If I Were a Rich Man
By Vern Gowdie in Gold Coast, Australia

With Christmas approaching, it’s time to step back from the market action and take stock of what’s really important in life.

Fiddler on the Roof was released in 1971. The movie won three Academy Awards.

Tevye, the main character, is a poor dairyman in 20th century Russia. He is the father of five daughters. Tevye talks to God a lot about the difficulties of raising family, religion, traditions and being poor.

In one scene he sings about what it’d be like…

‘If I were a rich man,
Ya ha deedle deedle, bubba bubba deedle deedle dum.
All day long I’d biddy biddy bum.
If I were a wealthy man.
I wouldn’t have to work hard.
Ya ha deedle deedle, bubba bubba deedle deedle dum.
If I were a biddy biddy rich,
Yidle-diddle-didle-didle man.’

Tevye thinks that if he were a wealthy man he wouldn’t have to work hard.

Perhaps.

Another verse from the song is:

‘I’d build a big tall house with rooms by the dozen,
Right in the middle of the town.
A fine tin roof with real wooden floors below.
There would be one long staircase just going up,
And one even longer coming down,
And one more leading nowhere, just for show.’

Tevye’s dreams are the same as the majority who fantasise over scoring it big…the lotto win or backing the hot cryptocurrency.

Ah, the rewards that await. Bigger house. No more work. A life of leisure awaits.

Dreams and reality often don’t align.

I learnt this first hand from Dr Joanne Stern PhD.

Joanne is a psychologist based in Aspen, Colorado and the author of Parenting Is a Contact Sport: 8 Ways to Stay Connected to Your Kids for Life.

Aspen and its surrounds are home to some of the wealthiest people in America. Aspen is proof ‘money does not buy happiness’. Joanne told me the divorce rate, suicide and drug dependency issues in Aspen are all well above the national average.

Joanne has shared with me a number of stories about the wealthy families she’s counseled over the years. Jealousy, lack of affection, parental remoteness, greed, resentment, idleness, infidelity, manipulative in-laws — are all some of the issues that provide Joanne with a steady stream of clients.

At Port Phillip Publishing our every endeavour is focused on assisting you to create and retain wealth. Making smarter investment choices. Providing a different perspective on the global economy. Designing strategies that best suit your risk profile and stage in life.

However, it must be remembered that having money is only part of the well-being equation. Emotional stability is equally as important. A rich life is measured in much broader terms than your bank balance.

Numerous research papers looking at the connection between money and happiness conclude that more money does not equal greater happiness.

There’s no question money does afford a higher standard of living — better schools, a safer neighbourhood and access to better health care.

This explains why the middle class tends to rank higher on the happiness scale compared to those living in poverty.

However, there is not a quantum leap in happiness between those in the middle class and the wealthy. In fact, some studies suggest a percentage of the wealthy are downright miserable…on par in the emotional stakes with those in poverty.

The worry of having money — who is after it? Are they really my friends? What do they want? Can I trust them? What happens if I lose it? Is that in-law a gold digger?

The constant second guessing can be exhausting and in turn can lead to (varying degrees of) paranoia for some wealthy people.

As the old saying goes: ‘if you are going to be unhappy, then you might as well be rich and unhappy.’

However our aim is to provide you with the skill set to assist you in having ‘your cake and eat it too’ — wealth and happiness.

Another well used saying is: ‘It’s all about the journey, not the destination’.

Taking stock of what you have and not lamenting what you don’t is critical to achieving inner peace and happiness.

If you covet what other people have, you’ll live a life of filled with bouts of jealousy and misery — unless you’re Jeff Bezos (Amazon founder and the world’s wealthiest person) there is always going to be someone with more than you.

Things that are important to and contribute to emotional wellbeing are:

• Family — all the money in the world cannot buy love and respect. Losing the love and respect of my wife, three daughters and my closest family members would, to me, be a fate far worse than losing money.
• Health — money could not buy Kerry Packer good health. Appreciating the ability to rise and shine each morning is a blessing that should not be taken for granted. Treasure your health because without it your wealth is very much a secondary consideration.
• Employment — being engaged in a profession/occupation/business that excites you and is fulfilling, this creates a sense of wellbeing and self-worth. Do something you’re passionate about and you’ll never work a day in your life. You may not love your work, but at least be thankful for being employed and endeavour to be the best you can be at what you do.
• Friends — good friends are worth more than their weight in gold. True friendships should be cherished and nurtured. If all else fails, true friends will always be there for you. Last Saturday night, I celebrated 50 years of mateship with five friends (we started Grade 5 together in 1969)…it was a timely reminder of how special friends are to our well-being.
• Australia — we are indeed a lucky country. First world health. Freedom of speech. Tolerance. Clean fresh water. Great food. Excellent wines. Fantastic weather. Reasonably sound economy. Peace. Mineral wealth. Agriculture. Often times we lose perspective and whinge and moan about certain issues, but in reality, we have a whole lot to be thankful for in this country.

 

If we take time to stand back and apply a little perspective, there’s a lot of richness in our lives. Constantly reminding ourselves to be grateful for what we have is a constructive way to stay grounded for when the monetary rewards do flow our way.

Here’s some Festive Season tips to assist in building the wealth to go along you’re your gift of health and happiness:

• Financial Plan — identify your short, medium and long term financial goals. Clearly defined goals with realistic savings projections are far more likely to be achieved. The success rate of implementing a plan with believable and achievable goals is guaranteed to be higher than simply wishing ‘to be a rich man’.
• Budget — Live within your means. Don’t try to impress people you don’t know, with things you don’t need, purchased with money you don’t have. In the coming months/years the greatest credit bubble in history is going to bust. An entire generation accustomed to borrowing from the future to live a life of excess today are going to encounter a very unpleasant reality check. Act today to bring your household expenditure into line with what you earn and avoid the painful lesson that awaits so many of your peers.
• Avoid Debt — where possible you should avoid debt, especially for consumption purposes. Debt is simply an advance on tomorrow’s income. Low interest rates make larger amounts of debt affordable. This is the trap the authorities want you to fall into…borrow more to keep the debt-dependent economic model in motion. Don’t fall for it. With the end of the debt super-cycle in sight, being prudent has never been more important.
• Think a lot and act a little — all the very successful people I know do an extraordinary amounts of research (on purchases related to property, motor vehicles, shares etc.) before they act. There’s a fine line between doing too much research, leading to ‘analysis paralysis’ and not doing enough, that results in ‘acting in haste and repenting in leisure’. Do sufficient research to be comfortable with the decision you make and always build in a contingency plan. One question to ask yourself is ‘am I following the crowd or am I thinking independently?’ If you are following the latest trend, chances are it’ll turn out to be a bad decision.
• On balance make good financial decisions — It’s impossible to make every investment decision a winner. The trick is to minimise the losses. This is where ‘think a lot and act a little’ comes into play. Do your research. Listen to your inner voice. And remember ‘if it sounds too good to be true, it usually is’. Sometimes the best investments you make are the ones you do not proceed with.

 

Our daily newsletters and subscription services are here to assist you in your journey to a rich life — rich in knowledge, rich in personal wellbeing, rich in shared experiences, rich in sound investment choices and hopefully, rich in enjoyment.

Be thankful for what you have. Commit to building on your current base of knowledge and wealth. And enjoy each day for the experiences, lessons and beauty it has to offer.

Do this and you will truly be a ‘rich man or woman’.

Regards

Vern Gowdie,
Editor, The Gowdie Letter

What If Everything You Believed in Was False?
By Vern Gowdie in Gold Coast, Australia

There are very few absolute certainties in life.

Sunrise in the east, sunset in the west.

Even those old chestnuts, death and taxes, are not absolute certainties.

Biotechnology is looking to unlock the code to immortality. Who knows what scientific advancements await future generations.

And, there are some countries — called tax havens — were governments don’t put their hand in your pocket/s.

Centuries ago, the mere thought of being a non-believer would have seen you burnt at the stake. These days, according to National Geographic…

‘The religiously unaffiliated, called “nones,” are growing significantly. They’re the second largest religious group in North America and most of Europe. In the United States, nones make up almost a quarter of the population. In the past decade, U.S. nones have overtaken Catholics, mainline protestants, and all followers of non-Christian faiths.’

Belief systems evolve from our experiences. We project those beliefs into the future…extrapolation.

Beliefs like ‘property values always go up’ and ‘in the long-term share markets always rise’ and ‘you can’t go wrong buying bank shares’.

But as shown in the 3 December 2018 edition of Markets & Money,extrapolation is horse s**t.

What if everything you believed to be true, was actually only true for a specific period of time and for a unique set of circumstances?

And, that in wanting to persist with a truth built on falsehoods (future taxpayers should fund generous welfare programmes; asset prices must continue to rise; wages must grow; debt levels can continue increasing) we are taking the system to a point of collapse?

‘There is no reason to believe that the democratic decision made by the living in the face of their present needs and desires will be the decision that would maximize the chance of long-term system survival. The unpleasant conclusion is that it is possible for a society to choose economic collapse.’

The End of Normal — James Galbraith

What if everything we’ve been told about how an economy functions was based on a false premise?

What if the past 40 to 50 years of economic growth and financial market performance has been an aberration and not the normal?

What if the next 40 to 50 years is completely unlike what we’ve experienced since the 1960’s?

In his book, The End of Normal, James Galbraith raises these questions.

Roughly translated, the extract is telling us: ‘if we keep doing what we’ve been doing, we’re in for a world of hurt.’ The system will collapse under the lies.

The dynamics that propelled western economies to, what 70-years ago would have been an unimaginable level of prosperity, are no longer in play. That was yesterday. Not tomorrow.

The system we have today bears no resemblance to the post WWII world.

The strategies that produced the stellar (and as we now know artificially created) growth of the 1970 to 2007 period are no longer applicable.

In fact, the compounding effect of debt and demographics is toxic to the world we live in today.

In failing to recognise the changed conditions and refusing to alter course, our esteemed policy makers are threatening to take the system beyond the brink of collapse.

The Sweet Spot

After WWII, the western world hit the perfect sweet spot. There was a convergence of events that created a clear economic division between the West and the Rest.

• Access to cheap and abundant oil
• Industrialisation
• Population growth via the ‘baby boom’
• Improved health care — increasing life expectancies
• Military power — providing secure access to energy resources
• The opportunity to rebuild from the ashes that were created by two decades of financial and social upheaval.

The following graph tells the tale of the two worlds from 1950 onwards.

Source: wikimedia commons [Click to open in a new window]

A few decades of prosperity created a culture of growth in the West.

Growth has come to be expected. We’ve been indoctrinated to believe growth is normal and perpetual.

Year after year, every utterance from government officials, IMF, CEOs is all predicated on delivering growth. The message is that without continual growth we are doomed. Taking a breather is not an option.

The upshot of the perpetual growth myth is each generation believes it’s entitled (earned or unearned) to a better standard of living than the one that preceded it.

Government and their central banks were the self-appointed arbitrators on how much the perpetual growth machine needed to deliver to meet society’s expectations.

Any interruption to growth — a recession — was cured by a dose of fiscal (modifications to government spending and taxation) and monetary policy (interest rate adjustments).

The following chart shows eight of the eleven post WWII recessions responded to the prescribed medicine within a couple of years.

However, the economic patient is developing a resistance to recession antidote.

The recovery time for the last three US recessions (1990, 2001 & 2007) has progressively become longer.

It’s also taking far more central bank intervention to engineer a jobs recovery — even a phony jobs recovery based on a very loose definition of what constitutes employment.

Source: Business Insider [Click to open in a new window]

Given the sheer magnitude of the intervention (from all central banks) in the last recession, what happens when the next recession hits?

Is the next recession/depression the one that’s going to bring the system crashing down?

What gives?

‘The unpleasant conclusion is that it is possible for a society to choose economic collapse.’

The technology genie is well and truly out of the bottle. At a rough guess, there’s probably a few million ‘tech heads’ in the world looking to develop a multi-billion-dollar disruptor for all sorts of industries.

The future pace of technological advancement is going to make the achievements of the past decade seem glacial by comparison.

In the face of all this disruption, society is not about to give up on its entitlement doctrine…wages growth, retirement at 65, and welfare. These are remnants of an era that cannot possibly be repeated. Therefore, these expectations cannot be delivered upon…but as they say in the movies ‘we’ll die trying’.

Governments that even hint at realigning their budgets and labour laws to reflect the new world are destined to suffer at the ballot box. Minus the hard decisions, the rather unpleasant conclusion is we hit the wall…in a 2011 Greek type scenario, only more severe and more widespread.

Two powerful forces — the legacy of our past and the wholesale disruption in our future — are destined to meet.

The economic reality is, our future cannot afford our past.

What gives? My guess is the system of industrial relations, welfare and healthcare as we know today will be vastly different to the one that exists in a decade’s time.

Minimum wage rates, free health care, the plethora of social security payments will all be talked about by future generations in terms of ‘can you believe this once existed?’

What we fervently believe in (or think we were entitled to) will seem absurd to our children’s children.

There’s no doubt the world will enjoy another age of prosperity…depression also do not last forever.

However, the excesses of the current era must first be expunged. And secondly, the next wave of prosperity will not be for the west to enjoy in isolation.

The shattering of long held beliefs is going to create enormous disruption to peoples’ lives.

Those who are expecting the unexpected will be best placed to capitalise on the incredible opportunities that are certain to arise from this period of upheaval.

Regards

Vern Gowdie,
Editor, The Gowdie Letter

“On an episode of 60 Minutes, Tristan Harris, former Google product manager, admitted our smartphones and social media platforms are intentionally designed to make us addicted.

The greatest challenge we face, says author Dan Schawbel, is not terrorism, student loan debt, or political polarization…

It’s isolation.

Problem is, technology is isolation’s greatest incentivizer.

“Every time we pick up our phones,” Schawbel says in his book Back to Human, “we’re pulling a lever in the hope of winning an exciting reward, much like using a slot machine.

“Our devices offer many incredible benefits, including real-time interactions, efficiencies in workflow, creation of new ideas, and access to resources. At the same time, those devices have disrupted our relationships and made our workplaces more dysfunctional.

“Instead of strong bonds, we have weak ties. Instead of productive meetings, we have distractions. Technology has created an illusion that today’s workers are highly connected to one another, when in reality most feel isolated from their colleagues.”

Fortunately, there’s a way out of the technology trap. (And, no it doesn’t involve becoming a luddite.)

Schawbel has some ideas he recently shared with James Altucher (below).

The gist: Stop using technology as a crutch.

Get back to being human. ”

[Time for a jigsaw puzzle maybe?]

Excerpt from Laissez Faire Today Magazine.

How the Centralized Media Lost Its Power over the People

By Max Borders

 

In 1977, reporter Carl Bernstein, of Watergate fame, wrote an exposé on his fellow journalists. More than 400 of them, he revealed in Rolling Stone, had done the business of the CIA.  Members of the press had “provided a full range of clandestine services — from simple intelligence gathering to serving as go-betweens with spies in Communist countries.”  And in some cases, leaders of top American news organizations had been in on it.

Bernstein’s exposé was just the start of what would become a larger picture of collusion between US government agencies and the news media.

So much for objectivity — or the vision of the media as an independent check on the federal government.

By 1979, a few other intrepid journalists began to lay bare the extent of the incestuous relationship between the media and the CIA, much of which had apparently been covered up by the Church Committee in the wake of the Watergate hearings.

The facts surrounding Operation Mockingbird, for example, demonstrated that the CIA had only to dangle a few carrots — and maybe brandish a couple of sticks — to co-opt the media for both intelligence and propaganda purposes. And indeed, the media were very different animals in the 1950s. Massive. Top-down. Corporate.

The Blue Church

Theories abound as to why this had been the case, but one of the most persuasive comes from serial entrepreneur and social theorist Jordan Greenhall, who posits that the media evolved this way. Greenhall thinks the organization of the media in the 20th century was largely an emergent phenomenon. In other words, even if power was conspiring with the media, it was just the sort of conspiracy that had been likely to crop up at that place and time.

Greenhall calls it the “Blue Church.” He says it “solves the problem of twentieth-century social complexity through the use of mass media to generate manageable social coherence.”

We might be skeptical of grand designs and conspiracy theories, but it’s easy to notice that older people tend to be nostalgic about the Walter Cronkite era. In those days, they say, we were more united. Barring a couple of instances like the Vietnam protests or the civil rights marches, our general civic narrative was, indeed, more coherent than it is today. And the older folks have a point but for reasons that might now strike us as cynical.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society,” wrote Edward Bernays in Propaganda.

“Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.”

Though this should strike us as counter to the spirit of free expression and thought, Bernays was not exactly wrong.

“Mass Media for Social Control”

The 20th-century social order was built on a shared, centralized form of collective intelligence, according to Greenhall.

The Blue Church is a kind of narrative/ideology control structure that is a natural result of mass media. It is an evolved (rather than designed) function that has come over the past half-century to be deeply connected with the Democratic political “Establishment” and lightly connected with the “Deep State” to form an effective political and dominant cultural force in the United States.

Greenhall believes we can trace the Blue Church’s roots to the beginning of the 20th century, where it arose in response to “the new capabilities of mass media for social control.” By the early 1950s, the Blue Church began to play an outsized role in shaping America’s culture-producing institutions — and thus public opinion. Sometime in the latter half of the 20th century, it peaked. But, writes Greenhall, “it is now beginning to unravel.”

In the 20th century, society became much more complex. Information traveled faster. And for people to see themselves in solidarity both with each other and with a larger protective security apparatus, everyone would need to get the right message. The Blue Church rationale had been: our security requires both a common enemy and a common narrative.

And for the most part it worked. The only way to achieve a shared collective intelligence, however, was to control the media. Power could no longer tolerate the idea of the media as a loose collection of beat reporters getting scoops and running with them on anyone’s terms. Outlets, editors, reporters, and readers would have to follow master narratives so that the people could socially cohere.

“The mass media serve as a system for communicating messages and symbols to the general populace,” wrote Noam Chomsky in his classic of media conspiracy, Manufacturing Consent. “It is their function to amuse, entertain, and inform, and to inculcate individuals with the values, beliefs, and codes of behavior that will integrate them into the institutional structures of the larger society.” Even if one is generally reluctant to agree with Chomsky, as I am reluctant, this point is compelling.

Centralized Society

Why is social coherence so important?

Greenhall reminds us that in the transition from the 19th to the 20th century, there were massive shifts in social complexity: agrarian to industrial, rural to urban. Humanity leapt from horses to rail to cars and airplanes, effectively shrinking the world. By 1953, Watson and Crick had identified the structure of DNA; Darwin had only published On the Origin of Species in 1859. The first theory of electromagnetism appeared in 1864, but by 1945, the first atomic bomb had been deployed. “This was a hell of a century.”

Human society cannot function “without a regulatory structure adequate to its level of complexity,” according to Greenhall. The Blue Church had been that regulatory structure and, therefore, the emergent solution to the problem of maintaining social order in an increasingly complex world.

But then something happened: the Internet.

Decentralization and “Memetic Warfare”

In the 1990s, hierarchical media organizations started to falter. A series of events began to reveal the cracks, and one might argue that the 20th-century apparatus of collective intelligence began its decline sometime between dial-up modems and the election of Donald Trump.

The 2016 election was perhaps the first time the Blue Church media apparatus was in full-throated support of one politician and against another. And yet it failed. Hillary Clinton was a well-funded establishment politician running against a loutish outsider. According to Greenhall, however, Clinton’s opponents executed a digital insurgency to ignite what he refers to as the “Red Religion,” a populist movement with retrograde ideas and sophisticated communications tools. The Blue Church was neutralized. The media had fundamentally changed. Of course, there are all manner of distinct but interwoven causes of the 2016 election result. Nationalism. Scapegoating. Disaffection with the establishment. Hillary Clinton’s lack of vision and charisma. Even though all of these were factors, Donald Trump would not have been elected without a digital insurgency capable of challenging the Blue Church. Old ideas. New tech.

Just one example lay with Cambridge Analytica. The big-data startup, fresh off an apparent win with Brexit, worked its magic with Trump, too. The modus operandi of Cambridge Analytica was to harvest sentiment data from social media posts. They would then match this data against the most powerful of the personality models used by psychologists the world over: the Big Five. Finding the Big Five’s patterns in the data, Cambridge Analytica could then mine for messages that the campaign could parrot back to those from whom it had been mined.

But Cambridge Analytica might be viewed as somewhat centralized. Memes from “Kekistan” — produced by the so-called “Autists of Kek” — were all about a clever mix of mockery and misinformation contra Clinton. Couple these Kekistani insurgents with foreign fake-news producers, and the result was a win for the famous billionaire who became beloved by both spit-and-sawdust America and those weary of Blue Church posturing.

One brilliant strategist predicted, if not seeded, the Red Religion insurgency in 2015. In a paper for NATO, Jeff Giesea wrote:

“Memetic warfare can be useful at the grand narrative level, at the battle level, or in a special circumstance. It can be offensive, defensive, or predictive. It can be deployed independently or in conjunction with cyber, hybrid, or conventional efforts. The online battlefield of perception will only grow in importance in both warfare and diplomacy.”

Memetic warfare could be waged against ISIS or the Democratic National Committee.

Mainstream media as a mediating structure — a means of collective intelligence and social coherence — will never be the same. Decentralization means the popular control of making media yields agile platoons: citizen investigators, checkers, trolls, purveyors of fake news, and other dynamic new hive minds. These can assemble and dissolve in real time.

The Evolution Continues

Think of the Gray Lady, a.k.a. the New York Times. Imagine her as a kind of automaton, powerful but stiff. She’s surrounded by a thousand tiny drones. The drones are angry. The Gray Lady tries in vain to swat them with her cane. But her cane is no match for the swarm.

So what does this mean for social coherence?

It depends. Even if one thinks Greenhall is being too cynical in concluding that government and media were fated to collude in the 20th century, one still might think the country needed some degree of social coherence. Social coherence is both a way of dealing with complexity and a way of maintaining some unity in the face of cultural entropy — diverse values, beliefs, and so on that can tend to fracture people. But social coherence for great secular religions — to preserve large, top-heavy nation states — might no longer be possible. (It might not be necessary, either.)

So, in reckoning with the coming era, how do we get social coherence? We’ll have to see. We can take heart in the fact that there is less at stake in the fate of any single system in decentralized environments with smaller jurisdictions than there is in the fate of a monolithic system. Decentralized environments are more “antifragile.” Social coherence need only develop locally in most cases.

Whatever one thinks the future might or should be like, hierarchical media structures no longer provide social coherence. Knowledge and information no longer travel in bidirectional flows up and down chains of authority and expertise. The media have been lateralized. Information and disinformation alike want to be free. Social coherence will have to come about through different means, as within smaller units of social organization. The media are not the only mediating structure that is weakening. We have grown up with a few more pillars upon which civilization has depended, evolving more or less, since the time of Galileo.

This article originally appeared on FEE.org. 

The foregoing is excerpted from Max Borders’s new book, The Social Singularity.

‘[Business] is a bit like swimming in the ocean. It can be exhilarating, refreshing and fun. However, the ocean you swam in yesterday; the one that provided you with an uplifting experience may not be the same as the one you swim in today.

‘The conditions may have changed and there could be a strong undertow, dumping waves or even sharks in the water.

‘The world of investing must be treated with the same respect you give the ocean.

’Investment markets are powerful forces and they can create and destroy personal fortunes. Investment conditions are constantly changing: markets (property and shares) boom and bust and economic conditions are continually evolving.

‘The business cycle goes through a regular process of expansion (boom) and contraction (recession) just like the tides of an ocean. This is a normal course of events.

‘The thing to be aware of is where you are in the cycle. Is the economic wave about to rise or are you on the crest, about to be dumped? 

‘When you decide to enter the investment world, it is wise to adopt the same caution as you would when deciding to swim in an unknown body of water. Gradually feel your way in.

‘Not to put too negative a point on it, but so many people have faced financial ruin by being naïve. Investment markets can be very rewarding, but it is important to remember some of the golden rules.’ 

And, one of the rules I alerted my daughters too is…

‘Booms always, always, always BUST. There is absolutely no exception to this rule. The longer a boom goes on the greater its gravitational pull to draw in as many suckers as it can before it busts. The US property boom (propelled by sub-prime lending) carried on for nearly five years before it finally collapsed. The 2003–2007 share market boom was the lure that Storm Financial used to attract many unsuspecting investors. The boom times felt like they were never going to end. For four years in a row the market returned a hugely impressive 20 percent per annum.

‘Because this incredible run went on year after year, people began to think that these results were normal…

‘The only difference with each boom is the duration. Some are short and others are long. The best tell-tale sign of a boom is when everyone is talking about it (whatever the “it” is) and they know someone who has made a small or even large fortune or they personally are about to make a small fortune. Resist the temptation to follow the herd (in fact they are lemmings headed for a fall from a very high cliff).

‘As you know, it can be rather uncomfortable going against the popular trend, but when the trend has exhausted itself you will be the smart one. As Charles Mackay once said, “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”’ 

Long gone are the days of sweltering hot classrooms, droning old teachers and those big, boxy television screens that would be wheeled in on a stand.

The evolution of classrooms was gradual. The first to go were the chalk boards. Their screeching, dusty faces were replaced with the smooth, unassuming whiteboard — able to be decorated with colourful felt-tip markers that didn’t make a sound.

Then came the projectors and Smart Boards. Forget about inanimate drawing boards, this state of the art technology was interactive and could be connected to the internet. Putting the World Wide Web at the fingertips of any classroom.

Fast forward to 2018, and we now have laptops — and in some cases, automated technology — in the hands of every student. Plunging us into a new era of digital learning.

The classrooms of today are air-conditioned, tech-savvy wonderlands. And it’s only going to get better from here.

Teachers of tomorrow

With the world quickly turning towards complete digitisation, the education system is doing well to adapt to the demand which the kids of today will soon contribute to.

With the help of private companies’ innovations, schools across the globe have been able to update their curriculums to teach the skills that future workplaces will require.

Polish technology developer Photon Entertainment is one company that has been blazing the trail when it comes to primary tech education.

Photon has recently released a robot that allows children to learn the basics of programming and coding by working on the robot itself.

The robot, pictured below, allows children to practice programming through a series of apps that can be coded in over a thousand different ways. If programmed correctly, the robot’s functionality will be unlocked step by step. Allowing it to see, hear, touch, measure distance and even distinguish darkness from light through its many sensors.

When you think about it, who better than a robot to teach kids how to program? It’s an exact science after all. While automated technology — in this case low-level artificial intelligence — might not be the most skilled in the arts or humanities, when it comes to coding they may be the best for the job.

Released in late 2017, Photon’s robot is currently available in Poland, Sweden, Singapore and Australia. But the company plans to enter the German, French and Slovakian markets very soon. And while teachers are still involved in the use of these robots, there may come a day when the robots can teach the class themselves.

For education around the globe, this is an enormous leap into the future. While the classrooms of the 2000s were focussed on teaching students how to use Microsoft Word, the challenge for teachers now is to prepare children for a digital workplace. And tech like Photon’s robot will be instrumental in making coding skills accessible.

According to a 2015 Euractiv report, 90% of today’s jobs require basic IT skills. And as more jobs become automated, those skills will likely need to become more advanced.

This is why 15 EU countries, including the UK, Ireland, Spain and Poland, have already integrated coding classes into their school curriculum. To entrench those skills at a young age, nine of those countries have already begun teaching basic coding at a primary school level.

As we continue to march forward into an automated future, programming skills will be critical to survive in the workplaces and industries of tomorrow. Henry Shterenberg, the CEO of blockchain company Suntri, stressed the importance of teaching coding to children early:

‘The pace of change is what humans are the most scared of, because never in our history has the pace of change been so fast — and it’s accelerating. So much stuff is coming at us at such a pace…and if we don’t teach our kids and our corporate leaders and government leaders that on a constant basis, we cannot be inclusive.’

Another tech developer, Chicago-based RoboThink, couldn’t agree more. They recently created a robot that children build from scratch with lego-esque blocks, and program it to perform small tasks.

As RoboThink’s CEO, Danny Park explains:

‘The public education system is not doing enough to have our students catch up to the rest of the world, so it’s up to private companies like us to see what we can do to break ground in setting standards and developing new content and curriculum.’

As technologies like blockchain and AI continue to become more mainstream, the companies who are innovating in this space are able to thrive. Particularly as the demand for this tech ramps up in the education sector.

If Australia wants to compete with the rest of the world when it comes to tech innovation and learning, we should prop up the Aussie companies that are pioneering the change.

Katie Johnson,
Editor, Markets & Money

The Gowdie Letter
Friday, 21 September 2018
Gold Coast, Australia
Vern Gowdie, Editor

Are the [economic growth/productivity] numbers real? Is the news genuine or fake? Can you believe anything we’re told by corporate bosses?

It’s tempting to write that ‘honesty is a commodity in short supply’, but that would not be accurate.

We may honestly believe what we think or feel, but is that belief based on truth, half-truths or downright lies? Have we been manipulated into thinking and acting by a carefully co-ordinated campaign of misinformation?

Our belief systems could be based on a body of lies that we mistook as a version of the truth.

Those who leapt to Serena Williams’ defence over how she was depicted in the Herald Sun cartoon may genuinely believe it was racist, sexist or whatever other ‘ist’ they can think of to label someone with.

Personally, I think it was an accurate portrayal — in the context of an editorial cartoon — of what happened at the US Open.

People want to twist and turn it into something it isn’t to fulfil an agenda…and the easily-influenced crowd jump on the bandwagon.

What should have been an ‘open and shut’ case in truthful storytelling is all of a sudden, clouded by a campaign based on falsehoods. Ones that are delivered with the venom of zealots.

Those who disagree with me may tag me as a ‘denialist’ or ‘chauvinist’. Creating another narrative that helps them rationalise their version of the ‘truth’.

The outcry over the cartoon is simply a reflection of the lies and deception that exist in society.

This recent tweet from Dr Clay Routledge (Behavioural Scientist, Author, Consultant, and Professor) sums up the trickery:

‘We are living in an era of woke capitalism in which companies pretend to care about social justice to sell products to people who pretend to hate capitalism.’

Parties publicly preach what they do not privately practice.

Delusion creates the illusion.

It was Adolf Hitler who said, ‘What luck for rulers that men do not think.’

Those who control an agenda are well aware of this truth.

When it comes to thinking, people are inherently lazy. It’s far easier to go with the flow, parroting whatever is the popular view of the day.

Social media has spread the virus of ‘groupthink’ to all corners of the world.

Those who dare to question the adopted view are neatly pigeon-holed with a label ending in ‘ist’.

Earth Hour is a prime example of ‘groupthink’. According to earthhour.org.au (emphasis is mine):

‘The fight for our planet’s future is on!

‘Australia is home to some of the world’s most iconic and breathtaking natural landscapes and wildlife. But just like many of the natural wonders across our blue-green planet, we’re facing massive threats to our biodiversity due to climate change.

‘That’s why millions of people in over 180 countries are switching off their lights for Earth Hour as a symbolic gesture to show the need for stronger climate action.’

Turn off the lights for an hour and get that warm and fuzzy feeling. What a croc of the proverbial.

After the hour is up, we go back to turning on the air con or heater, hopping on a plane, driving cars, cutting down trees, breeding more livestock, powering up our electric cars, building factories, watching TV.

We pretend we’re concerned about the environment because to do otherwise you risk being labelled a ‘denialist’.

If we are serious about cutting CO2 emissions, the solution is pretty simple.

Start conserving…money.

Stop spending. Make do with what we have for much longer. Reduce population numbers.

The following chart shows the dramatic increase in CO2 emissions since 1950:

Source: Statista

Is it a coincidence the increase in emissions has happened at precisely the same time as a post-Second World War population increase (baby boom) and the rapid expansion in credit (to buy things we don’t need with money we don’t have)?

Source: Value Walk

The real solution to climate change is for fewer numbers of people, spending less, reducing population numbers and restricting access to credit.

The subsequent reduction in demand would result in factories (producing all sorts of things) closing the doors. Emissions would decrease. The Paris targets would be achieved easily.

Politicians would NEVER tell us to reduce the birth rate, lower the immigration number and holster the credit card. This does not fit the ‘growth, growth and more growth’ agenda we’re repeatedly told is good for us.

Instead, we’re forced into paying for expensive ‘solutions’ (which includes all the hangers-on) that fail to make one iota of difference to the problem.

This growth narrative is one that (almost) everyone has bought into without asking, ‘Why is this good for us?’

On balance, is it?

Both parents working longer hours to service debts. Children being placed in daycare and after school care. Stress levels rising. Tolerance falling. More households living from week to week. Congested roads. Younger generations that no longer see how it’s possible to ‘get ahead in life’. Greater layers of bureaucracy.

Family life — be it functional or dysfunctional — weaves its way into the fabric of society.

Placing undue pressure and stresses on families to ‘keep up with the Jones’s’ has unintended consequences (and associated costs) for the community.

This is not healthy.

Please don’t misinterpret my message as being anti-growth.

Steady growth at pace we can afford is good. But that’s not always how the world works.

Those behind the ‘growth’ agenda — politicians, bankers, corporates — have convinced us that we constantly need more.

For instance, we’re told we need an inflation target.

Why would you want prices to rise every year by 2 to 3%? Do you want to pay 3% more next year for petrol, bread, clothing, child care, alcohol?

I didn’t think so.

It makes no sense.

Inflation creates the illusion of progress, but it’s the equivalent of a dog chasing its tail. Lots of activity for no real gain.

The politicians want inflation to diminish the value of debt, enabling them to continue make big promises with borrowed money. But they cleverly disguise their agenda, by telling us that its ‘good for us’.

And they get away with it because ‘men do not think’.

Trees do not grow to the sky. Yet, we’ve somehow allowed ourselves to be convinced they can.

The truth behind the relentless pursuit of growth is slowly being revealed. Unfortunately, like most great revelations, the lie we’ve been living will only be truly exposed by an ‘event’ — a public airing for all to see.

But the truth is there for those who take the time to think.

In the book ‘On the Psychology of Prediction’, acclaimed psychologists Kahneman & Tversky wrote:

‘For if we can explain tomorrow what we cannot predict today, without any added information except the knowledge of the actual outcome, then this outcome must have been determined in advance and we should have been able to predict it.

‘The fact that we couldn’t, is taken as an indication of our limited intelligence rather than of the uncertainty that is in the world.’

When the next credit crisis hits and asset prices plummet, and mortgagee-in-possession signs pop up and retirees complain about the loss of their life savings…none of this will come as a bolt out of the blue.

All the information we need to make this prediction is known in advance, which is why ‘this outcome must have been determined in advance and we should have been able to predict it’.

However, people choose to ignore the truth because believing the lie is easier.

And the truth is this:

• Global debt has never been higher and with each passing day it continues to accumulate.

• Interest rates (the cost of debt) have never been lower. At some stage rates must move higher.

• The US share market is valued on one of the highest Cyclically Adjusted PE (CAPE) in its history.

• Property prices are valued on the highest multiple of household income in history.

The extremities of growth have been reached or must be very close to it.

We know from history (and physics) what happens when things get out of balance.

They correct in an equal and opposite fashion.

Predicting this correction in advance requires very little thought.

However, the ‘thought police’ in the media, investment industry and government, persist in promoting an agenda that encourages people to continue investing in over-priced assets and living a lifestyle they cannot afford.

The BIG FAT lie we’ve been living will be exposed. Unfortunately, due to the dumbing down of society, we’re ill-equipped to handle the truth.

And here’s another prediction: it’ll be open season on the once protected central bankers.

Someone has to be to blamed for this — as long as it’s not me.

Sounds a little like Serena Williams’ defence, doesn’t it?

Regards,

Vern Gowdie, Editor, The Gowdie Letter

Article from Lassez Faire Magazine

Author – Chris Campbell

“You’re sitting at a Chinese restaurant and the waiter brings your fortune cookie.

You crack it open and pull out the little slip of paper.

There’s a picture of a little red dragon with menacing eyes. You flip it over.

It reads: “Change is coming.”

How do you feel?

If you’re one to believe in fortune cookie messages (and even if you’re not), it might feel a little ominous.

Especially with that little dragon… with its flaming eyes… staring you down.

However much you want change to come, if you’re honest with yourself, there’s a spurt of anxiety.

Why?

The answer is simple and hardwired into your brain: You fear loss far more than you value gain.

The Fear of Loss

That’s one thing Dan Kahneman gets at in his book, Thinking Fast and Slow.

In the book, he shows how your perspective of reality is exaggerated at least double when you’re afraid of losing something.

But he didn’t tell the whole truth.

He knew this idea would be heavily scrutinized, so he played it safe.

In private, he admitted his data actually shows people inflate their fears by about five to seven times more than reality affords. 

It only proves how powerful this bias really is.

Even someone who’s acutely conscious that this bias exists will hide the extent of it for fear of loss (of respect, status, credibility, whatever it is).

The Dragon Within

The most ancient part of your brain, the Reptilian brain, is a survival machine.

Nothing else is more important.

Unchecked, and even checked, it acts autonomously.

Your limbic brain and neocortex, the “higher brains,” are still largely beholden to this Dragon within.

This Dragon is hardwired to make you and your environment predictable. That way, loss is impossible. (Or so it thinks.)

It’s wired to help you avoid emotions and insights that could shed light on why you can’t seem to “get it together.”

Because, if you saw them for what they were, you might change and grow.

And growth is the enemy of safety — it requires a certain level of unpredictability.

The Hero’s Journey

Here we invoke mythologist Joseph Campbell’s classic Hero’s Journey.

Campbell, through his life’s work, realized a single “monomyth” shows up in every era, culture, race and religion…

And that all of these myths and stories were passed on not because of superstitious fantasies — but because they contained within them life’s greatest (and universally human) lessons.

It’s the reason we love the Hero in stories, movies and myths. Because we understand his or her journey is actually our own.

One lesson that shows up everywhere: Growth requires mustering up the courage to take a Journey into the Unknown.

The hero reaches a point in his life where he must leave safe, comfortable domesticity and set off on an adventure to an unpredictable place. A strange place with no shortage of dragons to face and conquer.

[Your fortune cookie we mentioned earlier, in this framework, could be what Campbell called the “Call to Adventure.”]

This Journey, however, is the last thing the Reptile, that Dragon-breeder in your brain, wants.

It’s for this reason…

The dragon hides uncomfortable truths about yourself (the “Shadow”) to keep predictability intact. To stave off loss.

It compartmentalizes trauma, hides the way in which you might sabotage your success (even when it’s painfully obvious to everyone else), and shields you from certain innate gifts that might inject any complexity into your life.

For this reason, it’s obsessed with rituals. The ritualized life is the “safe” and predictable life.

It explains, in part, why someone would rather stay addicted to horrible, destructive habits (including, but not limited to, drugs) rather than change.

The addictions become rituals to keep life predictable.

It’s all a way to protect oneself from the biggest predator of all — Uncertainty.

Even when the addiction is clearly destroying his or her entire life, the fear of the unknown is greater.

Imagine the insanity of this.

The most insane thing, however, is we all do it.

The Road to Freedom

The road to true freedom is, fortunately, within your control.

But it requires you to exercise your uncertainty muscle.

It requires stepping into the Unknown. Letting go of the stories that make your life predictable.

Otherwise, you’re a hostage to what you think you know.

You’re a bubble boy — a slave to the story you tell yourself throughout the day.

One realization above all else changed the game for me:

Uncertainty is the bedrock of all fear.

It’s that simple.

Fears are just predictions (projections) of things not happening right now.

And, if Kahneman is to be believed, those fears are 99.9% of the time exaggerated. Bigly.

How to do it?

Here’s something I’m finding useful, through life’s concentric circles of the Hero’s Journey, to beat back the dragons.

1] Acceptance. 

The wisdom of Alcoholics Anonymous applies here:

You can’t change a problem until you accept it exists.

Accepting…

A] uncertainty will always exist in your life

B] and so will your apprehensive of it and

C] there’s no escaping either of those things

This allows you to see through the Dragon’s projections.

It doesn’t help you push the fear away, but it does help you move forward with courage.

It might however conjure up anger, when you realize you’ve been living too small.

Accept that, too.

Use it as fuel to push further.

2] Name your Dragons.

Disassociating yourself from this fear of uncertainty is the second step:

Naming the dragons.

Imagine the fear of uncertainty is its own entity, something different from yourself.

What does it look like? How does it act?

Is it aggressive? Passive? Energetic? Lazy?

Give it a name. Make it something silly.

Like Pickles.

Ask it what it wants.

It might sound weird and hippy-flippy, but if you take this exercise seriously, you might learn a lot about your own fears.

Seeing your fears from a dissociated perspective…

Realizing your fears have been largely overblown…

It can be a bit unsettling at first.

That’s when, perhaps, depression and regret starts to set in.

Accept that, too.

More fuel.

Keep going.

3] Slay (And Tame) Your Dragons

In the Hero’s Journey, the hero must face the thing he fears the most and conquer it.

Only then will he receive the Elixir, that gift which takes him to the next level so he can get what he really wants out of life.

Uncertainty is scary. There’s no avoiding it. The courage to act in the face of fear, however, is what makes the Hero worthy of the name.

Start doing things that make you uncomfortable.

Take a dancing or singing lesson. (Especially if you’ve always said, “I’m not a singer…” or “I’m not a dancer…”)

Hire someone to help you learn a new language.

Start a meetup group in your area.

Begin that project you’ve thought about for years, but never really took seriously.

Travel.

Embrace failure.

Become that toddler trying to walk. You’re going to fall down. But, if you keep going, one step will turn into two… three… four…

Pretty soon, you’re running pantsless through the living room and nobody can stop you.

Dare to be proven wrong… to be exposed as a fraud. To be vulnerable.

Sir Ken Robinson put it this way: “If you’re not prepared to be wrong, you’ll never come up with anything original.”

The only thing you have to lose, really, is your emotional attachment to past stories you tell about yourself.

(So long as, of course, the fear you confront isn’t foolish and irrational like “jumping out of a plane without a parachute.” Common sense applies.)

There’s no freedom in keeping life predictable and “safe.”

There’s nothing heroic about cowering in fear of the Dragons within.

Act with courage. Be the Hero.

Write a new story.”

Until tomorrow,

Chris Campbell
Managing editor, Laissez Faire Today

 

Why Retail Is Not Dead
By Matt Hibbard in Albert Park

Barely a day goes by, or so it seems, without another retail chain hitting the wall.

Yesterday it was upmarket chocolatier, Max Brenner. Though to be clear, it has gone into voluntary administration. Its stores will continue to trade while the administrator tries to re-finance it, or sell it as a going concern.

Its 600 staff, though, must be nervous about what comes next.

The Max Brenner collapse adds to a growing list…a list that includes some high profile names.

Last year, it was high profile leather good retailer, Oroton Group. Meantime, Toys R us, Pumpkin Patch, Marcs, Herringbone and other chains have also gone by the way.

In a report in March this year, industry site Inside Retail Australia wrote that:

‘Almost 1,500 retail businesses are at risk of imminent collapse, including more than 260 retailers with turnovers of more than $10 million annually, according to research by SV Partners.’

It’s a scary number. If you just read that, you would think all is lost. But as the report went on to say: ‘This represents a 3 per cent increase of “at risk” retailers in the last 12 months.’

There is little doubt that retail is a tough game. The hours are long, and staff expenses are high. Plus, there’s nothing from stopping a bigger competitor from coming along and opening up right next door.

Yet despite the bad news, not everyone is doing it so hard.

The vacancy rates in some of our biggest shopping malls remain relatively unchanged. According to research by property group JLL, average retail vacancy rates in Sydney are just 3%.

While that is 0.5% higher than the previous half, it is the same rate as a year ago.

Part of this has to do with the big landlords. That is, those who own our vast shopping malls. Not only in how they manage tenants, but in how they manage their own space.

If you just read the headlines, you’d be inclined to think that retail is dead. That with the onslaught of the massive internet retailers (called ‘e-tailers’), all retail businesses will eventually fail.

But while there will be retail businesses that do fail (like any other businesses), it’s not so black and white. As it has always done, it will continually reinvent itself. Just like any other industry does.

Those huge landlords I mentioned, like Vicinity Centres Ltd [ASX:VCX], have already readied themselves for the change.

It was the reason behind its name change from Federation Centres two years ago. The name, Vicinity, represents, as Vicinity describe it, ‘A place to meet, a source of fun, entertainment and lifestyle…’

In other words, a place to meet and hang out with friends and family. Not just to shop, but to dine, watch a movie or grab a cup of coffee.

The vast shopping malls will become a ‘destination’ point. A place to experience things, rather than just to buy some clothes or shoes.

That’s also why Vicinity is focusing on its bigger malls and offloading its smaller centres. This week it announced the sale of 11 sub-regional and neighbourhood centres for $631 million.

That means Vicinity has now sold 35 of its near 100-centre portfolio at the time of its merger. (Note: Federation merged with Novion Group in 2015).

Chadstone Shopping Centre — half-owned by Vicinity — is also developing a hotel on its site. Plus, it will use other sites to build apartments.

The goal of that would be that owners never need to leave their retail precinct. They can go to a restaurant, go to a movie, and do their weekly grocery shop all in the one place.

There are also those that say brick and mortar retail is dead. But what some might not realise is that Amazon is planning its own store roll out.

It has been trialing Amazon Go, a store where there is no cashier. Shoppers pick up the goods they want via an app. Amazon charge their account the moment they leave the store.

Last month Bloomberg reported that Amazon is planning to roll out 3,000-plus stores by 2021. Though, for now, it is still in its infancy. That comes on top of its book and ‘pop-up’ stores across the US.

Of course, local retailers aren’t sitting around waiting for an imminent death. Harvey Norman Holdings Ltd [ASX:HVN] recently launched a completely revitalised flagship store in Sydney.

And JB Hi-Fi Ltd [ASX:JBH] bought out larger white-good retailer The Good Guys in 2016. It is busily integrating its operations, and sprucing up its online presence.

Just because Amazon has landed in Australia, it doesn’t mean the death of retail is a fait accompli. As the Sydney Morning Herald reported in August, total sales for Amazon in December last year came in at a paltry $16 million. That’s at a time when it should be its busiest.

No, retail isn’t dead. But as always, it continues to change. Not all concepts work, as we know. However, a good place to find out what is happening is by watching what the big shopping mall owners do.

All the best,

Matt Hibbard,
Editor, Options Trader