03/01/10 Stockholm, Sweden – Of late, Harvard University professor Niall Ferguson has been regularly beating his drum, warning in his own way of the impending doom of the American empire. In a recent opinion piece in the Los Angeles Times he checks the pulse of the US in light of the rhythm of history…
From the LA Times:
“Great powers are complex systems, made up of a very large number of interacting components that are asymmetrically organized, which means their construction more resembles a termite hill than an Egyptian pyramid. They operate somewhere between order and disorder. Such systems can appear to operate quite stably for some time; they seem to be in equilibrium but are, in fact, constantly adapting. But there comes a moment when complex systems ‘go critical.’ A very small trigger can set off a ‘phase transition’ from a benign equilibrium to a crisis — a single grain of sand causes a whole pile to collapse.
“Not long after such crises happen, historians arrive on the scene. They are the scholars who specialize in the study of ‘fat tail’ events — the low-frequency, high-impact historical moments, the ones that are by definition outside the norm and that therefore inhabit the ‘tails’ of probability distributions — such as wars, revolutions, financial crashes and imperial collapses. But historians often misunderstand complexity in decoding these events. They are trained to explain calamity in terms of long-term causes, often dating back decades. This is what Nassim Taleb rightly condemned in ‘The Black Swan’ as ‘the narrative fallacy.’
“In reality, most of the fat-tail phenomena that historians study are not the climaxes of prolonged and deterministic story lines; instead, they represent perturbations, and sometimes the complete breakdowns, of complex systems.”
Ferguson hits upon themes commonly found in The Daily Reckoning… First, that the US is experiencing a serious “phase transition” in its economy rather than a mere speed bump. Second, a fat tail event, or “Black Swan,” though far rarer than what’s commonly expected in tomorrow’s headlines, will have a more drastic impact on changing the course of world events. Finally, that under certain conditions, even strong, complex, and long-standing systems can have complete and irrecoverable breakdowns.
One system that undoubtedly faces such a threat is the United States. You can read Ferguson’s interesting opinion on the matter in his Los Angeles Times piece on America, the fragile empire.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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But what if Obama does what happened in 1931, like Roosevelt did, seizing everyone’s gold?
He admires FDR so very much you know, he has repeatedly said so.
I also read once that FDR raided all the safety deposit boxes of people as well.
Taking people jewels and anything of value.
People went from secure with luxuries to bread lines overnight.
Also, I would like to site the book, ‘Surviving the Economic Collapse’ by FerFal Aguirre. In it he pretty much explains, that the banks will not be safe…If one was to use Gold and/or precious metals I would not put them in anything but a safe cave! Seriously….