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The Slope Of Hope Economy And The Persistence Of History

Economics / Economic Theory Jun 06, 2014 - 01:13 AM GMT

By: Andrew_McKillop


The Faith Based Slope of Hope
Writing on the website The Slope of Hope, June 4, Tim Wright in 'The Persistence of Memory' said that: “....honestly, I don’t have visions of a group of thirty rich men sitting around a gigantic table at the top of a skyscraper, smoking cigars, chortling villainously and plotting humanity’s path. I do, however, firmly believe that the central bankers and political leaders of the largest countries were shocked at what happened late in 2008 and vowed Never Again”.

They effectively decided they had to sabotage the economy “sine die”, forever, or until “God makes a sign”.  Wright says they were only obeying embarked instincts and responses, that is the lure of Prosperity Now. This is what the people want, and Problems Later do not interest them. So as Wright says the stock markets, at least in the G7 countries and (with increasing effort to repel reality) in the emerging economies, simply have to go on going up.

Slowly, perhaps, but up nonetheless. The central bankers “do the necessary” and create whatever actions are needed to keep equities floating higher. Then the problems will arrive. What a surprise!

Tim Wright said this is totally pre-ordained. “All the stock analysts, all the talking heads on television, all the bloggers, all the financial journalists, and - yep - you and I - really just need to hang it up”. “We all just need to quit. We're wasting our time and emotional energy. Every. Single. Day.”. He said that in the existential crisis we have, what would have seemed insane only five years ago, is New Normal.

Equities and all kind of financial assets “bounced” out of the 2008-2009 crisis – and this certainly had nothing to do with the real economy. As Wright puts it: “The prospect of the exact same reality for the next five years.........and the next...........and the next..........seems equally insane. And equally possible”.

The impossible is possible and the improbable is certain!  Welcome to the Slope of Hope.

Tim Wright may or may not accept that the financial existential crisis – which he talks about – only reflects a general cultural implosion. In previous avatars often called The End of History this is followed by an Afterwards. History starts again but on a different footing. The process is well known – if denied for various reasons, plenty of them explainable.

In the economy, denial of reality is rock solid. This is a numbers game in which a full-time industry of liars earn a living from Market Spin, to the extent they fool themselves - proving the old saying that “The best liar is one who believes his own lies”.

This firstly provides another explanation why equity markets rise every day – especially on Tuesdays – but at a deeper level shows why the process is so dangerous. There is no way the process can stop until economic reality imposes itself, needing the memory of previous reality.

Persistence of Memory
Two years into the Great Depression, Salvador Dali, in his own way sensed that the social perception of reality – starting with time itself – had been altered. The Depression added an economic dimension to a mixture of western historical crises, brought together in the mass slaughter of World War I – called the Pan European Civil War, by several historians. Previous history had been shattered by the war, but nothing clear lay ahead. The 10-year economic and stock exchange boom of 1919-1929 ended in total collapse. Europe was split into liberal capitalist democracies and the capitalist tyrannies of Hitler and Mussolini. The USA was isolationist and wracked by the Great Depression. Russia was Stalinist.

Salvador Dali said that his paintings were part of a Surrealist tradition, but he preferred to call his artworks “hand-painted photographs of the dream”. As you may personally know, you can wake up during a dream sequence thinking it is still the middle of the night – but it is already morning. The clocks which you thought regulated you dream melted down.

In the 1930s, popular culture in the West was forced to accept the very fast development of Quantum Physics and the principle of Uncertainty. This was popularized through a Doomster slit window or tank turret, but an indeterminate economy ruled by “pure chance” provided a very satisfying and instant explanation, for the masses, of why the 1929 crash happened. It was “pure chance”. Therefore nobody was to blame – including the bankers and brokers! Greed and stupidity had nothing to do with it.

Due to the destruction of time, the event could be sloughed off, forgotten, and then denied in a short period of time – which is exactly the role of our glove puppet media, today.

Destroying cultural and social memory, however, does not sabotage History. Other and more powerful clocks keep on ticking. The persistence of economic memory is surely and certainly one of the gravest threats faced by the spin doctors and dreamers of Prosperity Now. Previous metrics and economic parameters, which can be measured, have to be declared null and void. Old Hat and unrelated to the dream of Prosperity Now.

The Dreamtime
Australian Aborigenes set themselves the question of why, when the White Man came, they let themselves be slaughtered like rabbits. No resistance, but it was not passive. It was “ordained by culture” due to Aborigene nations or tribes believing the Ancestors had returned, wearing white faces. They had punished the Aborigenes for their loss of faith in the end of Dreamtime. It had to end – but they did not believe. They had believed the Dreamtime was outside of time, and its end would be signaled by events far more important than a few white men arriving in large wooden ships at the end of the 18th century.

They later believed the whites were not the Ancestors returning – but sent by the Ancestors, at their bidding.  The whites themselves were “inside the Dreamtime”, and only harbingers of coming change.

This way, the Aborigenes saved the essential cultural role of the Dreamtime. A complex set of beliefs, about time, during which only special events occur outside of all control of the Aborigenes. Not so much victims, but observers of this special time, their culture said it would end – but it was not possible to say when. Dreamtime's end was indeterminate. The Dreamtime was indifferent and neutral.

This is exactly the role and mindset of stock exchange punters. Forced and condemned to believe in their special time, events, and Dreamtime Economy, they must forever fear the Unknown.

Every kind and type of financial forecasting method – from astrology to algorithms, to fractals and chaos theory – is used to fend off the Unknown but coming end of the Economic Dreamtime. Taking a leaf out of Aboriginal cosmology and epistemology, neither the start of Dreamtime, nor its end, were or are fixed events. Only the before-and-after change of state is known and accepted by the Humans with a large range and degree of cultural methods, for accepting the change. This is classic post facto reasoning.

In an exactly similar way, in late 2007 in New York's Wall Street “nobody believed” in toxic credits and an overheated realty sector, let alone the fragile DJIA at “historic highs”. It was all New Normal. There was no end in view.

Our question today is simple but the answers have to be complicated. How and why did we slip back into the Economic Dreamtime? Why did we deny it had to end?

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2014 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

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