I was going to buy a bit today, but with the late turn around will wait a while. I have been buying weekly the past month. Simply from a broad view, recently we have been able to buy at prices we have not seen for a decade.

I am quite enthusiastic about the carnage and see it as a great opportunity, not just to level the monetary system but politics as well. Once again (as it is every day) the sky is the limit for new ways to form a community. Only know are many able to see this. A nice crisp and clear fall day!

-mason

the credit-card-bubble is still waiting to burst.

Indeed. I know that will hurt the US and UK. I don’t know about credit card habits/debt in other places, though.

Are all Europeans in as much credit card debt as Americans and British?

agreed, the credit crisis is a big concern for me. We’ve been charging and spending with no regard for the outcome – I’m wondering what that brings us.

what about the bubble of reserve currency?

As far as I know, it’s a very “american” way of life to live on credit that much (I’m not sure about the british). In germany I know many people who don’t even own a credit card (including me), but then again, the crunch will hit world economy same like this one, because all the “financial products” are packaged and sold worldwide, and the decline of consumer demand will especially hurt economies like the german, which is strongly export oriented… you just can’t seperate economy by nation anymore.

Australia has a lot of credit card debt. I’ve just finished paying mine off and reduced my limit to $1000. It’s a good feeling to have no debt.

and citigroup are yet to have their time in the spotlight

Isn’t this really the “credit default swap bubble” bursting? Or perhaps in general, the “making money out of absolutely nothing bubble” bursting… which is really the same as all the previous bubbles.

With the high percentage of the US GDP driven from consumer spending; driven from home equity withdrawals and credit cards unfortunately, I’m afraid we all may be on a slow moving train wreck.

I don’t know about all of you but other than essentials we’ve pretty much stopped spending money and aside from our mortgage we’re debt free. I can only imagine the panic of a US household with a declining home value and investments, increasing debt and decreasing cash flow.

I see (hope?) for a future in suburban/urban homesteading like http://www.pathtofreedom.com/. Certainly seems like the kind of social / economic stimulus we could all use and get out of all these first and second circuit panic states.

Based on (1) past major down-trend-slopes (e.g, 1966 – 1973), (2) the loss of $24,000 in equity ($8.4T) for every person in the USA over the last 10 days, (3) the staggeringly massive public and personal debt that remains hanging over our heads, (4) and the dire signal given by the IMF president today (”the global financial system remains on the brink of meltdown”)…

Based on all that, and especially the historical trend lines, I think the Dow will dip to roughly 6,500 (S&P 700) over the next few weeks or months. There will be bottom feeders propping up the markets for this period, but the overall trend will be down.

We elected politicians who created the laws which allowed this mess – it’s not Wall Street’s fault. It’s OUR fault. In reality, this meltdown is very healthy. The key will be rebuilding the global economy with real wealth, not derivatives or debt instruments. Real goods. Real services.

But there’s a bigger problem. As we’ve seen recently, our legislative branch is controlled by global corporations. It is not controlled by “we the people.” If we want to change the economic landscape, we need to effectively block the flow of corporate cash (and other incentives) from the legislature.

I doubt that will happen without some fairly major political upheaval – which generally happens when economies tank. I wouldn’t look to Obama or McCain to provide the kind of leadership necessary for these changes. Obama was the second largest recipient of lobbying donations from Fannie Mae. Barney Frank was 3rd.

I started taking an online class offered by Chris Martenson. It is helping to break down some of these brain bending concepts like, “Money is loaned into existence.” Apparently, the concept of credit underlies the entire system. I am about half way through the course (it takes 2.5 hours to listen to the whole class.) Hopefully, I will be a lot more up to speed after I watch it two or three more times. It is called, “The Crash Course.”

GM at $4.89 could be a long-term speculative buy-and-hold. Too big and too iconic to fail.

Maybe the next President should legalize marijuana? Think of the boost to the economy! A new tax revenue stream, less burden on the War on Drugs…

All that and people would just be significantly more relaxed and open to other possibilities. And the muchies. Don’t forget the munchies.

It could happen. (!)

My prediction is it’s going to be a little difficult a few months. no more than 6-9 months.

Then ,like Master Rushkoff taught us,(i’m on my knees depositing some flowers in front oh his portrait) Obama will point out the enemy: *OIL*. And his wonderful speech made under a big American Flag, surrounding by all ex presidents portraits will finish by WE CAN LIVE without OIL. We are going to build this new society by sending a man on Mars without 1 mililiter of OIL and we will do it in 5 years.

We will do it with American technology, etc… like we always did.

From now on I urge all the private and public sector to put all their efforts( money) on that venture.

2 weeks after 1027 companies will list on NASDAQ in the new ENERGY market crated for that Purpose.

Because money is there, we just need to show to the greedy that there is a bigger BUBLE out there.

khalil, you’re on the right track. fossil energy is the #1 issue underlying our collective condition. until we can develop cheap, abundant energy to fuel our economic engine, we will see the global economy ride an increasingly bumpy roller coaster of growth (energy demand up) and crash (energy supply limits = price spikes). We just saw the first warning shot ($150/bbl oil).

Directly related to this is: population, carrying capacity, structural sustainability. Our politicians didn’t see the credit crisis coming, yet there were many voices warning them. Likewise, they won’t get the connection between energy and economy until it’s too late, I fear.

Obama has promised to prioritize energy independence and alternatives. But, like all politicians, I don’t trust him, nor the legislature he must work with to pass his laws. I fear we’ll see a real “Manhattan” energy project only after it is too late.

David, khalil, Josh, Hello,

This may be a little Cheneyesque, a little on “the dark side” as it were. There is all that good poppy production going on in Afghanistan. I think we should either wipe it out or seize and develop it with the Afghan government. We think Iraq is sitting on a cash cow surplus. Just check out Afghanistan!

Oil itself has breed criminality and violence, but only because US addiction to oil (according to many for a long time) is no vice. I think we need to get out of Afghanistan in any case. Exploiting the poppies creatively before the Taliban et al exploit it for their purposes might be a good way to finance an exit strategy and strengthen Afghan government. The idea is inda like Iran/Contra, but in the fresh air and light of day it might be worth considering.

I’d be interested in what the UN might have to say on global legalisation of drugs. Apart from the fact Russia would probably veto anything substantive, it would be interesting to see which countries would be interested in thinking of drugs as a legal, but controlled resource. A lot of interesting things could be done with the revenue.

The blue bubble and the connectedness of us and our resources as our focus, a lot of possibilities exist.

-mason

not sure the UN would go for the legalisation of all drugs mason – why do we need opium? why do we need big pharma most of the time? healthier lifestyles/better diets, ie. growing food rather than cash crops is a better way to go with so much hunger being prevalent today. I know we grow ‘legal’ opium in the UK, seen it with my own eyes, don’t see why everyone can’t do this if its absolutely necessary for medicine? better to be a wee bit less connected in my humble opinion. can’t see connectedness working right now..? cheers.

i follow, tim.
even the word “connected” can seem like a big pharma pitch these days. poppy dollars won’t help with disengagement from iraq or (in the best sense) with connection to others/other things. just rattling around in my head.
-mason

Mason, Tim, All
Actually, nationalizing (privatizing?) the opium trade in Afghanistan might not be a bad idea. I heard a show, possibly npr: worldview, where the guest was suggesting that we channel the opium trade into quality morphine production.

Apparently, there’s a real need for this worldwide. Plus, Afghanistan’s bioregion is apparently well suited for poppy growing (not bananas)… The other guest, some HigherUp from the Military just could not wrap his brain around the possibility and pretty much dismissed any suggestion as “living in some fantasy land”. However, with the right mix of NGO’s / Halliburton / Blackwater, it might just be possible. (!) But in the end it just doesn’t jive with the whole War On Drugs deal and Pretty Much Everything They Believe In.

I’ll see if I can find the link.

btw. Mason, not sure if you read my intro on the forums but I’m helping Doug out with moderating. I’d appreciate any insight you have on some of our thoughts about improvements. (Subscribe to forums!)

- D.

So far, my call appears to have been within minutes of the actual bottom. Remember, though, I think of it as a mid-term bottom (in my meaning, months at most). There is more bad stuff to come, as far as market prices are concerned.

I’ll try to call the next “top” as well. I can’t promise to know the duration of each bottom and top I try to call, but I will attempt to identify peaks and valleys as they form.

It’s like it is on the street and at home. After a bit of conversation there are those i’ll ask what they think of the market. You are certainly one Doug and i appreciate it!

I take it you think the attention to banks and guaranteeing loans is the wisest short term action they have come up with so far?

I actually ended up buying Friday.

-mason

I don’t see how you can be such a vocal critic of an economic system that so fundamentally discards intrinsic human value and still want to play along with the madness that is the stock market.

WTF Doug. Teach me how.

You can’t have it both ways? Of course you can. On the one hand, we spend our effort restoring local value creation, and replacing market dynamics with social ones. Built communities that understand how to exploit abundance instead of forced scarcities.

Meanwhile, do what you can with the capital you have to guarantee as much security in the greater economy as possible. We still live in a world where regular old money sends our kids to school and pays for food and heating. It’s not necessarily hypocritical or inconsistent to prevent the diminution of one’s place in the economic game – especially when that game has real impact on our lives.

Best of all is to take energy/value from the latter and feed it into the former. I went and bought as many “Comfort” dollars as I could from the local organic restaurant – the owner wants to expand but can’t get a loan from the bank. So we invest our “real” dollars and get back an extra 20% in food when we patronize the restaurant. He gets his money cheaper than from the bank, and we get more food for our money.

This involves taking winnings from the speculative marketplace and pumping back into the real local economy.

If I didn’t know how to take the money I make from a corporate-published book and preserve or grow it in the markets until I’m ready to invest it in the real local economy, I wouldn’t be able to do that.

Plus – and this is really the core of it – I think it’s fun and illustrative to analyze what’s going on in the market. Calling bottoms or tops or whatever is a way of testing certain hypotheses I’m using to understand the way credit and markets work.

I see it all as a kind of graduate seminar in speculative economics.

Douglas,

I was thinking about the “HOLON” concept and how could that apply here. My knowledge on that subject is limited so my question is for you.

How “HOLON” can help explain credit?

THX for thinking about it when reading it and I get down on my knees and deposit flowers in frony of your portrait

; )

You mean like Koestler and the idea of things being autonomous in their own right yet also part of a larger system?

I don’t know that it would explain the whole thing, but it could be an interesting lens from which to look at the relationship of the real economy to the speculative one. They have different purposes but they are still interrelated.

Hi Khalil,
Never had heard of Holons. As the theory suggests, however, one has to consider other Holonic Parts that operate in one hierarchy and, hence (depending on the other hierarchies), may eliminate some Holons that function holonically in another. In a word, some parts lose their holonic property across various hierarchies, disciplines, situations and applications.

This is suggested, in part, by Steven. Gambling or Speculating on a narrow range of inner hierarchical Holons can yield profit in certain situations, but pressed too far can result in collapse.

Shakespeare wrote:
“The quality of mercy is not strain’d,
It droppeth as the gentle rain from heaven
Upon the place beneath. It is twice blest:
It blesseth him that gives and him that takes.”

I consider Confucius as well in stating that Nature is our first instructor in and model for Holonics and harmony. “Gentle rain” is a holonic for all sorts of hierarchies. Credit ought flow gently and (depending upon periods of dearth or plenty) sometimes loosening and other times tightening.

Exploitation of any property or thing damages it and the system or person who exploits it. Hence, exploitation is twice cursed.

What troubles me is well meaning individuals hoping to store energy or capital for future giving or spending trust the system of exchange will not be endangered by excesses. Too often, the vast majority of decent people suffer for the actions of a handful of people further up the hierarchy of the system. This is why we are supposed to have regulations to keep the markets closer to the model of Nature, which, properly understood is capable of great bounty and some periods of scarcity.

As we understand Nature and our abilities and influence, we can and should develop and preserve the abundance while at the same time guard against the scarcity. Instead of creating worthless assets out of debt and exploiting false notions of scarcity, we should do as Doug suggests: take energy from both the scarcity and abundance models and invest in what i would call the sustainable-abundant model. I intend sustainable to imply a consciousness of possible Natural scarcity or calamity not a Market driven exploit,

Two fragments from Pound’s translation of the Confucian Odes:

“No tool ‘gainst tiger
no boat for river.
That much, no more
and they know it;
but above all to be precise
at the gulf’s edge
or on thin ice.”

“Former prosperity stood not on a chance of weather
nor does calamity now.”

Thanks for that explanation Doug. I guess I can be a bit naive about these things, not having any cash to preserve or grow. Or children to feed, keep warm and send to school for that matter!

I wonder whether some of the things you said are scalable to mainstream popularity. Like the pumping of winnings from the speculative to the real economy, as a big workshop session in this graduate seminar…

My own thoughts about money have gone something like this lately (mind you, very much a work in progress): if we are headed towards a paradigm shift with regard to our egoic state, in which the key is to transcend hope and fear, then it may be useful to first maximise our hope & fear in order to make a ‘killer’ transcension. This is how I could see the money system working as a blessing in disguise, by connecting a whole planet’s worth of people together in competitive egoic scarcity, which then can be transcended on a huge, collective level.

The method of transcension could be something like learning how to forge and express friendly and creative relationships ‘on’ money, by popularizing a friendly and creative stance towards money transactions themselves. Tag them, make them aggregatable, make them enable buyer and seller to experience mutual creativity.

Remember how in Die Hard 2 the day is saved when the good guys find a way to communicate to the airplane, by using a normally beeping radio frequency to transmit regular audio and spoken word? This is how I feel about money. Let’s look at it as this legacy infrastructure that we can utilize beyond its intended limits; an API whose functions we can overload to communicate more meaning.