The Good News

David Galland, Managing Director, Casey Research
Jun. 27, 2010

I think this is accurate. Things have changed drastically in just this last year, the news cycle is now dominated by the actually most important news thanks to sites like Reddit and Digg etc. Drudge Report is now anti-new world order news 24/7. The liberty movement has exploded and even the con men on TV like Glenn Beck need to pose as "radical" libertarians to stay at all relevant.

The zeitgeist took about 5 years to switch but now the trends have finally materialized. People are ready to hear the truth, mainly I think due to the bailout robbery (late 2008) and the ensuing economic crash. The worse things get, in many ways, the better things will get.

There is a huge price to pay for being foolhardy, it's a law of nature. The U.S. by and large went along with the murderous wars, the mass theft of the warfare/welfare state, the government bubble, etc. There is going to be either a massive crash or a sustained "managed" collapse, the latter being much worse and possibly violent, I think the establishment is aiming for the latter. (not that I think they will pull it off, I think our government is going the way of the Soviet Union.)

We need to suffer a massive crash, one massive crash in everything would actually be ideal because then we could start the rebuilding process from a clean slate. A sustained depression with the government funneling money around to the least productive companies in our society is the absolute worst thing we could have happen. I think it's likely they will continue to do just that, but the political climate has changed so much it may no longer be feasible.

As an individual I think the best thing to do is buy some gold and silver and maybe get armed. The more rural a place you live in, probably the better. It might be worth it going to another country if you have the means to do so.

Just as important, probably more important, read about Austrian economics and understand the cause of the problems in the world, they're almost all economic and they're absolutely all due to government.

Our current system is completely fiat and akin to wily coyote running off the cliff, our society has not yet looked down. Eventually it will and things are going to have to change, an anarcho-capitalist/private law society is the most accurate description of a free society I've ever seen, setting up another government, even a minimalist one is a total waste of effort and time. - Chris
From Casey's Daily Dispatch:

Dear Reader,

As investors, it’s essential to understand that for the near to medium term, the economic and investment outlook is the polar opposite of the rosy picture painted by officialdom and the quislings on Wall Street.

Because that understanding is so important to your wealth protection, we have taken it upon ourselves in these musings to dispel the dangerous fictions with countervailing facts and, hopefully, informed opinion. 

Depending on how long you have been a dear reader, you have heard us warn – for months now – that the recession wasn’t over; that gold was one of the few secure asset classes and was going higher; that residential real estate would stumble again, and much more that is now becoming apparent to a wider audience.

That said, while it is important to view the immediate outlook for the economy through a justifiably negative filter, it is equally important that we don’t lose hope as that, too, can lead to bad decision-making. 

By virtue of this publication’s fairly large circulation – around 100,000 – I get a lot of email. And I can tell you that there are some dear readers who are really, really upset with the state of things. They feel betrayed by their government, shafted by the colluding banks, robbed of their economic futures by slothful fellow citizens… in short, frustrated to the point of breaking by the sharp degradation of the American dream.

So much so that in some cases correspondents use what might be termed injudicious language – the sort that would be hard to explain in an innocent context, should it ever be dredged out of the ether in order to be trotted out as evidence.

To all of you who are swept by such strong emotions, all I have to say is… take a deep breath. Quoting the title of an early 1980s book by Paul Watzlawick, the situation is hopeless, but not serious.

And so it is that, in something of a change-up, I’d like to focus on the good news in store for America and the world.

Change This Way Comes

 In yesterday’s edition of these musings, I talked about the need for people to “get real” with their expectations for what the government can provide. That admonition was not meant to be of an ethereal nature – a soft chastisement – but rather a statement of the hard fact that the era of unfettered and unsupportable politically motivated spending is coming to an end.

A full recognition of this reality will still take some time, but not much. Witness the quick retribution applied to Australia’s mightily misguided former Prime Minister Kevin Rudd – laid low good and fast by virtue of his unswerving support for a heavy new tax on mining, that country’s number one industry. Reality bites.

One can also point to the austerity budgets now being trotted out by various governments around the world – except the U.S. Sure, at this point they are too little, too late – hardly anything more than a politically motivated rearranging of deck chairs. Soon, however, events on the ground are going to force these governments to get serious about their budget slashing.

Related, the odds grow with each passing day that a new currency regime will materialize from this mess. Of course, as the debate on this new regime grows in intensity, the politicos will attempt to preserve their powers of fiat money creation; that ship is now in the process of being holed below the waterline by the iceberg of reality. We the people, and of all the developed nations, will soon remember the benefits of monetary restraint.

The net result – the good news – is that smaller government, operating under hard restraints – is a near certainty before this is over. And that’s just for starters…

Technology on the Ascent

Most people tend to view the ascent of humankind as a steadily rising line. However, other than the fairly steady introduction of certain lifestyle accoutrements, the quality of life – evidenced by our daily activities – doesn’t really change all that frequently.

Case in point, before the industrial revolution, most people worked on a farm… as they had for millennia. Sure, their farm implements might have improved over time from wood to iron, but they still spent the same long hours, day after day, stooped in their fields.

Then, finally, came the Industrial Revolution, and some sizable percentage were able to show their backs to the fields, moving instead onto the factory floor where they remained in hard toil for another century… at least in what is called the West. In China and elsewhere, this transition is still underway.

Thanks to what I might call the Technology Age, I think that most Chinese will be able to skip the whole factory thing. I say that because while it was technology that allowed humankind to move off the farm and, in time, out of the factory, in the era now emerging, technology will not be so much a means to an end, but both the means and the end.

To make the point, albeit a bit circuitously, I’ll recount my experience at one of the Lundin family’s zinc mines in Sweden. The mine was located smack dab in the most picturesque little village you can imagine. If you didn’t know there was a mine there, nothing would tip you off to its presence. Even more notable was that the mine, both above and below ground, was as tidy and clean as it was unpopulated. In fact, with the exception of literally a handful of workers, the heavy industry of mining and crushing ore was proceeding almost entirely on autopilot.  

This is a good example of how technology is taking the human component out of even the most hardscrabble of industries. While the motives behind such innovation are invariably tied to improving profitability by avoiding draconian laws related to the hiring and firing of workers, the net result is fewer humans forced to work in grueling labor.

Which brings us back to the Technology Age we are only just now entering. By the time this era is fully in evidence, I believe we will see…
  • Essentially free energy. I have no doubt that as the challenges related to burning up our depleting resource of fossil fuels mount, humanity will decisively solve the energy problem – opening up an incredible new era of human advancement.

  • Unimaginable computational power. If you think computers are powerful now, just wait until the widespread introduction of affordable quantum computers. It is said that the computational power of the average smartphone today would have taken a small building to host just a few decades ago. That same sort of exponential leap forward will happen again soon – but it will happen almost overnight and, unlike the early days of computers, this time around entrepreneurs will already have a ton of ideas on the best ways to deploy the new computational power. Including, perhaps, breathing life into the so far largely unfulfilled potential of nanotech.

  • Small government. The steady growth in the size of government, a plague on the land if you ask me, is mostly due to bureaucrats inventing or adopting problems to solve. In the new era just ahead, the large bureaucracies are not only going to be discredited by the disaster they have created but made increasingly obsolete by technology. Entire departments full of paper pushers will soon be replaced by software.

    While it’s not an example I would normally point to while trying to maintain an optimistic theme, I will mention as a case in point the increasing implementation of automated stop light cameras. Previously, if a policeman wanted to catch a person blowing through a red light, he’d first have to drive over to the intersection and secret his car in a position with a favorable view, then wait for the inevitable hot shot to make his run for it. Then the policeman would have to fire up his cruiser, turn on the lights, and risk life and limb to chase down the miscreant and ticket him… hoping against hope as he approached the driver’s side that the guy wasn’t armed and dangerous and ran the red light in his hurry to escape.

    An automated stoplight camera eliminates all of that effort by dumbly registering the offense and, without any human intervention, causing a citation to be mailed to the car’s registered owner.

    But it is more than just automating bureaucratic processes I am referencing. In the Technology Age, so many of the problems – energy, education, health, pollution, etc. – will be so quickly and effectively dealt with that the bureaucrats are going to have an increasingly difficult time justifying their swelling ranks.

    Of course, that leads to the potential for the bureaucrats to invent problems, including the 1984-like creation of new state enemies followed by wars – but the increasingly seamless and instantaneous communications between millions of networked individuals will make that sort of subterfuge as difficult to pull off as it was for Al Gore to keep his attempt at securing a happy ending to his massage in Portland, Oregon, from the public record.

  • Life uninterrupted. The steady solution to so much of what ails the human species will give rise to a new set of human priorities, priorities we can only hope will revolve around healthful and philosophical pursuits versus, say, Rollerball. And once the world’s scientists, armed with the new supercomputers, turn their attention to it, extending the upper range of a vibrant life should be light lifting.
So, how’s that for optimism? A long and largely leisurely life, where the biggest challenges you’ll face in a day will be the decision of what delectable to eat and which of the world’s many entertainments you’ll avail yourself of.

Threats to this utopian vision? Someday I may look back on this edition of the Daily Dispatch in embarrassment, but I don’t see how the world just described – or something close to it – will fail to materialize.

I say that because I don’t see how the next level of computational power can be derailed, and that is key to much of what is envisioned. Likewise, the social networking technologies and cultural adoption of same, key to keeping future power-grabbers in line, are well advanced. The rest should just pretty much fall in line.

The world as we know it will soon be dead. Long live the new world!

Happy now?

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