-- Posted Thursday, 8 September 2011 | | Disqus
By Dominique de Kevelioc de Bailleul
As a growing sense of a world about to turn upside down at any minute—and pretty hard, too—one has to wonder if much of the extreme political, social and economic events coming at us all at once from across the globe tie to the natural forces of a world desperately disentangling itself from the gross unfairness of a global economic model, its political systems contrived to enforce it, and the side-effects of its once-willing participants seeking justice through the use of a new model now that the old one no longer works from them.
Those studied in such matters have already made the connection between the post-Bretton Woods era and today's payback. In fact, many have predicted the inevitable turmoil—but the sense (the underlying connection not yet made by many) that the world is about to change radically has finally begun to take hold of the mainstream, where it really matters.
“Markets usually do a pretty good job of coping with problems one at a time,” Oaktree's Howard Marks wrote in a note to clients. “When one arises, analysts analyze and investors reach conclusions and calmly adjust their portfolios. But when there’s a confluence of negative events, the markets can become overwhelmed and lose their cool. Things that might be tolerable individually combine into an unfathomable mess whose extent and ramifications seem beyond analysis.”
Isn't what Mark describes a manifestation of a complex global financial model taking on a life of its own, as discussed in Nassim Taleb's book, The Black Swan, which was inspired, in part, from Benoit Mandelbrot's Chaos Theory?
But unlike the surprise fall of the Soviet Union in 1989, the collapse of the U.S. and Europe, along with the two regions' 88 percent lock on global currency reserves, has, so far, played out in a most cruel and slow death. But maybe that's about to change.
According to JSMineset's Jim Sinclair, the notion that the gold price has strayed too far from its 200-day moving average neglects to factor in Mandelbrot's theories of the unpredictable nature of complex modeling outcomes. Sinclair has said that the gold price has now moved into the “geometric phase,” taking a page from Mandelbrot's work and applying it to the gold price. If $1,764 holds this year, Sinclair may also have his timing correct for the geometric phase, as well.
How many fat-tailed correlation plots of historical Treasury yields, money supply levels, debt-to-GDP ratios and a plethora of other broken relationships to the norm need demonstrating before other gold experts wake up to realize that the “new normal” mantra spewed on financial programs is the latest misdiagnosis of a condition that seeks to explain a malady that's anything but normal.
But when feigned explanations for the rapid advance of the gold price from none other than the Sigmund Freud of economics, Paul Krugman, comes popping out in an early-morning exercise of free association during a bout of unexplained insomnia, you really know that overdue canary (U.S. economy) is never coming back out of that mine hole.
For more on this point, read Peter Schiff's article, The Last Haven Standing.
“The conscience of a liberal” still can't find a conscience, it appears, and may explain his insomnia.
“Yes, it’s 4:30 AM where I am,” Krugman began his post. “I found myself wide awake, thinking about gold prices. You got a problem with that?”
No, hard-money advocates don't have a problem with that, Krugman. But apparently, you have one.
Ever since Jim Sinclair, James Turk, Peter Schiff, James “Mr.” Dines and Richard Russell began losing sleep, too, over the inevitable fate of the U.S. dollar—back in 1999—readers rightfully discerned the authenticity and motive of these fountainheads of money theory by taking action to protect themselves from a debauched dollar way back then—and have since been sleeping very well. And by the way, anyone who seeks to communicate with made-for-Princeton deterministic graphs, not only shows a lack of understanding of the possible applications of Chaos theory to global markets, but demonstrates an unwillingness to communicate to others outside of the Church's cryptic language, too. Maybe that's a good thing. Go back to sleep.
http://www.beaconequity.com/jim-sinclair-applies-chaos-theory-to-gold-price-krugman-loses-sleep-2011-09-08/
-- Posted Thursday, 8 September 2011 | Digg This Article
| Source: GoldSeek.com
