The Problem With Idiots

I was still a kid in kindergarten when I realized that the world can be divided into two types of individuals.

1. Those who are honest about what they know
2. Those that pretend to know more than they do

I was of the first category, and my twin brother was of the other kind. He would talk with confidence about all sorts of things that he had no clue about, and I was amazed to see how many people fell for it. My twin brother was the smart one with simple answers to most things. I was the more complex one with all sorts of uncertainties.

Seeing that my twin brother had more success than I in things involving other people, I adopted some of his style in college, and continued with this into my career as a programmer. However, programming is not very open to nonsense. You either know what you're doing or you don't, so I tired of the constant need to impress as I entered my mid-life career. Then, as I saw all sorts of low life individuals suck up to colleagues and management at my expense, I quit, and I've been retired ever since.

Of the two types mentioned above, the pretenders are by far in majority, and this explains a tendency towards idiotic policies both in government and corporations. The only thing holding them back is reality, but this can be suspended for a long time. Cheap money and/or windfall incomes can keep idiots in power for decades on end. Portugal became an increasingly weird place to live during its golden era of imported riches form its colonies. Norway is currently run by a bunch of idiots, empowered to do all sorts of stupid things due to easy riches from oil. The US is in the midst of a complete Weimar meltdown due to its status as issuer of the world reserve currency.

Our history books are full of examples of this, and it always ends in one of two ways. Either, people come to their senses relatively early, as the US did immediately after the second world war, or lunacy plays out to its logical conclusion, as happened in the Soviet Union. Once a certain threshold has been passed, there's simply no way to avoid a complete moral and economic crash. The moral and economic decay spirals into lunacy, one driving the other lower. The more crazy things get, the more appeal there's in the type of simple solutions presented by pretenders, and the more things get out of hand as a consequence. There's no coincidence that moral and economic decay go hand in hand and that they crash together when reality catches up with delusion.

As of this year, I think it's clear that western society has passed the threshold of no return. Only a complete moral and economic collapse will wake people up from their collective delusions.

The idiotic response to the plague leaves no doubt as to how far gone we are as a society. There's hardly any opposition to the things currently being enforced, and there doesn't seem to be any limit to what people will accept, even embrace. People line up for untested vaccines, they love lockdowns and mask wearing rules, and vaccine passports for travel is greeted with enthusiasm. The idea that we must one day flash our vaccine papers to get into supermarkets is being discussed in earnest.

In all of this, there's no lack of logical thinking, so there's no point in trying to argue our way out of this mess. As an example, we can take the fact that the seasonal flu has all but disappeared completely this winter. This is to me proof positive that the plague is nothing but a flu. There's no way to distinguish one from the other. However, idiots tell us with confidence that the absence of the seasonal flu is due to the exceptional effectiveness of lockdowns and masks. It's proof that they are right and that everybody else are wrong.

Confirmation bias comes to the rescue, logic is applied, and the desired conclusion is reached. There simply isn't any way to fix stupid. Once the idiots are in charge, there's no way back. The only option left is for us to step out of their way and make sure that we're neither run over nor drawn into their lunacy as they run themselves into the ground. But this can be extremely difficult to do.

My twin brother makes a living off of giving advice. His habit of pretending to know more than he actually does has brought him far. But he's no idiot. He admits in private that he doesn't know half as much as he pretends to know. He can also see madness for what it is. But what is he to do? He can't very well voice his scepticism. In fact, he has to make an effort to believe in the nonsense presented to him. Otherwise, he would suffer greatly from moral objections to what he dishes out as sound advice. This explains why my otherwise level-headed brother is holding on to some rather naïve ideas related to the plague. He will no doubt line up to get the untested vaccine as well.

Of my two other brothers, my older one who has been retired for two decades is as sceptical as I am to both the moral and economic health of the current system, while my younger architect brother is as fearful as my nephew. My younger brother refuses to visit my parents out of fear of killing them with his mere presence. My older brother visits them regularly with no concern, and the only reason he keeps a polite distance from them is that they too have fallen for the hype.

People like my older brother and I are sceptical to what's going on, at least partially because we're not part of society's corporate structure. We don't have to parrot whatever is being told to us just to stay employed. We don't internalize their narrative. We read it with no special reverence. When things don't add up, we don't seek confirmation, we note it down as dubious at best, possibly even sinister with evil intents.

Something similar is going on in financial markets where otherwise level headed fund managers are starting to consider Bitcoin as an investment. The constant droning on about the superiority of Bitcoin to pretty much all other assets has finally worn them down. Also, there's the constant nagging of impatient clients as to why they aren't putting at least some money on this lottery ticket. Hopefully for them, they won't commit too much money to this sure failure.

What's becoming increasingly clear is that those operating inside the corporate structure of society cannot completely escape the insanity as it unfolds. There's simply too many idiots demanding that level headed analysis is put aside. Furthermore, rules are put in place to force the sceptical to accept what they don't want. Nurses are lined up and vaccinated. Never mind that some die as a consequence. To refuse would be tantamount to a resignation. Faced with the uncertainty of an untested vaccine or the certainty of economic hardships, most people choose the vaccine.

Left unchecked, this will only get worse. There will be vaccine passports required for travel, first internationally and then locally. This will then be required for entering stores in order to buy food.

There's very little we can do to stop this because idiots outnumber the rest of us by about eight to one. The evidence for this is everywhere to be seen her in Porto where just about everyone wears their mask with religious zeal. Apart from low level resistance, there's little we can do. 

This insanity cannot be stopped by popular resistance. The best we can do is to learn ways to go around the system as much as possible. We must resist the temptation to be drawn into it in the vain hope of a quick profit. Beyond this, we can only pray and hope that the economic crash for which we are headed will come sooner rather than later so that we can finally be free from these tribulations.

Mask of the beast

Sellers and Buyers

This article about the latest pullback in the price of Bitcoin makes it sound like Bitcoin is some kind of epic battle ground where superhuman forces slog it out for dominance. There are institutional buyers, super-rich whales, and Bitcoin miners. Everybody but the miners are buyers. Reading between the lines, we're supposed to conclude that institutions and whales are bigger and stronger than miners, and that the battle will be won by the buyers, sending the price of Bitcoin to new highs. However, the article reveals a truth that I pointed out back in 2017. Bitcoin requires energy for its mere existence. Miners aren't selling Bitcoin for no good reasons. They are sellers because they have to pay the bills.

The fatal flaw of Bitcoin is its dependence on energy. But the cost of this isn't carried equally within the Bitcoin community. The miners are stuck with bills while Bitcoin investors can hold Bitcoin virtually free of charge. It's no surprise then that it's the miners that are driving the price down. Energy is getting more expensive. They have to sell for millions of dollars every month just to stay in business.

One might argue that this need to sell Bitcoin is no different from gold miners needing to sell gold in order to stay in business. But this is a false equivalence. Bitcoin miners double as transaction enablers. Without Bitcoin miners, the network goes down and Bitcoin becomes worthless. This is not the case with gold. If gold miners go belly up, gold will not only remain valuable, it's likely to go up in price.

Bitcoin is completely dependent on its network, and this must be paid for by people who have two options only. They can sell Bitcoin or they can hike transaction costs. But transaction costs would have to go up a lot in order to pay the bills, so much so that it would crush the attractiveness of Bitcoin as an investment. Furthermore, jacking up transaction costs by a meaningful amount might stop so many people from transacting in Bitcoin that the miners end up no better off.

For Bitcoin to remain up and running, miners have to sell Bitcoin. Miners constitute in this way a permanent pool of sellers. However, Bitcoin is not used for anything outside of speculation. There's no industry that require it for its operations. Bitcoin has a permanent pool of sellers, with no corresponding pool of buyers. Bitcoin can go bid-less, in which case its price goes to zero.

This is in stark contrast to gold which has a permanent pool of buyers in industries ranging from jewellery to high tech medical equipment and computers. But there's no guaranteed pool of sellers. If gold miners go belly up, there will be no guaranteed supply. Gold has a permanent pool of buyers, with no guaranteed pool of sellers. Gold can go offer-less, in which case its price goes to infinity.

Cryptocurrency mining farm

By Marco Krohn - Own work, CC BY-SA 4.0, Link

Real or Imagined, it's Here to Stay

My great grandfather Harald died at a relatively young age of what started out as nothing but a sniffle and a cough. He was fit and strong. He never caught a cold. He had no medical condition that could explain it, yet he died. I remember my grandmother talking about it regularly. It was such a mystery. But that's how life is. Suddenly and unexpectedly something happens and somebody dies, very much to everybody's surprise.

These things are rare, but they happen, and until recently nobody made a big deal out of them. However, talking to my twin brother on the phone the other day, he could tell me that the current plague is very dangerous indeed because he himself knows a guy who died from it. This guy was not even sixty years old, had no medical condition, and was in good shape, yet he died. To my astonishment, my brother took this as proof confirming the hype.

My wife's aunt Augusta is sometimes mentioned in a similar manner by her family here in Portugal. The fact that she was morbidly obese and would have died of pretty much any severe cold doesn't matter. She died from the plague. That's the verdict, and hence, the plague is super dangerous.

We're not all coming to this conclusion, but a surprisingly large number of people are reacting to incidents like these as if they are more meaningful than the statistics that show the plague to be nothing more than a severe cold. Opinion on this matter is clearly driven more by emotion than intellect. Even intelligent people are falling for the propaganda. As a result, rationally inclined people are driven out of all discourse. Emotionally driven idiots are taking over, and it looks to me like this state of affairs is likely to remain for a long time to come.

Only when the consequences of all this nonsense is clear for all to see, and felt intensely by a clear majority of the population, is there any chance of a radical change back to how things used to be a year ago. The reason for this being the great comforts that can be had from the imagined struggle against the plague. The collective fight against this imagined danger has a religious fever to it. There's passion and suffering, all imagined, and all greatly enjoyed by those engaging wholeheartedly in it. The plague is the ultimate excuse for failure and suffering. It gives rationale to what is otherwise difficult to explain. As an example of this, I can mention my wife's nephew who's positively revelling in his own misery.

Life has not been kind to my nephew. His mother died from cancer a few months back, he lost his job, and his girlfriend left him. I don't know much about him as a person, but I think he's a bit of a loner. He's a little too shy for his own good. The situation is complex and not very pretty. The plague is therefore convenient in that it settles things without much need for analysis. Just about everything can be blamed on the plague. His life isn't a mess because of subtle and complex mechanisms within his psyche, it's a mess due to this overwhelming external force that threatens to crush us all. But the problem with this kind of thinking is that it very much requires us to believe our own delusions. As a consequence, our nephew has become completely paranoid and obsessed. He refuses to take off his mask, even in private.

My wife and I have invited our nephew over for an informal talk about the state of the world and how we plan to navigate through the current storm, and this is how I first became aware of his obsession. In his messages, he's clearly drawn to the idea of a frank talk, but he frets about it too. In his mind, he's concerned about our health. He doesn't want to infect us. But in reality, I'm sure it's his own delusion that he's afraid to loose. He knows in the back of his mind that he can only get out of his difficult situation by confronting the complexities of his life in an open and frank manner, and he's very much reluctant to do so.

In my latest message to him, I told him quite honestly that I don't think the plague is going away anytime soon. It's here to stay, and therefore something to accept and live with, just like any other inconvenience and danger in life. Predictably, our nephew has not responded to this latest bit of frankness from his uncle, because it exposes the lie that he lives. Truth is that if the plague is here to stay, we might as well get on with our lives. He has no excuse for his paranoid hunkering down. Only if the plague can somehow be mitigated by the lockdown and mask wearing does it make any sense to stay inactive at home. Yet the news, that I'm sure he follows closely, indicate that we're likely to see this plague come and go for decades to come. Is he really going to wear a mask for the rest of his life?

While I hope otherwise, I suspect our nephew will remain in hiding as long as it's possible for him to somehow glean a living from welfare programs of various kinds. Only a complete meltdown of the economy will lure him out in daylight in search of work, and he is far from the only one thinking like this. From what I can gather, a clear majority of the population has fully embraced the new religion of lockdowns, mask wearing and social control.

The mask of the beast

Subversive Gifts

I was invited into a local gift-economy group on Facebook the other day. It was suggested to me by a neighbour up the road, and I figured I might as well join. Checking out their about page, it was clear that this group is a strict gift giving group. No barter and no credit is allowed. Gifts have to be given without any expectation of any return favour, which limits its economic value to only that which can be given away without pain.

I can't think of an awful lot of stuff that can be given away in this way, but there are a few things that fit this bill. There's good quality stuff that can no longer be used by, such as children's clothes, miss-purchases, and tools or kitchenware that is no longer in use. Also, any kind of stuff that serves as personal promotion, be it product samples, gimmicks or books. Finally, there's surplus food that must either be given away or thrown away.

Of all these things, the only items worth giving away to strangers were in my case two paper copies of a book I helped author. This fits into the personal promotion category. My work on gravity is mentioned in the book together with some of my views on astronomy and geology. The two copies I received from Andrew Johnson were from the start meant to be given away. However, the book is such a deviation from orthodox thinking related to Earth and gravity that I could not think of anyone to give it to. The paper copies ended up in my bookshelf where they have been collecting dust for more than a year. But that has now changed.

The response to my offer to give away two copies of this particular book was immediate, and two individuals are soon coming over, each to get their own copy. Part of the reason for the quick response may be the fact that this book has done rather well. It has good reviews. As a fringe science book, it's quite a hit, and I think I know why.

Fringe views are often associated with politics. This is especially true for Andrew Johnson who has unorthodox views on everything from 9/11 to the climate. This means that his books are only read by those who already believe in his conclusions. Very few people read this kind of books for the sheer enjoyment of the alternative view. However, in the case of gravity and geology there's no obvious political message attached. People can read the book for themselves, follow Johnson's logic and check the evidence for themselves, without ever having to deal with a voice in the back of their minds that either agrees or disagrees purely on principle. But paradoxically, this very fact makes the book all the more subversive.

Andrew Johnson is very thorough, has a great story telling voice and a logical mind. He's nothing like the stereotypic conspiracy theorist presented in the media. Furthermore, the evidence in support of a hollow and expanding Earth are numerous and compelling. The reader cannot avoid thinking that there might be some truth to this alternative view, and if this is the case for gravity and geology, why not other things as well?

The book is an eye-opener. It reveals the fact that much that we are taught as facts are mere opinions, some of which are demonstrably false. We know that gravity cannot pull matter together to form stars and planets. We know that dinosaurs couldn't roam the Earth under today's gravity, and we know that continents are much older than sea-beds. The list of facts that are under-communicated and contrary to dogma is surprisingly long. Once this is realized by readers, other more controversial views may also find a hearing, and therein lies the subversive power of this book.

Tin foil hat

By Rory112233 - Own work, CC BY-SA 4.0, Link

The Great Reset

The great reset is an idea much touted by the media and their political and economic backers. However, it's also shrouded in a lot of nonsense. It's not immediately clear what's at stake. A bit of clear thinking is required to sort the facts from the hype.

To get a meaningful insight into what's going on, we must remember that the elites in government and corporations view the general population as cattle to be controlled. They also think very highly of themselves. They believe that their view of the world is superior to that of their subjects. When they say things like "you'll own nothing and you'll be happy", they believe this to be so. Furthermore, they believe it to be inevitable. Not only is their vision something to be applauded, it's also destiny. In their delusional view of things, only evil operates outside their control. They are the benevolent gods that will set humanity free under their watchful eye.

This delusion makes them blind to the fact that they cannot possibly know anything close to what they think they know. They are also profoundly incapable of seeing things from more than one perspective. They confuse self interest for benevolence. They find it extremely hard to comprehend the fact that what's in their personal interests are not necessarily in the best interest of everyone else, especially when they are constantly surrounded by people who live under this same delusion, as is the case at the very highest level of this hierarchy.

I know this to be true because I've been at times on the inside of this sort of circle. Everyone feels both important and benevolent while it should be quite obvious that the only thing everyone in the room cares about is the money to be had from their political meddling. They hold self congratulating speeches. They remind everyone of their importance and benevolence. Everybody strokes everybody else's backs and everyone goes home happy and convinced that the money they just made is due to benevolence rather than grift.

The great reset is a plan to have the entire world controlled by this kind of unelected individuals, and James Rickards makes an excellent job of laying the plan out in this article. However, apart from advocating owning gold and silver, he doesn't make any suggestions as to what should be done to avoid it, so I'll add a few ideas of my own.

First off, we mustn't forget that moves towards centralized governance is hardy a new thing, and it has never worked. The tower of Babel is the archetypical example of this, and history have plenty of examples. Every time the elite push for centralization, things fall apart. Their projects never complete, and there are good reasons as to why this is so. The foremost of these is the fact that the elite is delusional. They don't know half as much as they think they do. They may be good at power games, but they don't know how to run a factory or a farm.

As an example, we can imagine a world where the elite has managed to capture control of all manufacturing and all farming. However, none of these people are farmers or factory foremen, and even if they were, they wouldn't be able to keep an eye on all their factories and farmland. For this, they must rely on agents, and herein lies the paradox in their thinking. They fail to recognize the distinction between formal ownership and control.

Bill Gates is currently the biggest land owner in the US, but he's no farmer. His farms are managed by agents, and these agents will tend to put their own interests above those of Gates. The more remote the farm is from Gates' watchful eye, the more likely it is that things are done more to the liking of the agent than to the benefit of Gates. It's the agents that control the farms. Gates is merely the formal owner.

Bill Gates' only means of control over his farms is through audits, also done by agents. But the auditors, like the farmers, work primarily for themselves. They are not as reliable as direct ownership would be. Furthermore, they don't know every little thing going on at the farm. They audit the books, but if the farmer is doing business on the side, there's no way of telling that from the books alone. The farms are effectively in the hands of agents, operating primarily in their own interest.

The agents arrange things in such a way that they benefit themselves, as well as family and friends. This, rather than centralized control, becomes the default configuration of a fully centralized society. A myriad of small family-centred enterprises spring up, first at the fringes, and subsequently in the heart of the system as it crumbles under its impossible design.

Living relatively remotely from global centres of commerce and politics is therefore an additional step that we can take in preparation for the coming collapse. A small town with an independent minded citizenry is ideal. The more accustomed people are to doing business outside of the system, the better.

I live in Porto which has this kind of culture. Short supply lines from surrounding farmland and factories makes it relatively easy to strike off book deals. In the event of a future ban on cash, gold and silver coins will no doubt be accepted. It's not for nothing that James Rickards urges us to own some physical gold and silver.

Tower of Babel

By Pieter Bruegel the Elder - Levels adjusted from File:Pieter_Bruegel_the_Elder_-_The_Tower_of_Babel_(Vienna)_-_Google_Art_Project.jpg, originally from Google Art Project., Public Domain, Link

A Perfect Cup of Tea

Every now and again, I find myself obsessing about things to the point of making myself nervous or depressed. One of my vices in this respect is the price action in Bitcoin, the stock market and gold. I follow these things closely for no good reasons at all, and it ends up affecting my mood. I hate seeing things move against me, even if only temporarily, and I take too much pleasure in seeing things move to my advantage.

Part of my problem may be my early retirement. I got a lot of time on my hands, and it's tempting to spend it online. However, I obsessed about things even before I retired. My obsessions are not entirely a function of available time. It's more a matter of mind-set. In either event, it's a terrible waste of time to roam the web. There really isn't anything worth spending hours upon hours doing online, and that's why I make an effort to reduce my online time.

In my effort to improve my daily routines, I've identified things that make me nervous, and other things that calm me down. The point is not to cut out internet all together, but to use it more mindfully. Social media is like poison, so I've stopped reading other people's posts. I've also stopped posting things on Facebook. Obsessing about price action is similarly destructive. There's no point to it. No insight of any value is gained. However, writing a blog post or two, checking for messages and going through news headlines makes sense. A few games of solitaire to idle away spare time is also quite calming. Beyond that, I'm making a point of doing things around the house. Jokingly, I tell my wife that doing the ironing and vacuum cleaning the apartment gives me purpose.

Other things worth doing is home schooling for our boy, and tending the plants and micro-composts on our balcony. Then there's the exploration of simple pleasures like making a perfect cup of tea.

My wife and I have of late started buying loose tea, high end coffees and fine wines. None of this is over the top expensive. We're merely exploring original flavours that haven't been tampered with too much, and in doing this we're becoming increasingly aware of how messed up many of our favourite foods have become. Tea in particular has been reduced to something barely drinkable.

It's been a long and steady decline when it comes to tea, so much so that it's gone pretty much unnoticed. But once we started buying loose tea, there was no way back to the paper wrapped dust sold as tea in supermarkets. We now brew our tea the old way. Two topped teaspoons of tealeaves go into our tea infuser. This goes into our tea pot. One litre of boiling hot water is poured over it. This is left to brew for about five minutes. The tea infuser is then pulled out to prevent the tea from turning bitter and overly strong. What we have is then a truly refreshing drink, strong without being bitter. Invigorating rather than nauseating as is commonly the case with teas tampered with.

Similarly with coffee, meat, bread, and cakes. It's no longer what it used to be, and my wife and I are currently on a crusade to find our way back to the way things used to be. Luckily for us, Porto is a town where the old way of doing things still exists. There are delicatessens, and special shops for tea, coffee, meat, fish and cheese. Considering how much better some of this stuff is than what is generally sold in supermarkets, it can be argued that the products bought in special shops are cheaper. In the case of tea, it's not even an issue of quality over quantity. Loose tea sold by the kilo is cheaper than teas from typical brands, and when it comes to quality, nothing compares to loose tea straight from the producers.

Rococo Cup with handle

By Vincennes Porcelain (France, circa 1739–1756), Francois Binet (France, active 1750-1775, born 1731) - Image: http://collections.lacma.org/sites/default/files/remote_images/piction/ma-31852871-O3.jpg Gallery: http://collections.lacma.org/node/229367 archive copy, Public Domain, Link

Spreads and Other Costs

I've made it a rule for myself to make long term investments rather than opportunistic short term trades. This has several advantages, the main one being that it frees me from having to pay attention to short term moves. I can do other things while I wait for the long term trend to play out. One way to look at this is that time is a valuable resource that shouldn't be wasted. It should be enjoyed. Spending too much time following market action is therefore a cost to be avoided.

Another advantage to my strategy is the fact that spreads and other costs associated with transactions become less important. While the spread is a major cost to a day trader, it's of little importance to those holding onto an asset for years before selling. This allows us to consider a wider range of assets. We can buy real-estate and physical gold rather than their related paper versions.

The cost of buying a house is so high that it only makes sense to buy and hold for years. The same is true for physical gold. A day trader is therefore limited to paper versions of these asset types. They can buy real-estate related companies, they can trade gold futures, and they can trade shares of gold mines. But they cannot lay their hands on the actual underlying good. Only those with a long time horizon can do this.

Being limited to paper assets is a cost to those with a short time horizon, because paper assets can default. Real-estate companies and gold mines can go bankrupt. Future markets may break. Gains seen in physical assets may not translate into corresponding gains in paper counterparts.

This is not to say that spreads are irrelevant to those with a long time horizon. It's a cost worth avoiding as much as possible. The point is that spreads shouldn't prevent us from buying physical assets. The fact that physical gold trades at a premium to paper counterparts is not a reason to avoid it as a long term investment.

Rather than comparing physical gold to its paper equivalent, the right way to view it is to compare it to owning real-estate. If we buy a second home as an investment, we do so with a long time horizon in mind. We do so knowing that there are all sorts of expenses associated with both buying and selling. There are fees and taxes to be paid while we hold it. If we intend to rent it out, there's overhead and costs associated with that too. Furthermore, it cannot be bought or sold in pieces. It's all or nothing.

Compared to real-estate, physical gold has all sorts of advantages. The spread is smaller, storage cost is very low, and there's no demand on us for maintenance. Physical gold is a perfect alternative to real-estate, especially for lazy people like myself. Furthermore, the cost of owning physical gold can be lower than that of owning paper assets. There are no inherent annual fees associated with physical gold. This becomes all the more appealing during times of increasing taxes. Real-estate and paper assets can be taxed. Physical gold, on the other hand, cannot be taxed without our willingness to inform the taxman about our holdings.

Over a long enough time span, physical gold comes out very cheap to hold, so much so that it dwarfs the transaction costs. But this requires planning from our side. We mustn't buy so much gold that we'll be forced to sell within a year or two. Here again, we must view our physical gold as being similar to real-estate. We mustn't buy too much. Our purchases should be such that we get the benefits of ownership without the stress and anguish associated with stretched positions.

Cottage

By Valtov at fi:wikipedia - Originally from fi:wikipedia, Public Domain, Link