But when the melancholy fit shall fall Sudden from heaven like a weeping cloud, That fosters the droop-headed flowers all, And hides the green hill in an April shroud; Then glut thy sorrow on a morning rose…
— From “Ode to Melancholy,” by John Keats (1795-1821)
We depart from our usual diet of “doom and gloom” today to explore some of the many reasons to be optimistic, or at least hopeful, about the future. But let’s not get ahead of ourselves. Before we can look forward, we must determine where it is that we presently stand. Let us first get our bearings…
The eurozone is back in the news. Yes it is true, Fellow Reckoner, that, as Eric Fry observed in yesterday’s issue, “The Greeks are probably not any more bankrupt [today] than they were last week, but neither are they less bankrupt.” And it is true too that, while the problems on that continent are largely related to matters of insolvency, chattering policy wonks prefer to prescribe and administer “solutions” that might typically be employed to address problems of liquidity. We refer here to the ongoing and accelerating bull market in bailouts, cash injections and various “do-something” rescue packages currently befalling the eurozone. It is a standard misdiagnosis by a class of econo-quacks forever determined to ignore the first rule of medicine — primum non nocere (first, do no harm) — at any and all costs. As such, we shouldn’t be surprised when the nasty symptoms reappear from time to time…
Right on cue, the “financial cartographers,” as Eric referred to them, “re-discovered Europe” yesterday. And with it, they also re-discovered its worsening debt crisis. European equity markets fell sharply in Monday’s trading, led to the downside by European bank stocks. Markets in the New World responded in kind. The Dow, after having fallen more than 230 points during the day, ended the session 100 points lower.
Then, this morning, we woke to discover that those absent-minded cartographers had again misplaced their maps, apparently discombobulated by a distracting bevy of “productive” debt discussions between Greece, the EU and the IMF. It goes without saying that the talks did nothing to turn bad debt into good money. They did nothing to ensure that profligacy be punished and prudence rewarded. They did not raise the dead nor did they heal the sick. They did, however, involve a lot of gasbagging from the same people who didn’t see the crisis coming and who grossly misread it when it eventually arrived. European markets rallied in response today, the Stoxx Europe 600 ending the session up almost 2%. Bravo.
Similarly, investor confidence in the US was also buoyed today by speculations that the Federal Reserve will provide more stimulus of its own. Economists are betting that B.S. Bernanke will announce tomorrow a plan to replace short-term Treasuries with long-term bonds, a move dubbed “Operation Twist” for its goal to bend the yield curve. More trickery, in other words. More magic elixirs. More quick fixes to ensure a long, slow correction. More shortcuts on the road to Hell.
But wait…wasn’t this supposed to be an optimistic reckoning? Or at least a hopeful one?
Ahh…but it is!
We’re amused by Euro-quacks and Yankee fed heads alike. Encouraged, even. They’re trying to hold back a tide of punishment and correction with a sandcastle built of wretchedness and coercion and lies. They’re trying to rig the laws of arithmetic to rescue their planned economies, attempting to re-write the rules to circumvent the “hard math of demography” when it comes to Social Security and their various other unserviceable programs and promises. They’re trying to float leaden balloons and to make 2 + 2 equal 7.
They can’t do it, of course…which makes watching them writhe and struggle such a delight. After all, these are the same people who legalized stealing (for themselves)…and yet are still broke. It’s the same bunch that outlawed competition for national defense…and who are lately seen collapsing under the weight of their own grotesquely oversized military. It’s the same idiot class that, in the US, mandated use, exclusively, of an “official currency”…a currency that has lost 97% of its value since they set up an agency to protect it. It’s the same folks who declared wars on poverty, drugs and terror…only to inspire bull markets in all three.
So yes, Fellow Reckoner, we’re both hopeful and optimistic; we’ll be glad to see these floundering, self-serving governments go to Hell. The quicker the better.
In the meantime, the individuals against whom the state rages, continue innovating at a rate never before seen in history. Much of the technology that enables you to read this very page didn’t even exist a generation ago. And yet today, WiFi networks are sprouting like Afghan poppies in the farthest reaches of the world, affording an emerging cohort of skeptical twenty-somethings the ability to share information and communicate like never before. “Twitter Revolutions” have brought down (and continue to threaten) entire governments across the Middle East and North Africa and encrypted “drop boxes” allow for the publication and dissemination of the state’s dirtiest, darkest secrets and misdeeds. Cyber currencies, trading outside the scope of government interference, have gained serious traction in the past few years, appreciating thousands of percent even as senators and congressmen rail against them, watching hopelessly as their own state-backed currencies remain locked in a perilous, “race to the bottom” death-spiral.
In many ways, the world is splitting in two, right before our very eyes. On the one side, policy wonks bicker about where to spend money they don’t have to prop up programs that will never — and can never — work. But it’s a farce. Next to what’s going on, on the other side of the split, at the cutting edge of science and technology, these conversations are most generously described as juvenile.
In the United States, for example, one of the big questions bandied about the political arena is Social Security: will the moribund program survive longer by cutting benefits for payees or increasing inputs for payers. Or both? And even then, over the long run, will it survive at all?
Now consider this slack-jawed claptrap in the context of what’s being discussed in the scientific community. A short while back, we ran a column by Patrick Cox, editor of Technology Profits Confidential. Here’s what Patrick is talking about:
“In the last 100 years, improvements in medical technology have had an enormous impact on life expectancies. In America, life expectancy has gone from 47 years in 1900 to 78 years today. Although life expectancy has improved, the maximum human lifespan of 125 years has not. Few of us make it that far, of course.
“Big things, though, are happening in regenerative medicine and anti-aging technologies,” continued Patrick. “Clinical evidence is mounting that one of the most important mechanisms of human aging, telomere shortening, can be arrested or even reversed with drugs that induce telomerase production.”
What happens to the Social Security math if life expectancies suddenly jump by 10…20…30 years…or even more?
“There is no guarantee that those who are working in this area will accomplish their goals of stopping or reversing the cellular aging process,” cautions Patrick. “This is, however, an area that investors in transformational technologies should be monitoring closely. So consider this a heads-up.”
The fact that “reversing the cellular aging process” is even on scientists’ radars — and that thousands of our brightest minds are tirelessly working towards achieving it — is truly an amazing thing…even more so because it’s light years removed from the comparatively Neanderthalic babble echoing around the halls of Congress.
The great English poet, John Keats, was just 23 years of age when he penned the third of his six odes (quoted above). Less than two years later he would succumb to tuberculosis, his “family disease.” The attending physician, Dr. James Clark, repeatedly bled Keats, a practice that was common enough at the time, but which almost certainly hastened the young writer’s death.
Today, almost two centuries after Keats’ premature passing, governments of the world continue to employ a “first, do harm” approach to curing the ills that infect their respective economies. It is all too easy to become mired in desperation, depression and melancholy when considering their persistent and destructive actions. But there are morning roses in this world too. Let us turn our gaze towards them.
Joel Bowmanfor The Daily Reckoning
Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
Call me a cynic, but I believe that people living too long is a drain on society. I’ve seen people retire at 51, and spend the next 35 yrs consuming, and not producing anything of value. They are driving up the cost of things without contributing anything to the production of them. If you have a stagecoach (economy), you want a young team of horses pulling it. That ain’t the USA.
The US and much of Europe are broke. When interest rates cannot be suppressed by the Fed and rise to 10% or more default will come. If Republicans can defeat Obama they can slash spending and avoid this outcome. Clearly, the average person has to provide for his own retirement and medical care. You cannot live 30 years without working and expect to survive.
Good stuff Joel … As usual
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When you've got a room full of 200 oil insiders scratching their heads at current high prices, something's gotta give.
For most investors, it’s weird to think of stocks as their go-to investing option.
The petropoly has bills to pay and setting the price of oil was a simple way to balance their budgets.
Investors don’t seem to care that what's propping up their investments is what will ultimately destroy them: government monetary policy.
For the next decade the energy revolution will be likely confined to the US, displaying the robustness of American entrepreneurship.
Why the Sage of Baltimore’s commentary persists through America’s changing times.
After attending Platt’s oil conference in London I want to relay two important themes you need to know.