by Jack » Fri 03 Aug 2007, 16:13:57
$this->bbcode_second_pass_quote('NotMyBlood', 'O')r is it just like the conservative experts predict - like kunstler. Its a Long emergency...
That's it, exactly.
Once upon a time...decades ago, back in the mid 1970's...I played around with futures a bit. At the time, there was a much-touted drought in the Midwest, and the evening news had sad-faced farmers holding dead wheat plants in their hands.
I lapped it up, like a hungry kitten eating cream. For you see, I was long some wheat contracts. I felt certain I would be rich by the next afternoon at the very latest.
What I didn't realize was that the
news was already out there for everyone to see. Which meant that the market reaction had already taken place, from producers to suppliers to speculators. So I turned a modest profit, but nothing great.
Now, contrast that with Exxon (now Exxon-Mobile) stock. In June, 1980, it was $30 per share and paid a dividend of $3 per share annually. It's presently up 16 fold (after adjusting for splits - and that's without adding in those accumulated dividends. Notice the immense difference between the short term (exciting, not significant) and the long term (boring, highly significant).
We tend to see the world in terms of the short term - months, at best, and more like weeks and days. So we look at the reports and become quite excited when Gwahar is down by 0.000001% versus yesterday. (I don't exclude myself - I'm well aware that I'm as susceptible to good doomer-porn as the next gloom 'n doomer).
I don't think we'll see it work that way. A global economic crash that reduces us all to zombie hordes may be possible, but it's unlikely. It will, as you outline nicely, be a slow, painful grind. A fast crash would destroy old patterns, realign attitudes (perhaps) and let us begin adapting. The "long emergency" will tempt us to hold on to the established ways of thinking and doing, and it will hurt (at least, figuratively). And we'll lie to ourselves about tomorrow being better.