flip inflation overnight marching back towards double-digits.

Conclusion

There are ways to stop this. But given the Washington clown show to raise the debt ceiling yet again, paired with their obsession with sanctions that scare foreign countries off the dollar, Washington isn’t remotely close to the serious thinking it will take to right this ship.

Losing reserve currency status would savage the American economy, and it would savage the American people. No country needs reserve currency status—after all, it doesn’t benefit the people. But, like climbing a cliffside with no gear, once you go halfway, you better not let go.

[A version of this article first appeared on Peter St. Onge's substack.]

"There Is No Fix" - Rubino Warns Global Monetary Experiment Ends In "Bloodbath"

  It is not very hard now to understand that we are quickly heading towards uncharted territory. The end of the current fiduciary monetary experiment is but one of the elements. East West tensions and the restructuring of the global supply chain are two other major developments which will soon add to the conundrum.

Via Greg Hunter’s USAWatchdog.com ,

Analyst and financial writer John Rubino said in February, “We are in a debt and death spiral” that will force dramatic changes on the world. 

It was a direct hit because in March, Silicon Valley Bank (SVB) tanked, and the FDIC and the U.S. Treasury were forced to basically back-stop the entire banking system.  The financial problems are far from over as Rubino explains,

“Basically, interest rates have been artificially low for a decade...

In that time, crazy numbers of office buildings went up and were financed at really low rates... Now, office vacancy rates are spiking, which means office building are not profitable anymore.  The debts they have at 2% to 3% now have to be rolled over at 5%, 6% or 7%.  This means an already unprofitable office building is going to be even more unprofitable because of rising interest rates. Now, they want to sell this office space, and the price cuts that have to be done to get a deal done is 30% to 50%... Some are down by 80%...

Local and regional banks already had their troubles last month but are going to have bigger troubles when all these building turn out to be not worth nearly as much as we thought they were.  This paper is in pension funds... they are going to go into crisis. 

So, real estate is liable to be the catalyst in crisis in several other sectors... The government is going to have to let it burn and have a 1930’s style depression, or bail out everybody in sight... at the cost of rising inflation and the dollar tanking.”

Rubino says, “There is no fix..."

"There is no way to refill these buildings.  There is no way to refinance them without going bankrupt...

Sometime this year we are going to drop back into negative growth, and it’s going to be a bloodbath.  There is no solution, and these guys see it coming and they have no idea what to do about it...

This is the sector we want to watch and will be the catalyst for the next big crisis...

The next bailout crates a lot of new dollars, and that pushes down the dollar, and then, we are in the death spiral where there is no fix.  That is out there waiting to happen, a bailout so huge that it terrifies holders of the currency and Treasury bonds. 

Then it’s game over... This is just a question of when people figure this out.  That really is our situation right now.”

In closing, Rubino says,

“This is a much bigger story than what happens to the dollar as the reserve currency.  This is the end of a global monetary experiment that is going to go out with a very fiery end.  This is not going to be fun to watch.”

Rubino advises people to get tangible assets such as food, water, tools, gold, silver, a car title and a garden, to name a few.  Rubino says, “We all should be preppers now.”

Is GPT-4 intelligent? (Sparks of AGI: early experiments with GPT-4) - (Video - 48')

 Is GPT-4 intelligent? If you can overcome the terrible accent of the presenter (quite similar to mine unfortunately!), the answer seems to be yes! 

 Worse, even if you decide arbitrarily that it is not 'yes' because it doesn't meet some of the elements of intelligence, such as planning for example,, the answer is still 'yes' down the road because the potential improvements to the system are enough to solve any current problem.

 I agree that this conclusion is correct and that consequently GPT-4 and its descendants represent a real danger. Worse again, the descendants are not GPT-5 but just some add-on links to tools which magically improve it to reach perfection. And here, we are not talking about the future but the present! 

 More than a moratorium on AI research, what we need is some very deep thinking about AI, what we want to achieve and the risks. But is our society capable of this or is it beyond our ability as Eliezer Yudkowsky believes?

 

Big Tech Calling For A Pause On AI Sounds A Lot Like Central Banks Shrieking About Bitcoin

  This is an interesting article because in a typical Schrodinger way, I both agree and disagree. 

 Yes, big tech calling for a pause on AI development is self serving. This is unavoidable. But it doesn't make the concern unfounded. It is in fact quite legitimate although unfortunately much too late and unlikely to bring any respite. 

 The problem is that we now have extremely performant tools to develop AI that give powerful results although we do not exactly understand what is going on inside the black boxes. The consequence is that AI is advancing by leaps and bounds while our understanding of it is crawling far behind without any hope to catch up anytime soon. 

 (If you really want to understand why we cannot get the "alignment" right, you can listen to the very interesting interview of Eliezer Yudkowsky below. Although be warned that there are two drawbacks to this video: It is too long at over 3h and the interviewer is not cognizant of the subject and consequently has difficulty to grasp the technical concepts being explained.)

Authored by Mark Jeftovic via BombThrower.com,

Disruption for thee, but not for me…

For years, central banks have been sounding the alarm on Bitcoin and cryptocurrencies, fear mongering on the threats that they posed to the financial system, the global climate – at one point predicting that Bitcoin’s electricity demand would literally consume all available energy in the world by 2020 .

(Fact check: it didn’t)

Nevermind that under the stewardship of the central banks, the financial system has lurched from one crisis to the next for decades on end, every one an order of magnitude worse than the prior.

The policy response to each crisis (expand credit, suppress interest rates, print money) simply incentivized moral hazard, perverse incentives, and an ever widening wealth gap – while providing the setup for the next crisis. With this unbroken string of failures under their belts, it’s always rich to listen to these insular technocrats, who have zero skin in the game, pontificating about the meltdowns they created. Especially when they get worked up around hazards of a phenomenon that has since emerged to obsolete them.

Now it’s Big Tech’s turn:

Warning us about the existential “risks to society” of AI and calling for a time-out. The very people who have benefitted the most from exploiting disruptive technology, regardless of the collateral damage, and in the process became literally the wealthiest people in history, now look at AI in the hands of the rabble, and there’s a flag on the play.

When these tech oligarchs blow out entire industries and replace them with quasi-monopolies in which they’re majority shareholders, it’s just creative destruction. #LearnToCode, baby.

But if a total game changer suddenly finds its way into the hands of the plebs, and the Big Tech incumbents realize it could be their turn to get their asses disrupted… by commoners at that….  then suddenly we’re looking at a crime against humanity.

The Future of Life open letter was signed by everybody from Elon (“self-driving robotaxis any minute now”) Musk, and Steve Wozniak to Yuval (“the plebs are hackable animals”) Harari and sundry other AI incumbents. 

According to their About Page,

The Future of Life Institute is an independent non-profit organisation funded by a range of individuals and organisations who share our desire to reduce global catastrophic and existential risk from powerful technologies.

And their listing in their entry in the European Transparency registry discloses that their funding:

..is about 87% provided by the Musk Foundation. Speaking of risks from powerful technologies, let’s remember that 19 people have been killed by Tesla’s in self-driving mode and another 21 when their Tesla’s exploded as a result of various crashes (out of a total known pool of 373 Tesla deaths thus far).

Who is really threatened by AI?

When I first started playing with chatGPT, I never for a second believed it was any kind of magical artificial intelligence. I’ve always called AI “Algorithmic Imitation”.

However, it is a quantum leap forward in natural language interface. I instantly recognized who was most at risk by this: the search engines, namely Google, and the entire ecosystem of made-for-Adsense “content” websites whose raison d’être is to game search algos.

Hence, Google’s panicked ham-fisted rush job on Bard, and Microsoft’s debacle trying to incorporate chatGPT (in which they are a significant shareholder) into their own Bing. (Soon I’ll be releasing a serialized collection of pieces, working title “Infernal Algorithmica”  which is a  technological grimoire  exploring the lower circles of the pay-per-click advertising model. Sign up for the list if you want that when it comes out.).

This is nothing new. This is the same dynamic that’s been played out with every disruptive tech innovation, ever – there are even accounts from the Decline of The Roman Empire on how the alchemist who discovered aluminum was beheaded when the Emperor suspected that this breakthrough innovation might devalue silver (the story was described by the Roman writer Petronius, circa 27AD, in his novel, Satyricon, although Pliny The Elder wrote that it could have been apocryphal).

Apocryphal or not, the tension between disruptive, rising technologies, and the elites who control the operations and markets of the incumbent ones is real and perennial.

In  “Innovation and its Enemies, Why People Resist New Technologies“, Calestous Juma writes how

“[Nearly all] debates over new technologies are framed in context of risks to moral values, human health and environmental safety. But behind these concerns often lie deeper, but unacknowledged, socioeconomic considerations”.

The face-off between the established technological order and new aspirants leads to controversies…perceptions about immediate risks and long-term distribution of benefits influence the intensity of concerns over new technologies”.

These calls for a moratorium on AI, the abolition or over-regulation of cryptos and Bitcoin and inevitable calls for technocratic control over your energy consumption and individual carbon footprint metering are all riffing on the same theme: you’re too stupid and infantile to use these technologies responsibly. Only The State can figure it out. (No wonder most governments of the world are on a mission to ban cash, privacy …and guns).

People like Musk, Harari and the ever increasingly batshit Eliezer Yudkowsky (who wants to forcefully curtail computing power to the point of advocating for the military bombardment of rogue data centers abroad) should know this.

Yudkowsky has been mentioned in these pages before. He’s the one who is convinced AI will inevitably result in the extermination of all humanity.

I had a lawyer who liked to say “You can’t suck and blow at the same time”. Either you want to ride a tide of rapid technological change to unparalleled living standards, personal wealth and privilege (but which affords everybody else those same opportunities), or not so much. You can’t do both.

 

Pity The Child

  This is a little out of the way for this blog although not completely. Childhood has always been an important variable in marketing and likewise in data science and macro economics. You cannot have balanced adults or societies without taking care of the development and education of children. This should be a priority and we are making a mess out of it. 

 The impact of the Covid lockdowns have of course been especially deep and painful for children but more generally, our recent aversion for risk and conflicts is the cause of unbalanced development which will slowly diffuse through society as explained below.   

Authored by Bruce Abramson via RealClear Wire,

About a decade ago, toddler son in tow, I found myself in a playground for the first time in 35 years. It was not what I remembered. The colors were far more vibrant. Plastic had replaced wood and metal. Sharp edges had been rounded, chains and hinges softened. Cushioned ground had replaced the asphalt. 

What struck me most, however, was that it was full of adults. It seemed that every child had a minder within arms length. I was perplexed. I knew why I was there—my son was still a bit wobbly. Many of the kids appeared to be about 6-8 years old. Why did they need minders?

I soon learned the two cardinal rules of contemporary playgrounds (or at the very least, playgrounds on Manhattan’s Upper West Side): One, your child may not get hurt. Two, your child may not hurt another child. Violate the first rule, and you’re negligent. Violate the second and you’re antisocial—borderline criminal. Also, and just for good measure, “hurt” is given the broadest possible definition to include potentially hurtful language.

The stories about fragile college snowflakes crumbling in the face of microaggressions and provocative ideas suddenly made sense. Children raised in a cocoon will demand similar protection when they begin to think of themselves as adults.

That initial shock was hardly the end of my education. I soon learned the corollary to the playground rules: Today’s children never learn to engage in disintermediated play. The natural, if often rough, society of 3-to-5 years olds never gets to form. When my son hit that age, I was stunned to have other kids approach me to report that he was being annoying. When I was a child, running to a parent was the equivalent of a 911 call. We might have approached with a message like “your kid is bleeding” or “we think he broke something,” but annoying? That was like calling the Fire Department because you couldn’t find the remote.

It became clear to me that we had destroyed childhood. While the “advances” in parenting of the past fifty years undoubtedly contained some gems, the net effect was a disaster. As with so much else in life, human instincts honed over the millennia were far superior to decades of expert advice.

Then things got really bad. Though few recognized it as such at the time, the decision to shutter much of the world in March 2020 unraveled the entire socioeconomic fabric of modern life. As anyone who has ever studied or worked with any complex system can confirm, nothing ever restarts quite as it was before a shutdown. 

American society was hardly the exception. The hibernation derailed every pre-existing positive trend and accelerated all the negative. The restart, unfolding in uneven fits-and-starts over the course of two years, introduced an entirely new sociology. Though its precise contours are still taking shape, a few things are clear: Woke reigns supreme and children are expendable.

While most Americans are still digesting the changes, a few brave souls flew into action. Bethany Mandel and Karol Markowicz moved quickly to chronicle the attacks on our children, ring the alarm, and call for action.

Stolen Youth is a disturbing read. Every page bristles with details of the attack on our children. The combined impact of these attacks is clear: There is a large, organized, well-funded movement, drawing together media, professional organizations, teachers unions, corporations, universities, and government officials committed to destroying and indoctrinating our children. Its methods are brutal and clear: It promotes psychological instability and fragility. It teaches children to ignore their emerging common sense, their parents, and timeless ethics in favor of expert pronouncements and trendy social constructs. It deconstructs language to detach negative words from their underlying concepts then reapplies them to entirely different concepts consistent with indoctrination.

The authors divvied up the chapters, perhaps each claiming the atrocities they dread the most. Markowicz, an émigré from the former Soviet Union, opens the book with a reminder of what it means to live in a totalitarian society. Spoiler alert: We’re heading there fast. 

She then moves into the various ways that the woke weaponized Covid—both the virus and the shutdowns—to convince our children that they are little more than viral vectors safe only in isolation. Mandel picks up that baton a few chapters later in her broader consideration of woke pediatrics. 

That discussion incorporates one of the book’s most chilling quotes. It comes courtesy of the Federation of State Medical Boards which, on July 29, 2021, threatened disciplinary action, “including the suspension or revocation of the medical licenses” of any physician who shared any information or opinion about Covid vaccines that was not “factual, scientifically grounded, and consensus-driven.” 

Those first two qualifiers are unobjectionable. The third gives the game away. What does it mean for something to be “consensus-driven?” Consensus among who, and for how long? Those of us who’ve been paying attention know how it works. A few well-connected prestigious and/or governmental “experts” determine what they would like everyone to believe. They then condition funding, promotion, and even licensure on acceptance. Unsurprisingly, given the choice between: (a) Promoting the emerging consensus, keeping your job, and securing funding; or (b) Retaining integrity, getting fired, and becoming unemployable, most professionals choose (a). Voila! Instant overwhelming consensus, which must now be imposed, obeyed, and unquestioned.

The medical establishment, long known for its imperious nature, was unusually open in tipping its hand. As the authors show, however, its practice is hardly novel. Consensus-driven expertise emanating from schools, libraries, media, and entertainment teaches our colorblind children to develop a hyperfocus on race and sexualizes the pre-sexual. The woke teach our children to become racist and sexually confused, blame traditional American mores for racism and repression, and claim the mantle of expertise needed to “fix” the problem.

The entire process is designed to keep today’s kids off-balance. Covid taught them to fear normal social interactions. Critical Race Theory teaches them to distrust their neighbors. Gender theory teaches them to question their bodies. The woke package combines to externalize our children’s problems and teaches them to see themselves as victims. It preaches looking outward to assign blame rather than looking inward to find solutions.

As Markowicz and Mandel put the pieces together, it becomes clear that the woke juggernaut cannot be contained by critiquing its views of race and gender. Those are but two of the more prominent avenues of attack in an all-out assault. The woke are operating in a total moral inversion: compassion for some hypothetical, distant member of society and contempt for those closest to us. It’s a perfect prescription for totalitarian tyranny: Absolute trust in the emanations of disembodied expert authority and disrespect for parental authority. The woke are teaching our children to despise and disrespect family, God, nation, and even their own biology. 

Why target the children?

First, as Markowicz notes in her chapter on “Child Soldiers,” because kids are useful. Put a disturbed child—say, Greta Thunberg—in front of your movement, and only the very callous will attack. That tactic is hardly new—there’s a reason we’ve long talked about “poster children”—though the woke do seem to have turned it into an art form.

Second, because childhood is when we shape our beliefs and our tastes. Convince a generation that it’s fragile, off-balance, angry, victimized, and oppressed, and very few of its members will ever break out.

Stolen Youth is one of the clearest articulations yet of the woke drive to destroy American society and Western Civilization. That it’s starting with our children is hardly novel for an ideological movement. The question we must now face is whether we can alert enough adults to the danger to repel it before it is truly too late. Stolen Youth rings the alarm bells. I only hope that they’re loud enough to have the desired—and necessary—effect.

"We Are All On Borrowed Time": Here Is ChatGPT's Analysis Of The JOLTs Report

  As the article below makes clear, the short term risks of ChatGPT has nothing to do with consciousness (which remains a long term risk) but is related to its value. 

 Within the current context of recession and stagflation, the lure of extreme efficiency will be irresistible and inevitably lead to higher productivity with fewer over-stressed people earning more while the rest is hopelessly on the dole unable to catch up on the learning curve.

 I recently read an interesting article saying that ChatGPT would open the door to the 4 days week. If only! It reminded me of a great book of the late 1970s in France which explained how from now on we would all work less and enjoy life more thanks to the arrival of the personal computer. ("Le bonneur en plus" by francois de Closet) It was a good optimistic book but the future it described never came.

 ChatGPT is an extraordinary tool but likewise it will be hijacked to increase profits not salaries. (Individual salaries we mentioned above is not the same concept as "salaries", a macro economic variable.) The problem is not in our stars but in our economic system which is slowly turning back to extractive while technology keeps progressing. Not a very good mix?

"We Are All On Borrowed Time": Here Is ChatGPT's Analysis Of The JOLTs Report

One look at a particularly green subset of tech stocks and it becomes clear that there is a lot of hype surrounding AI. Yet when we look at how ChatGPT can complement - or even overhaul - financial analysis, we are certain that many Wall Street jobs will soon vanish and be replaced with faceless (and much cheaper) AI algos.

As a reminder, three months ago, in our first foray into this arena, we asked ChatGPT to "Write A Taylor Swift Song About The Volatile Macro Market." The result was impressive.

Now, Goldman trader Rich Privorotsky has done something similar, this time evaluating AI's ability to replace Wall Street economists, by asking it to provide an analysis and assessment of yesterday's JOLTS report (something we did here). The results below demonstrate that the one category this subset of Wall Street workers should be very concerned about is the coming spike in the unemployment rate. As the Goldman trader puts it: "we are all on borrowed time."

Here is Privorotsky:

I fed ChatGPT a selection of the Jolts data and asked it whether the Jolt data was consistent with a decelerating or accelerating economy, this is what it came up with…we are all on borrowed time: 

“This data is more consistent with a decelerating economy. A decelerating economy is typically characterized by a slowdown in growth, and the data provided indicates several signs of such a slowdown:

1. Decrease in job openings: Total private job openings decreased by 599,000 from January 2023 to February 2023, suggesting fewer opportunities for job seekers and potentially slower growth.

2. Decrease in hires: Total private hires decreased by 145,000, indicating that companies might be more cautious about expanding their workforce, which could be a sign of a decelerating economy.

3. Decrease in layoffs and discharges: A decrease in layoffs and discharges could be a positive sign for the economy, as it might indicate lower unemployment. However, when combined with the decrease in job openings and hires, it could also suggest that companies are more hesitant to let employees go due to the uncertainty of finding new hires in a potentially slowing economy.”

 me: there anything obvious here about small business compared to large companies?

 Yes, there are some differences between small businesses and large companies in the data provided:

1. Job Openings: Small businesses with 1-9 employees saw a significant decrease in job openings from January 2023 to February 2023 (-198,000), with the job openings rate declining by 1.0 percentage points. In contrast, larger companies (1,000-4,999 employees) experienced a slight increase in the job openings rate (0.1 percentage points) during the same period.

2. Hires: Small businesses (1-9 employees) had a slight increase in hires (+17,000) from January 2023 to February 2023. On the other hand, larger companies (50-249 employees and 250-999 employees) experienced a decrease in hires during the same period (-174,000 and -94,000, respectively).

3. Layoffs and Discharges: Small businesses (1-9 employees) experienced a significant decrease in layoffs and discharges (-110,000) from January 2023 to February 2023. Larger companies (50-249 employees) also saw a decrease in layoffs and discharges (-103,000), but the change wasn't as drastic as in small businesses.

These differences suggest that small businesses might be facing more significant challenges compared to larger companies. The larger decrease in job openings and the significant decline in layoffs and discharges in small businesses may indicate a higher level of uncertainty and potentially more vulnerability in the face of a decelerating economy. However, it's important to consider other factors and data points to have a comprehensive understanding of the overall business environment for both small and large companies."

Why a desperate America may soon annex its 51st state

  What's wrong with America? Is the country in terminal decline as hinted by Simon Black below? Hard to say although most recent news seem to indicate that this is indeed the case. 

  If you live in a nice suburb, it probably doesn't feel that way... yet. Although objectively, walking in any European city is now a much better experience than drug infested downtown San Francisco. (Most other cities except a very few being anyway unwalkable.) Taking the train in Japan, Korea or now China likewise is a 21th Century experience. In the US, it's more like the early 1900s. Infrastructure is crumbling while the country is over-extended abroad "managing" it's world order that more and more countries reject.    

  In a way, today's America feels very much like 1975 London with its abandoned docks along the Thames, reflecting past glories and present decay. London did rebound in the following decades although real power moved from Westminster to Washington. Just as England's punks defined the era, LGBT woke crowds will probably define today's sunset of American hegemony. From blue spiked hair to pink generals, it looks like people prefer their downfall to be colorful!

by Simon Black via Sovereign Man

At the center of Sovereign Man’s core ethos is the indisputable view that the United States is in decline.

I take absolutely zero pleasure in writing that statement. But it’s incredibly difficult, if not impossible, to objectively appraise the bountiful evidence at hand and not reach the same conclusion.

Consider the following:

US government finances are appallingly bad. The national debt exceeds 100% of GDP, annual deficits run into the trillions of dollars with no end in sight, and major trust funds for Social Security and Medicare will soon run out of money.

Political incompetence is mind-blowing; politicians fail to be able to even identify problems, let alone understand them, let alone reach compromises to solve them.

Ditto for central bank incompetence. These people simply cannot understand how, by keeping interest rates at zero for nearly a decade and conjuring trillions of dollars out of thin air, they engineered record high inflation. And they also fail to understand how their actions to ‘fix’ inflation are causing widespread havoc in the economy and financial system.

Social divisions across the country are extreme. Censorship and cancel culture prevail, and corporations now wag their fingers at their own customers to “be better”.

The education system is in pitiful shape, with many politicians and school board officials turning classrooms into activist training camps.

The population is terribly unhealthy. Obesity and drug addiction are epidemics. Plus there’s an obvious mental health crisis that drives far too many people to commit horrific acts of violence on innocent people, including children.

National security is in decline. Military readiness is down, yet top officials seem more concerned about diversity and inclusion rather than the ability to prevail in war.

The rule of law has been perverted, including for political purposes and self-aggrandizement. We just saw another example of this yesterday.

Even the national fertility rate continues plummeting– an indication of the rising cost of living and social apathy.

The Wall Street Journal recently published a series of polls indicating that most Americans doubt their children will have a better future; pessimism is strong.

They also found that certain values which once defined American culture, including a sense of community, hard work, and civility, are no longer important to the majority of people.

This is all happening at a time when adversaries are circling. And that includes China.

Now, usually whenever I bring up China, there are always people who are quick to assert that China cannot possibly replace the US as the dominant superpower because they have just as many problems.

And it’s true that China has a ton of problems. They have their own debt issues, financial system chaos, and economic problems. They have social challenges, a major demographic crisis, and even a serious issue with childhood obesity.

But no civilization or empire throughout history has ever been problem-free.

Ancient Rome, even during its early republic days, had enormous problems. They had to deal with constant revolts, civil war, the genocidal dictatorship of Sulla, famine, war, plague, and more.

Yet there’s an enormous difference between taking on challenges while you’re on the rise… versus succumbing to them while on the way down.

Rome was able to deal with its challenges and continue its rise to become the dominant superpower. China may be able to do the same.

The US finds itself in a precarious position where they have a mountain of compounding problems… and no ability to even slow them down, let alone solve them.

I’ve written before about what I call the “Four Forces of Decline”, which I define as

1) Forces of History– the inevitable, cyclical nature in the rise and fall of Empire. No empire, no civilization in human history has ever retained the top spot forever, and most tend to experience similar challenges on the way down.

2) Forces of Society– the vicious way in which a society eats itself from within, vanquishing the ability and inclination to solve complex problems.

3) Forces of Economy– the debilitating toll that enormous debts, deficits, and currency inflation take on a nation and its people.

4) Forces of Energy– when energy is cheap and abundant, prosperity reigns. When energy is expensive, prosperity wanes. The relationship couldn’t be more clear.

Today’s podcast puts all of these together, with a particular focus on #4, Forces of Energy.

Part of being the dominant superpower in our modern world means having access to abundant energy. Yet the US government has spent the last few years trying to destroy its energy (oil and gas) industry.

They’ve been pretty successful. The President of the United States hardly misses an opportunity to bash oil companies. Politicians pass new rules and taxes to punish them. The media beats up on them. Investors have pulled funding for them.

So it shouldn’t be a surprise that US oil production, while not in terminal decline, is failing to keep up with growing demand.

Shale oil is especially problematic given that most of the highest quality “tier 1” sites have already been drilled. Many are already in decline.

This is a big deal. Shale oil is the reason why the US achieved near energy independence. With shale in decline, the US will be forced to import a LOT more energy (which, again, is critical for prosperity) from places where they have an increasingly adversarial relationship.

Russian oil is obviously off the table. So is Iranian oil. Saudi Arabia is rapidly becoming cozy with China; in fact the Saudis are now publicly considering to sell their oil in Chinese currency, the renminbi.

This is an enormous threat to the US. Saudi Arabia has been selling oil in dollars for decades; they’ve even had their currency, the riyal, pegged to the US dollar since 1986.

This concept of selling oil in US dollars is known as the petrodollar, and it’s one of the key reasons why the US dollar is the global reserve currency.

Anyone who wants to buy oil needs to own US dollars. And that pretty much includes every country on the planet. So foreigners are forced to stockpile dollars, and by extension, US government bonds… simply because they need dollars to buy oil.

As a result the US government is able to get away with the fiscal equivalent of murder. They can run multi-trillion dollar deficits every year. They can wage expensive wars in foreign lands. They can go into debt to pay people to stay home and NOT work…

… and they’ve always had a bunch of suckers overseas– foreigners who have no choice but to buy US government bonds, simply because oil is priced in US dollars.

But what if Saudi Arabia started selling oil in renminbi?

Most likely a LOT of foreigners would dump at least some of their dollars and start holding renminbi as part of their official reserves.

America’s biggest privilege and benefit– its reserve currency– would vanish, practically overnight.

Suddenly the US government wouldn’t be able to run multi-trillion dollar deficits. It wouldn’t be able to go into debt to pay people to stay home and NOT work.

They’d have to be like almost every other country– act with some fiscal responsibility.

Think about it– if the President of Mexico shook hands with thin air, investors would be rightfully terrified and panic-sell Mexican government bonds. If South Korea ran a multi-trillion dollar deficit, its currency would probably plummet.

Back in September we saw the British pound and UK government bonds practically collapse… and the Prime Minister of one of the world’s largest democratically elected sovereign governments was forced to resign… simply because investors didn’t like her economic revival plan.

These issues are all linked. If the US continues to demonstrate incompetence and weakness… if they continue to subvert and destroy the energy industry… and if Saudi Arabia starts selling oil in renminbi…

… the consequences will be life-changing.

This is one of the biggest stories of our lives. It’s easy to miss because it’s playing out over a period of years. It gets lost in the day-to-day noise and the crisis du jour.

But rest assured this is happening in front of our very eyes; it’s a slow motion crash that’s already started.

The outcome isn’t inevitable yet. But nothing about these people’s actions demonstrate that they have the slightest clue what’s going on.

NASA Engineer Tom Moser Reveals the Truth About Climate Science (Video - 17')

    

At this scale we do not have 200 years but 30 years of reliable satellite data.

We do not know much yet about long term cycles although it seems likely that we are still rebounding from the little ice age towards temperatures equivalent to the Middle Ages optimum.

Worse, solar and cloud effects, by far the most important are not well taken into account in the models.

Finally, we are told that human forcing represents about 20% of the current warming, which if you read the small prints of the models is also the degree of uncertainty.

So the truth is that we do not know if there is currently any global warming or if it is natural variability. Much less if it is man made.

But as a scientists, to say so means no grants for your projects, so almost everyone find "something" at the limit of their models.

So here you have it: Man-made crisis certainly but is it warming? We don't know. So much so that nobody calls it Global Warming anymore, just climate change. An oxymoron which guaranty that you can't be wrong footed.

 Here's a video of Tom Moser of NASA putting some flesh on the bones.