Redundancies

The way the Wuhan coronavirus spreads makes it unlikely that anyone can completely hide from it. However, there are ways to keep ourselves from being hit too hard by the economic effects of the virus. Some simple precautions will help us dodge the worst of the outbreak, and keep us from getting hit too badly with any supply chain disruptions that may occur.

Stocking up on tinned and dry foods enable us to stay at home as much as possible. Making sure our car is topped off with petrol keeps us from suddenly having an empty tank, just as we need to get out of town. Ample savings enable us to keep away from work, and rent a place in the country.

Having a little extra of everything makes us flexible. We can make snap decisions. We can go on a prolonged absence. We can move and operate freely. If there is a sudden shut down of grocery stores or petrol stations, we're still able to keep things together, and get to wherever we need to be in order to protect ourselves.

By McKarri, CC BY-SA 3.0, Link

Reevaluations

From all the evidence so far, it looks like the Wuhan coronavirus will be as bad as the Spanish flu, if not worse. However, the markets seem in denial, with evaluations near all time highs. The sentiment still seems to be that of euphoria and a belief in continued growth. But this sentiment is unlikely to last for much longer. Tourism and transportation is already hit by sharp falls in demand. Supply lines are disrupted. Factories are shutting down, not necessarily due to any local illness, but due to disruptions caused by dependencies on Chinese made components.

A large number of companies will see their earnings severely hit this year. The stock market is in for a rude awakening. People will want to get out of companies teetering at the edge of bankruptcy, no matter how much artificial stimulus is pushed into the market by the FED. Added liquidity will find its way into gold soon enough.

However, a much more important awakening may come with the spread of the Wuhan virus. People will start asking themselves more fundamental questions. Once widely held assumptions regarding life are challenged with the prospect of imminent death, things may change in a fundamental way. We may in retrospect see the year 2020 as a watershed in history, much like we view the first world war today. While 1913 can be seen as the year the progressive era started in earnest, with the establishment of the FED, we may see 2020 as its end. This may be the year pension funds get completely wiped out. This may be the year the welfare state fails to provide the sort of immediate as well as long term safety that it has been advertised to provide. This may be the year central banking blows up. This may be the year trust in politicians evaporates completely. Anyone dependent on the system for their needs are likely to be disappointed. Hyperinflation will decimate savings and government handouts, and people will start asking themselves why they bother to go to work.

I have a brother who goes to the office every day, despite being more wealthy than me. Yet, I'm doing just fine, living off of my savings. If my brother catches the Wuhan virus as a consequence of him going to work, he'll no doubt realize that the price of going to work may be far higher than what it's worth. He may want to do what I've already done. He'll cut his ties with the system and live a more self reliant life, with no debt, lots of spare time, and no worries.

I suspect that the number of people in my brother's situation is rather large. They are the hard working back bone of the current economic system, and they are brutally exploited for their sin of having overlooked the obvious. Why on earth are they doing so much work when they are rewarded with so little?

By Pieter Bruegel the Elder - bAGKOdJfvfAhYQ at Google Cultural Institute, zoom level maximum, Public Domain, Link

When Price Discovery Dies

The FED has now made it quite clear that it will not allow the stock market to fall, which means that price discovery has been disabled. Anyone with access to cheap credit can make money by borrowing as much as possible to buy stocks. On the other hand, those who sell stocks for cash will see their wealth fall, relative to those who stay in the stock market.

However, the FED cannot control the price of gold in the same way it can control the price of shares. Relative to gold, shares may go up or down. Price discovery relative to gold remains in place. It is only the US dollar that has been disabled, not the market as a whole. With price discovery relative to the dollar now effectively disabled, gold will have to function as the unit of account.

The implication of this is that anyone with savings in dollars should buy gold. With cash essentially dead as far as price discovery is concerned, only gold will correctly reflect prices.

By Unknown - Oslo Mynthandel, Public Domain, Link

Bad Strategy

The Chinese communist party is creating all sorts of trouble in their efforts to contain the Wuhan coronavirus. Having first made the mistake of suppressing the free flow of information regarding the initial outbreak, it has now made the mistake of initiating forced quarantines. As a consequence, the disease is now spreading like wildfire among police officers charged with the rounding up of sick people. The police and armed forces are now likely to be the most infected group of people in China.

This is reminiscent of the spread of the Black Death through Norway in the late medieval period. While horrible to all people, it was particularly bad for the ruling class and their minions. There were no survivors. The entire ruling class was wiped out.

If the Chinese communist party continue their mistakes, they may well find themselves in a similar situation. The police and the army will be decimated, and the close proximity between this part of the state and the ruling class itself makes it likely that we will soon see Chinese top politicians drop dead. If so, this might be the dawn of a completely new political arrangement in China.

By AWG97 - Own work, CC BY-SA 4.0, Link

Places to Avoid

A small group of Brits were caught ill in a French skiing resort a few days back, and the largest number of Wuhan coronavirus infected people outside China are on a cruise ship docked at port in Japan. This comes as no surprise, because airplanes, airports and cruise ships are ideal for spreading the virus. They are crammed spaces with a lot of people shuffling back and forth.

Other places such as schools and supermarkets see the same people every day. They are therefore safe as long as the virus has yet to arrive in town. However, once the virus reaches Porto, I'll keep my boy home from school, and we'll keep our errands to a minimum. Hopefully, that'll be sufficient for us to avoid catching the flu.

By Portal da Copa/ME (victoria.camara) - Portal da copa, CC BY 3.0 br, Link

Culture, Micro-Culture and Personality

I live in a country that's quite different from where I grew up, yet it's not that easy to pinpoint any great difference in culture. Apart from the difference in language, there's not much that stands out. It's all very subtle. People greet each other a little more than where I grew up. People talk a little more. People sit down for a coffee a little more often. The food is different.

There are all sorts of subtle differences, many of which can be explained by the fact that the weather is better where I now live. Going out to enjoy a stroll down to the local pastry shop is therefore more natural. The food is different for a similar reason. It boils down to what's available locally.

History plays a part as well. I live in a Catholic country with a feudal past, while I grew up in a protestant country with very little feudalism in its history. This makes a difference when it comes to politics. But here too, the differences are subtle.

Yet, culture is no doubt very important. Countries end up taking divergent paths, so much so that some end up wealthy while others never manage to rise. There are also moments of glory, and decay. This can affect entire countries or cities. There are town that have a different culture than their surrounding areas. People talk more and longer in Bergen than in the rest of Norway. Bergen is an old Hansa town. It's full of descendants from Germany and Holland.

But even inside a town, there are different cultures. There is the working class mentality, and the upper class mentality. Workers tend to make bets in the hope that they may get rich. The rich are more concerned about staying rich. They make long term investments. They don't gamble as much as the working class.

The rich can again be divided into clans and families, all with their own particular micro-culture. This is in turn tied up to the industry that the family or clan dominates. The publishing industry operates in a different way than manufacturing. Breweries are run different from transportation companies.

In all cases, the culture is remarkably stable. The so called old money wealthy can trace their wealth and ancestry back for centuries. My personal wealth can be traced back 500 years. Every single individual in that long chain could have made a terminal mistake. Yet it never happened. When mistakes were made, they were fixed. Everyone managed to scramble back to where they started. Every individual in the chain had both the personality and the culture to move on.

Culture is a strange mix of personality and circumstances. When looking around for alternative places to live, it's a good idea to read up on the history of different places. I ended up in Portugal through a strange series of events. However, it was not without a feeling that the Portuguese culture was right for me. That it had the right balance so that I could more fully be myself.

By jpvargas - Boardwalk, CC BY-SA 2.0, Link

Recovery Rates

Official numbers coming out of China are probably doctored. We cannot trust their absolute values. However, relative ratios may be pretty close to the truth. This is because the easiest way to doctor numbers is by applying a simple weighing factor to all numbers. The numbers become skewed in one direction or the other, but their relative sizes remain fixed.

From this, it's interesting to note that about 2100 individuals have recovered from the Wuhan coronavirus, while about 700 have died. For every one that have died, three have recovered. This in itself would set the mortality rate at 25%. However, we must again keep in mind the time axis. People die at the height of their illness, while they recover past this point. The mortality rate is therefore a good deal lower than 25%. A likely figure is closer to our original estimate of about 10%.

Again, we get confirmation of our original estimates through simple analysis.

By Mc681 - Own work, CC BY-SA 4.0, Link

Peak Hubris

Central bankers are now routinely saving the loan markets through direct liquidity injections. They also seem to think that they saved us from the economic consequences of the Wuhan virus through this same mechanism, and going forward, they plan to change the weather through their monetary policies. There seems to be no end to what these people believe they can do. They have reached omnipotence. All and any problem met by mankind in the future will be solved through monetary intervention.

By U.S. Government - Extracted from PDF version of the Federal Reserve's Purposes & Functions document (direct PDF URL [1])., Public Domain, Link

REPO Madness

We're seeing massive injections of liquidity into the markets today. As a result, speculative stocks such as Tesla have shot up, while safe havens such as gold have tanked. This may seem to contradict the idea that extra liquidity always finds its way to gold. However, liquidity injections are directed and orchestrated. The intended targets are hit with precision. The immediate effect of liquidity injections are therefore always a rise in speculative assets, at the expense of safe havens. But once the money is in circulation, it will find its way into what makes sense. With money printing in overdrive and the economy in free fall due to mismanagement and virus outbreaks, the only sensible investment is gold. The current knock down in the gold price is therefore temporary. We will soon see gold prices move up again.

By Vauxford - Own work, CC BY-SA 4.0, Link

When the Conditioning is Complete

We live in the most well regulated society in the history of mankind. We are conditioned from a very early age into believing that we are free and prosperous, and that the state is the source of this freedom and prosperity.

While this is all well and proper to most people, believing as they do that this is in fact how things are, some find this enthusiasm for the present state of affairs stifling. The constant enthusiasm for political solutions, continuously touted by the media, and repeated ad nauseam by peers, colleagues and family, can really get on one's nerves. Especially for those of us who are of the freedom minded kind.

The realization that almost everyone is in favor of the Status Quo, is at first daunting and depressing. However, on closer inspection it becomes clear that this fact is something that can be taken advantage of. The heartfelt belief that we are all lucky to be inside the system generates an equal sense of pity for those who are on the outside. I'm sure most of my family members feel genuine pity for me, living in self imposed exile outside the warm embrace of the state. Confident in the soundness of their own belief and love of the state, they feel sorry for me. Some may think that I will regain my sanity at some point. Others may think that I'm forever lost in my delusions. However, none of them want anything but good for me. They are not envious. They don't see me as a parasite. They see me as lost in the wilderness.

This view of the world is so completely and utterly absorbed by most of our fellow men that even tax collectors are likely to feel a certain sting of pity for those who leave their "obligations" behind. They see my lot as evidence of a tragedy of some kind. I have either lost my mind or my possessions. Either way, there's no point in pursuing me. I'm a lost cause, better left to himself to figure things out on his own.

Meanwhile, I'm living better and freer than I have ever done. I'm living my philosophy to the full (PDF), and I'm reaping rewards, both material and spiritual. All thanks to the fact that most people cannot imagine living a life in freedom, and truly pity me for where I am and what I'm doing.

By Rembrandt - The Frick Collection, Public Domain, Link

Words and Action

Karma has a tendency to strike when least expected. Usually at some peak in confidence. As the saying goes: pride goes before the fall.

This looks to be the case for hundreds of bewildered CPS workers in Norway. Just days ago, they stated confidently that their rules were internal and not subject to neither international conventions nor Norwegian law. The fact that the CPS had lost a stunning number of cases in international arbitration without any consequences at home seemed to support their statement. Norwegian politicians and mainstream media were either silent on the matter, or supportive of the CPS. The clear violations of human rights were going unpunished, and without any consequences whatsoever.

However, just a few days after the CPS made their hubris clear and evident for all to see, the ministry of finance decided to cut back on their funding. While still vocally supportive of the CPS, fed up politicians have decided to cut where it hurts. Hundreds of CPS workers have to go.

A similar story goes for the arts world, where people have been paid by the state for performances revolving around feces and pooping on stage. Politicians have verbally defended the need for a wide interpretation of art. Experts have come to the defense of the artists. But funding has been cut.

The foreign aid fiasco involving the Clinton Foundation, Epstein, and offshore companies owned by corrupt Norwegian politicians seems also to have touched a nerve, even if the words coming out of the foreign affairs department trivialize what happened as merely a few bad apples. Here too, there are cuts.

This illustrates perfectly that words do not necessarily match action. Certainly not when it comes to politics. Incumbent politicians will always defend the system as it is. Especially if the system is of their own making. However, once the winds shift, they will immediately start to dismantle what's out of favor. The politicians will continue to defend the system even as they dismantle it completely. It's not their words that matter. It's their actions, and those actions are most certainly guided by public opinion. What's happening right now with the CPS in Norway is in this respect both illustrative and reasons to be hopeful. Activism works.

By Gustave Doré - https://ebooks.adelaide.edu.au/m/milton/john/paradise/complete.html, Public Domain, Link

When to Duck and Cover

The Wuhan coronavirus has reached Iberia, with one case confirmed in Spain. From looking at how this virus has spread in China, we may assume that this case in Spain puts the total of cases in all of Iberia at about 10. The rate of spread is at about a tenfold every week, so we can expect 10 confirmed cases in a week from now, with a total of about 100 cases.

This means that it is still way too early to take extra precautions. We're more likely to be hit by a bus over the coming week than being infected by the virus. However, that analysis may change. If we get a case in Porto, we should take note. Especially if that case is in the area we live. We don't want to take any unnecessary chances with this virus. Once there's a few confirmed cases in Porto, we should keep the kids home, and reduce our errands to a minimum.

By Lacobrigo - Own work, CC BY-SA 4.0, Link

Karma

I'm all for private justice. However, I'm not so stupid as to commit crimes myself while handing out justice. Because there's this thing called karma. Things have a tendency to come back at us. That's why we have sayings such as "what goes around comes around", and "don't throw stones when in a glass house". Behaving as if  karma is selective and always in our own interest rarely ends well.

By John F. Knott - Knott, John F. (1918) War Cartoons, Dallas, Public Domain, Link

The Dawn of the post-Progressive Era

The progressive era is in its death throws. There is debt everywhere. Political hubris is astonishing. The evils of the system is plain to see. Anyone putting their trust in this system is either naive or willfully ignorant. The system will not take care of us in our old age. It will not protect us.

We're at peak centralization, and what's ahead of us is an unwind of centralized power that will take decades to complete. The UK leaving the EU is only the first step on this path. As people increasingly realize the scale of the mess produced by the central political elite, there will be more calls for decentralization. Not only will more countries leave the EU. The US will fall apart too.

The truth is that Washington has produced nothing but debt, war and misery for the masses. When pensions fail to materialize, and everything stops working. This will be plain for everyone to see. Everyone will want power to be limited and local.

If the Wuhan coronavirus turns out to be a product made in a government lab, Chinese people may also start questioning the wisdom of centralized power. They too will want an end to the dead weight and immense moral hazard that comes with centralized government.

Even people in small countries like Norway are starting to realize the hazards of centralized power. Money, taken from the public purse, has been handed over to the Clintons who in turn white washed the money through Epstein and a Norwegian affiliate. Money is wasted on all sorts of idiotic projects, if not spent on war and other nasty activities.

With decentralization, we'll get a return to sound money and free trade, unregulated by corrupt busybodies. This will mean a shift in resources from financial asset bubbles to real money, real production and real value. The early movers in this direction will benefit the most from this shift. A first step, virtually guaranteed to give a great return, is to move away from government cash and debt. Only those holding a substantial part of their savings in gold are guaranteed to prosper through the transition from centralized to decentralized society.

By Samuli Lintula - Own work, CC BY 2.5, Link