Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
In the same category

A Delusional and Dysfunctional State

IMG Auteur
Published : February 05th, 2013
515 words - Reading time : 1 - 2 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Editorials

To come to grips with our current economic problems we should first consider risk and whether real risk is being exposed and discussed in an open and transparent fashion. If it is, we can begin a public dialogue on solutions. If it is not, we need to ask the question why not?

When risk is masked, cloaked, hidden or mis-stated then you are going to formulate poor public policy. By masking risk we will consequentially become delusional about the the associated cost, consequence and elevating level of that risk.

Risk and cost are being hidden from us through unprecedented Monetary Malpractice, which by artificially lowering interest rates for a prolonged period, is mispricing risk, fostering malinvestment and allowing the economy to become delusional and dysfunctional through moral hazard and unintended consequences.

Financial Repression, as a central reason for hiding risk, is forcing the public to take on hidden and elevated risk in pursuit of ever shrinking yields.

Unfortunately the public is acting out what Charles Hugh Smith refers to as the "Spoiled Teenager Syndrome" within what he describes as the "Parasitic Financial Sector". A sector that now commands over 30% of corporate profits, 44% of the equity markets and 5.2% of GDP. A sector where the neo-liberal supporters of the central state, knowingly or unwittingly, both enable and enforce its predatory practices.

This sector has fostered the "Spoiled Teenager Syndrome" and is creating two fundamental problems. First it is not a productive use of capital and is bleeding productive capital from the US economy. Secondly, it is capturing the best and brightest in the workforce. As a leading Chinese government economist recently observed:

"In America the best and brightest are not creating products that people around the world want, but rather are engaged in trying to pick the pocket of others"


Psychology of Delusion

As humans we prefer illusion to the risk of adaptation. Much has been written about cognitive biases and errors, for example Confirmation Bias (seeking out data that supports our positions). Other well-known cognitive biases include:

  • Positive expectation bias
  • Neglecting probability
  • Post-purchase rationalization
  • Observational selection bias
  • Bandwagon bias
  • Projection bias (everyone is like us)
  • Anchoring effect (is it really 20% off, or is "20% off" the retail price?)

These fail to describe the tremendous appeal of delusion. Remaining in a delusional state feels safer than risking the disruptive consequences of adaptation, innovation and change. So we cling to delusion as the "safer bet." But decisions based on illusion necessarily yield catastrophic consequences.

Politicians understand that people react negatively to unwelcome realities, and so they sustain a state of delusion with short-term politically expedient "kick the can down the road" policies and continual reassurances that the increasingly unstable system is permanently stable.


Our Delusional and Dysfunctional State

  • False Entitlement Program Promises,
  • False Expectations of the sustainability of the current standard of living.
  • False Employment and Career Expectations,
  • False Expectations of the value of deficit spending and money expansion,
  • False Beliefs in the levels of equality and opportunity,
  • False Beliefs in the motivations and success of government public policy initiatives


29 Minutes, 25 Slides

<< Previous article
Rate : Average note :5 (1 vote)
>> Next article
Mr. Long is a former senior group executive with IBM & Motorola, a principle in a high tech public start-up and founder of a private venture capital fund. He is presently involved in private equity placements internationally along with proprietary trading involving the development & application of Chaos Theory and Mandelbrot Generator algorithms.
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
First Report since April, 2014
05 FebAndy_K1
Jason, One of your articles written way back is one of the reasons I started paying attention to silver and shortly thereafter started to ...
Something has Changed in Gold St...
06 Febneville
No nothing strange has happened in GOLD stocks....absolutely nothing.....The fact of the matter is that you byrne have been playing the man and...
The Revisionist Theory and Histo...
05 Febovertheedge
"The key is in the hand of the U.S. government. It is the same key that was used to lockthe U.S. Mint to silver in 1873, and to gold sixty years la...
First Report since April, 2014
05 FebS W.1
Here I was just 2 days ago thinking whatever happened to that evangelical silver guy. Low and behold up he springs, like some spirit from the g...
LBMA Silver “Price”: A Perfect S...
03 FebS W.
There is no doubt that the Comex can be used as a casino for those who want to trade Silver up/or down or maybe some just wish to take a small punt...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
Bron refuses to EVER admit this market is a Casino and the disconnect between Paper and Physical is a big clue to this
LBMA Silver “Price”: A Perfect S...
30 JanS W.
Usually I enjoy Bron's take on things,but to be perfectly honest, I can't understand 95% of what he his on about here. I get the feeling that h...
ANOTHER NAIL IN THE U.S. EMPIRE ...
30 JanDemosthenes0
Very naive and pretentious article! The author thinks he knows everything and yet knows next to nothing. Shale gas producers are neither stupid n...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Lara Expl.(Cu-Zn-Au)LRA.V
Revised Resource Estimate Report Filed for Maravaia Copper Gold Deposit
CA$ 0.34+1.47%Trend Power :
Corporate news
Black HillsBKH
Black Hills reports 4Q loss
US$ 50.90-0.59%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
Gasoline Inventories Rose Last Week despite Fall in Production
US$ 23.68-4.71%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel (X) States Ratification of Labor Agreements
US$ 7.77-2.14%Trend Power :
Corporate news
Black HillsBKH
4:34 pm Black Hills Corp beats by $0.04, misses on revs; guides FY16 EPS below consensus
US$ 50.90-0.59%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Reports 2015 Fourth Quarter and Full Year Results
US$ 50.90-0.59%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
TransCanada to Sign Substantial Agreement to Benefit Québec Economy
CA$ 48.65+0.16%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
4Q15 Crude Oil Prices: Fallout for the Energy Sector and SPY
US$ 23.68-4.71%Trend Power :
Corporate news
Comments closed