The Cycles Of The Human Capital

May 11, 2015

One must go beyond the ‘Housing Crisis’, ‘Lehman’, ’Dot Com’, or LTCM. Beyond the Peso Crisis, before the Gold window closed; go back to the lead up to the Great Depression.

We must go backward to frame this reality. Backward in time.

But at each point we must let the ‘accepted’ interpretation dissolve as we move on to the next.

The period roughly spanning the end of the Civil War, up to the banking panic of 1907 and the joint venture bail out between ‘the original’ J.P. Morgan lead directly to the creation of the third U.S. central bank.

People think that the times were simpler – or we picture a vast open space, a Wild West, a little town caricature from the movies. Something soon will trigger the return to equilibrium and a violent return to reality. If we let it.

The more you melt away players of time, the closer you get to the heart of the matter. From there, at that point – the uncorrupted principles of equilibrium – a glimpse of real growth and progress. The accumulation of real capital that can be used.

Risk based on simple calculations, and in the spirit of finding better, more efficient and less costly solutions to pervasive problems.

Today, the irony is that we assume that math will ultimately solve the problems of behavior. That we could develop an equation that could describe the invisible hand once and for all–when it’s mathematically impossible to pay our debts.

Intervention just makes it worse. 

Here’s one glaring, obvious example:

Punk Q1 GDP Wasn’t Surprising: It Extends A 60-Year Trend Of Exploding Money And Imploding Growth

And after yesterday’s punk GDP report in which growth stayed above the flat-line by a hair (only due to a massive inventory build), the contrast is even more dramatic. Real final sales actually declined by 0.5% during Q1. And more importantly, it reflected a mere 1.1% annual growth rate since the pre-crisis peak in the winter of 2007-2008.

There is no way to really manage a system like this. It’s not a matter of counting cogs and factories, or guessing about the whims of a sometimes invisible hand. We’ve have traversed all the rabbit holes to a truly dark time.

Dissent is largely put down, the whistleblowers have been outcast. The newly awakened minority asks: When?—having just arrived at the tortured moment of realization that comes without hope. As if a desire to learn from history is a desire to withhold anesthesia or penicillin.

The slavery of today just looks more palpable and comfortable. It is still slavery and coercion.

At some point, the masses will awaken from the thought matrix. Unfortunately, it will be too late.

The answer to ‘why’ is already known. The unraveling began in the creation. It’s been taking place ever since.

The fact that you are aware of this and these words is all you really need to know in order to act or abide.  Commerce is communication the–the communication of ideas and information.

Is it possible to have real capitalism running parallel to tech, of course. We would probably see more intervention, more creativity. There will always be room for improvement.

For now it is the scourge. The dangerous meme. The great money grab. The robbing of the people’s bank. The taking of souls and the spirit of a nation.

No wonder there is such pervasive confusion between true capitalism and democracy, or oligarchy and kleptocracy.


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The symbol for silver ‘AG’ comes from the Latin word ‘agentum’ meaning silver.