08/27/09 Ouzilly, France
“They were hunters. They stayed here during the Ice Age, probably hunting reindeer,” said the archaeologist in charge of the site.
“But who were they?”
“They were Cro-Magnon…they were like us…human. They wore jewelry. They drew pictures. They cooked meat. And they used this cave over a period of 30,000 years…”
Yesterday afternoon, we drove up the valley to a limestone cave owned by friends. There, a group of 20 scientists, archeologists and volunteer workers are digging down through 30,000 years of history, about 20 feet worth of dirt, rock and sediment, 5 centimeters at a time.
We’ll come back to the pre-historic world in a minute. First, let’s catch up on what is going on in the world of finance, right now.
Yesterday, most of the news and commentaries concerned either the death of Edward Kennedy or the life of Ben Bernanke. We do not speak ill of dead, not here at The Daily Reckoning. So, we will speak ill of the living.
Long-time Daily Reckoning sufferers will recall why the nation chose George W. Bush to lead the country. Nature abhors a monopoly and detests a void. At the time, America had an almost complete monopoly on power. The Soviet Union had thrown in the towel. China had taken the capitalist road. The US empire had no rivals…and badly needed to be taken down a notch. But how? If a nation has no worthy competitors, how can it be beaten? The answer is obvious: it has to become it’s own worst enemy. George W. Bush was the man history needed…a man who would be putty in the hands of the neo-cons…a man who could be counted on to do the wrong thing…and put the nation on course for destruction.
Ossama bin Laden kindly sent a videotape explaining to him how to do it. The United States would have to spend its way to disaster, he said. The United States would have to undertake costly, futile wars…while actually expanding domestic spending too. GWB signed the single most expensive bill of all time – a health care measure – while simultaneously sinking the empire in its single most expensive war, one that would last longer and cost more than WWII.
But George W. Bush was just the beginning. Now, he’s back in Texas. And the empire is still in business. What can the Fates do to us now? Give us Obama and Bernanke! Obama continues the imperial wars. And, with Bernanke as his sidekick, the two of them now set out to destroy the empire’s finances. When they are finished, the dollar will no longer be the world’s reserve money. US Treasuries will no longer be the safest, surest credit in the world. And Americans will no longer be the planet’s richest people.
That is our prediction. Prove us wrong!
Readers may notice a disjoint between what they find here and what they find in the mainstream press. According to the papers, Ben Bernanke is a hero. He prevented a ‘Second Great Depression.’ Obama rewarded him by giving him another term. The recovery is a done deal.
But it is not so. The noise continues. But the story is the same. We are at the beginning of a long period of adjustment – a depression.
Neither oil, gold or the Dow made any real progress – neither up nor down – yesterday.
Freddie and Fannie are soaring…but the basic housing story remains the same. There is a record number of empty houses. With incomes falling, there is no reason to expect a rebound in prices.
The Post Office says it is cutting 30,000 jobs. USA Today says more and more people can’t pay their utility bills. And one out of three workers has only enough savings to last a week or less.
World trade is not recovering either. The Baltic Dry Index has fallen 45% since June. China is a bubble economy, based on credit, not genuine growth. And America’s stimulus programs – notably ‘Cash for Clunkers’ – have merely made things worse by drawing forward future spending and adding to US total debt while not creating any real economic progress.
In short, Ben Bernanke is no hero. And the economy is not recovering.
When we arrived at the cave a couple of archeologists were at work. They sat on cushions…wearing only socks on their feet. Then, using tiny trowels and small brushes, they loosened a teaspoon of dirt and swept it into a jar. The jar was then dumped into a bucket, which was taken down to the camp about 50 feet away. There, it was put through a strainer in order to filter out small objects – pieces of bone, shell, flint and anything else that might help them understand what went on here.
“This is a very exciting place to be,” the site manager continued. “We are finding the remains of humans…things that humans left behind 30,000 years ago.
“They didn’t live here. They only used this place, probably for a few weeks of the year, in their hunts. The age of sedentary humans – of towns and agriculture – was still thousands of years in the future. These people were hunter-gatherers. And this part of France probably resembled modern day Siberia. It was cold. The ground was permanently frozen. Herds of reindeer, bison, auroch (the forerunner of the cow), and horses roamed this area. That is what these hunters lived on. And they caught fish from the river. This cave is where they spent the night and worked…
“We’ve found hundreds of needles, for example, for sewing clothes. They wore skin clothes, much like people who live in the North of Siberia today. And they made their weapons here too…flaking and heating rocks in order to produce the arrowheads and knives they depended on.”
We were looking at a layer from about 17,000 years ago. The cave’s entrance has been sealed off, with a cage built around the digging site to keep out amateurs.
“This is no Indiana Jones treasure hunt,” the top archeologist explained. “This is a meticulous, scientific project that will take many years to complete. You don’t want to go too fast. We get thousands of objects out of each 5 centimeters. Each one must be given a chance to tell its story. It means sending it to experts all over the world – experts at dating…experts on extinct fauna…experts at pre-historic plants…climate experts…rock experts…ethnologists, biologists, and so forth.
“It’s like reading a book. But every time we dig down, we not only turn the page…we burn it. We can never recreate those objects in their original setting. We can never read that page again. So we have to make sure we understand what it was telling us.
“And each page tells us more about the people who stayed here…about what they ate…and how they lived…and what they were worried about. When they drew pictures of women, for example, they drew pictures of women who were pregnant. Maybe they just thought pregnant women were beautiful. But maybe they were worried about life itself…about their survival…
“Really, that is all men have ever worried about…getting enough to eat in order to survive…and reproducing, so the race survives. Every thing else is entertainment.”
Here at The Daily Reckoning, entertainment is what we do. Who among our dear readers needs to earn 15% on his money…rather than, say, 5%? Will anyone starve to death if his stocks don’t go up?
Will any of our readers fail to have children if he guesses wrong about the rally? What if it is a real bull market, rather than a bear market rally, as we have thought?
Ah, but there’s the hitch…is it really just idle entertainment?
Our tribe may be deathward marching, but we reach for the stars along the way. We want to be bigger, faster, richer, smarter, righter, funnier, stronger and richer. Why? To entertain ourselves? Yes…but it’s more than that. Every species seems to aim for dominion. For status. For improvement. Because each is in competition with each other. There is only so much grass…so many wild bananas…and so much game. So every species competes with others for resources. And every member of the species competes with every other member too.
It’s a dog-eat-dog world? Not exactly. But the dogs have to fight with the wolves and the hyenas…and the mountain lions and the panthers. They are all predators. And there’s only so much prey. A weak dog is a dead dog. And a weak pack is soon an evolutionary dead end.
Somehow the desire to reproduce is welded to the desire to reproduce many…and good specimens. Without this constant selection…this constant competition to produce more and better specimens…the whole tribe weakens and is eventually exterminated. At least, that’s the theory. So every male member of the tribe aims for as much reproduction as possible. Females on the other hand, aim for quality. They know they can only have a few offspring. So, they aim to produce the best offspring they can. How do they do that? By mating with the best, fittest, fastest, strongest, richest, highest status – most dominant – specimens they can find. In other words, the schmuck never gets a date.
So you see, dear reader, our interest in money is not just an entertainment. It’s about the survival of the human race!
Until tomorrow,
Bill Bonner
The Daily Reckoning
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O! Bill, I would so like to reproduce prodigiously. I have all the requisite stuff to do so, and Pfizer has generously made available what I lack, for a fee–less co-pay.
I am engaged in entertainment. As are 39 million or so of others like me–over 50, in charge of our income and willing to work to the level just shy of the 50% take by the government.
Enjoy, it’s not as bad as it seems. ALthough, it is worse than those younger that I can imagine.
I would like an edit button.
Interesting and nicely written blogs. Garth Turner is on roughly the same wavelength as BB, but usually generates about 100 comments for each blog. I’m surprised so few comments appear at this site – it deserves more feedback.
“What if it is a real bull market, rather than a bear market rally, as we have thought?”
I’ve noticed you hedging your earlier doom for the markets from a few weeks ago. Tough to stay bearish when the economy is showing strength in just about all sectors now – relatively speaking.
This market has another 20% upside. Might as well jump in for the ride.
Thanks for your answer regarding the “experts”. But when you are listening to the theory formers who are experts in their field (would they be some French scientists in this case?) would you please always listen to the opposing theories before making your mind as anthropology is not your area. Otherwise, you would be in the same situation of a person who follows only common news sources and listens to the “experts” on those channels and unfortunate enough to hear any opposing views on the economy like invaluable articles of yours.
Harry-
I know you aren’t new to this site, so how come you don’t recognize the number 10,300? You spend so much time telling us how BB has been so wrong about everything, but for months he has been predicting this rally and even put an upward limit of 10,300. I thought it very foolhardy to try to put an actual number on it, but it is getting closer all the time.
You say we might as well jump in for the ride, but that is just what it is, being taken for a ride. If I were trying to time the market, could I look to you to tell me when to get out? Or Jim Cramer? Or Larry Kudlow?
Cheers.
Do not feed the trolls.
Harry can’t be for real. Either the guy is great with sarcasm or unbelievably dim!
It will be interesting to watch the end result of this pump and dump masterpiece.
Best of DR.com. Your compatriate gold bugs are too blatant as gold is a hedge not an investment.
Perhaps spending a long time in France is not so good. How about throwing away the European blinkers and to get some fresh air? How about spending time with some Japanese theoreticians, Indian philosophers and Chinese scientists? But then again, travelling around in today’s world is not enough, there is the 4th dimension. How about spending some time in Sumer? Sumer, the birthplace of today’s civilisation. What was that theory about the cold climate and big brains and heads? Oh, maybe those anthopologists never met a Sumerian or ancient Egyptian intellectual. I expect an intelligent person to acknowledge what we see in our lifetimes is a snapshot in history of mankind. I expect an intelligent person to grasp the vastness of time and to know that scientists, historians, philosophers are all humans with their knowledge, intellect, pride and fears. Don’t they all claim to have objective minds, just like the economists in today’s news? But objectivity comes from one’s heart not from one’s academic background. Anyone who studies the history of science would know that scientists don’t come from Vulcan. Yet the cold climate theory may still stand. It looks like some people with big heads do come from the cold climates after all…
Appreciating every article of yours, can’t wait until tomorrow.
Well done, Mr. Bonner – keep up the excellent work!
Let’s face it, doctors practice medicine for a lifetime and financial experts practice finance for a lifetime.
Bill–
In a previous issue I believe you stated that the Daily Reckoning’s position is that there are NO heroes. I happen to agree but I’m sure there are strong opposing views. But where does hero worship get you? Was the Maestro a hero?
If DR IS in the entertainment business, you are doing a splendid job of it. I am continually amused and entertained by your
writings. As for markets and investment strategies, everyone has to determine that for themselves and it is not easy. You even mentioned that your own family finances needed some tweaking. So keep the fine writing and entertaining thoughts coming. Thanks
“survival of the human race” I think the correct term would be “survival of the human species.” Race though it is. A Rat Race.
I wonder what archeologists thirty thousand years from now will think when they take a look at cash for clunkers and quantitative easing.
One of Bill’s best.
I think Harry the Recovery Troll is actually Bill himself just teasing us.
Iraq costs more than WWII in real dollars????? Please provide a citation, or even better, a link which supports this opinion.
How much would you wager on this archeological dig really being 30,000 years old and the area at the time like Siberia?
I do really like you guys though and am just now understanding TRUE economics because of your newsletter. Can’t thank you enough.