The Price of Wilful Ignorance

The world is a complex place. We can't know everything about it, so it makes sense to trust experts with some decisions. However, to trust experts on all decisions is a recipe for disaster. When it comes to the big decisions in life, we have to do our own research.

This will become all the more evident in the years to come, because a new era has started, with some major trend reversals. What worked in the past is therefore unlikely to do well in the future.

Much expert advice is based solely on the assumption that what worked in the past will work equally well in the future. This kind of advice has to be treated with extreme prejudice.

Also, most experts are not in fact experts on anything. They are merely repeating what they've learned from someone else. They are saying dumbed down versions of what other people have said. Rarely do these people go out and look for evidence themselves. They are lazy egocentric blowhards with no original thoughts on the subjects they pretend to understand.

To trust experts, without thinking things through and without checking for evidence, is a form of wilful ignorance, and the price to pay for this will be much greater than many can imagine.

There is for instance a widely accepted belief in credit as an engine for growth and wealth accumulation. I know many intelligent and well paid individuals who fully embrace this idea, and they are likely to suffer immensely from it over the years to come.

The reason for their trust in credit is based on the fact that credit has in fact been an engine for wealth accumulation ever since the introduction of central banking back in 1913 and thereabouts. But that was the start of the progressive era, and we are no longer in it. The new era we're entering will put such a high price on credit that the burden of it will outstrip its purported benefits, and this will come like a hammer blow at the very start, only to linger for decades into the future.

Once interest rates go above the rate of return on investments, credit becomes a burden, and we will see interest rates go much higher than most people's return on their investments. Those who are leveraged up with debt in their investments will see negative returns. But this will do little to dent people's belief in credit, and many will leverage up even more in response to their initial losses. The result of this will in turn be complete ruin and a loss of all savings.

This is how things always play out during reversals of mega-trends. So much so that there are passages about it in the Bible. The four horsemen of the apocalypse represent the four stages of a mega cycle, and the end of it is always death to those who don't correct their ways.

The ultimate price of wilful ignorance is not only financial ruin, represented by the third horseman, but death as represented by the fourth one, and it is this fourth horseman that is now appearing on the horizon.

The trick to riding a mega cycle is to correctly identify the trough and peak of it, and to act boldly on evidence rather than advice. It's rarely the evidence that is the hard part in this. What's hard is to act contrary to what has worked for decades in the past, but it has to be done in order to avoid ruin, and to ensure future success.

To ignore the warning signs that are everywhere around us, and to refuse to think things through, can be tempting, but the price of it will in many cases be economic ruin, and in some cases death. Sloth is a deadly sin for a reason. To remain in a position of danger when the world is turning against it is a great moral failing, and a lot of people are going to find this out the hard way over the years to come.

On the upside, great opportunities are ahead of us. Those who get onto the new wave can look forward to decades of smooth sailing before it's once again time to get out of dodge.

Catching a big wave

By Bengt Nyman from Vaxholm, Sweden - IMG_8762, CC BY 2.0, Link