The Cycle Of Volatility And The Deluded Human Mind

Unfortunately, because of corruption, there is very little critical thinking which takes place in the public forum.  Reasoned discourse and exchange of ideas, so necessary to the success of freedom, science and human advancement are not embraced by power. 

There is also very little original thinking for the same reason.  Preachers who espouse an ideology need worshippers to follow their message as opposed to considering ideas and truth spawned by the free mind.  That dynamic also exists in financial analysis and the blogosphere.  Rote views are passed from blogger to blogger and group-think easily develops whether it is conscious or unconscious plagiarism.   As I have said before, part of the reason I don’t pass along any “trade secrets” is because of this dynamic. 

Very few people are willing to do the diligence necessary to understand anything in the detail necessary to make clear and reasoned decisions.  Most people would rather regurgitate what someone else is writing or thinking or saying.   In order to reduce my bias and the useless clutter infesting my mind, I seldom read anything written by another financial analyst or economist.  I really don’t care about opinions.  I care about facts, reason and a free mind’s qualitative interpretation of reality.  When a clear answer is not evident, then I am in a better position to draw conclusions in my best interest more than any other person.  And the same goes for your life.  No one is better suited to make decisions on your behalf, than your mind, void of useless clutter placed their by ideologues and zealots.  The same goes for trading or investing.  I seldom care to receive opinions of others.  I have all of the data I need and I have found there is no one else with a better system.  I’m sure they exist but they aren’t going to be sharing it for free.   If they are, it probably isn’t worth using. 

What’s the point to these opening paragraphs?  As we have discussed on here countless times, trust yourself or learn the art of trusting yourself.  And learn to do your own diligence in life.  Two things to think about as you clear your mind to read this post.  I tried to apply both of those truths while writing it.

Even though most people who read this blog live in relatively free societies, the reality is our freedom, or lack thereof, resides in our minds.  As we age, often our ability to think freely is muted or even destroyed by accumulated beliefs or lies of the mind. Our experiences and the constant bombardment of stimuli and bias has a very profound effect on our creativity and openness to new experiences.  This very fact is the reason why much of humanity's accomplishment and genius is achieved early in life or that early success is never repeated. In other words, during our relative youth we have yet to develop the prison that defines the human state of mind or the ego.

Today we are watching much of society's beliefs implode right before our very eyes. Economists, Wall Street, CEOs, political authority - everything they have told us for decades is now being brought into question.  Timeless maxims of the American dream,  an honest wage for an honest day’s work and supposed guarantees of a better tomorrow no longer apply for many who are innocently experiencing the victimization of systemic fraud. 

The indoctrination process in any society starts at a young age.  Although we don't call it indoctrination. Instead we call it learning or education.

Authority within our society has really learned very little about the economy or finance or timeless human values over the last few decades.  And as a result of this, society has made the necessary adaptations to survive. And will we again adapt to a new reality in our future for this very reason? To survive? In your lifetime, how much have you really learned?  Truly incontrovertible truth?  There is much less undeniable truth in this world than is portrayed. Society is on the verge of achieving major truth on one front - Washington has spent decades meddling with our freedoms, our economic opportunity and our self-sufficiency as a society just as they have meddled with freedoms of others around the globe. And that party is in the process of ending.  They just don’t know it yet.  That is a very good thing for the future of America even though it may not seem so today. Not so good for elites and many other countries who have relied on neoliberal economic policies of wealth transfer to prop up their own corrupt statist policies at the expense of human dignity and development.

Learning is a biological adaptation. The majority of organisms on Earth learn little or nothing during their individual lifetimes. On the other hand, many mammals are born in a highly immature state and so they must individually learn things crucial for their survival. In order to find food reliably, youngsters of foraging species must learn the spatial layouts of their local environments. In order to distinguish friends from enemies, youngsters of social species must learn to recognize the individuals who make up their social groups.
For several decades, behaviorists attempted to find the laws of learning that applied equally to all species, for any and all tasks, and that did not involve to any significant degree processes of cognition. But the modern view that learning assumes diverse forms in different species and behavioral domains, and operates in concert with cognitive processes that may be specific to particular species or domains, has for the most part suspended that search.
For social species such as humans and other mammals, an especially important form of learning is social learning. Observing the activities of others and learning about the world from or through them enables individuals to acquire information with less effort and risk...

Less effort and risk….  We “learn” from our parents or teachers or friends or Bugs Bunny or politicians or Wall Street or the mainstream media or South Park or MTV, and they learned from their parents or teachers or friends or Bugs Bunny or politicians or Wall Street or the mainstream media or South Park or MTV.  Continue this pattern over a whole society. A whole generation. Multiple generations.  Learning or social adaptation? Are they one and the same? Is adaptation the same as truth? Do I even need to ask?  What have you really learned other than what you were told you should learn by social influence?  How much you learned in school is completely undeniable truth?  Your mind should always remain free of the clutter that is adaptation or conditioning. To remain open to new thoughts, new experiences, new ways of thinking.  Open to things you “learned” were impossible, because they are most likely possible or even probable.  Or as a wise man said long ago, to be as a child.   "That can never happen"  or “That can’t be done”  is most often a myth perpetuated over and over again throughout history. Each day should be started with the intent of increasing our knowledge.  The intent to learn.  The intent to prove the impossible is in fact probable.

Every so often there is a student who asks why. Or who challenges their teacher as to the voracity of their beliefs or conclusions presented as truth. And, that student does so repeatedly. Many times those students are identified as problematic. Unruly. Unable to take guidance. Disruptive. They don't conform.  They don’t adapt.  Are they unruly or problematic or are they questioning the truth of social adaptation? Are they simply spreading their wings of free thought?  Questioning the questionable?  Are they showing signs of future potential to positively impact or even change the world?  Is nonconformity an even greater predictor of future ability than a student receiving perfect test scores aka conformity? 

Remember, while some type of testing may be  important to determine progress, testing is a conformist measurement tool. Testing of any sort is a discounting mechanism. Most every test administered by the educational system is simply a measurement of one's ability to learn what humanity already knows. Tests are mostly a measurement of the ability to mimic. To reason. To adapt. Not necessarily of truth. There is no method of measure ever devised that can determine the true potential for any human mind or any individual or any student. Period.

Any attempts at measuring the creativity or ability of any person is limited by the creativity of its author(s) or of what humanity has already discounted as knowledge, truth or lies. In other words, there is no way to test anyone on what humanity does not already know or has not already learned.  No one was able to test Albert Einstein for what was to come.  Because no one had ever dreamed what he dreamed.  Created what he created.  The same could be said repeatedly as it pertains to music, literature, art, science or even the plight of humanity and many true leader’s ability to impact great change and to bring great dignity to repressed people.  Did Gandhi or Martin Luther King test as children to be two of the world’s greatest leaders?

To embrace and nurture the unknown abilities of the individual mind is to embrace invention, art, literature, science and human achievement.  Does our educational system generally embrace the individual mind?  Or does it generally embrace rote and repetitive ritualization, mimicry and conformity?   Are your daily actions supporting the search for truth or of supporting existing social adaptation?  Are you moving humanity forward or backward?  Are you even in the game?  

So, how many children with great potential have had their minds destroyed by authority and its weapon of conformity? By an educational system or society that embraces conformity or adaptation over the individual freedom of the human mind?  How many children were told they will never amount to anything by authority or society? As an example, what are students really learning in cultures or educational systems that embrace rote memorization, cramming schools and demanding parental learning methods? (Mind you, this method of learning is becoming highly popularized amongst wealthy Americans as a result of our perceived educational deficiency comparative to many nations practicing this educational suicide or rote and ritualized adaptation.  Typical of this is teaching methodology is Korea, Japan and now China - the perceived new leaders of global economics and the coming Asian century.  A massive lie which will eventually reveal itself.)

Have you ever wondered why Americans, educated in an often dismal system, dominate Nobel Prize awards? Ingenuity? Invention? Science? Music?  Literature?  Americans who were born as Americans. Products of an often abysmal educational system. Why people of all cultures and backgrounds prosper at art, literature, music, science and human achievement in the U.S. when given the freedom to do so?  But most often cultures of their origin country, when repressed, lag in measurements of creativity, the arts, science, human development or economic achievement?  Do you believe a society where people who are free and are encouraged to lead self-determined lives and supported by a democratic banking system and government which promotes human development are capable of greater acts and expression of abilities?  Or do you believe state control, authority or bureaucrats in religion, science, government or other ideological institutions (conformity) are a measuring stick of what is beneficial to society and the search for individual truth and achievement?

It is most important that children are given every encouragement to express their individuality and encourage exploration without any process of retribution.  Because the only thing an education teaches you is what the world already knows or untruths that society has adapted to. Everything you learn in school is discounted by society. And often how to comply and conform within social norms and corporate economic structures.  It's value to the advancement of society or humanity is therefore limited or in some cases, completely worthless or destructive. And, its foundations are often based on lies of the mind. And, so we should accept these as limitations. Not only in school but in society, our economy and at our place of work.

How often have we talked about the culture of business or leadership and how successful leaders recognize their goal is to unlock the potential of their associates or their citizens and not to control them?  To empower them.  CEOs and politicians are not God laying down incontrovertible truths. They are stewards.  Most often poor ones at that.  They are bureaucrats.  They are rigid thinkers who have adapted to fit within the current system regardless of how corrupt or morally-unjust it is.  As we have cited, they should instead encourage and embrace human capital and its creativity. Democratize opportunity for the betterment of society rather than attempting to control it. Or worse, believing they have the answers to what makes society more enriched or will fix our economy.   Fixing our economy involves fixing our democracy.   When our democracy is fixed and our economy reflects those values, we will be absolutely fine.

If we were never to challenge current adaptations, beliefs or comprehension, we would never have advances in human knowledge.   We would still be living in caves.  Bureaucrats are not the source of our greatness nor will they provide the answers to our economic disaster.   Frankly, they are incapable of understanding what those answers are.  How have we as a society outsourced our democracy and freedoms to these incompetent frauds?

To tell a child anything is impossible limits the imagination , creativity and achievement which defines the human spirit and consciousness. In effect, I believe in encouraging constructive disagreement through discourse and even through positive contention. A process not generally embraced by our educational system or, for that matter, much of society. And surely not something embraced by politicians seeking conformity, often at any cost. And definitely not within corporations where kings still rule their serfs. I strongly believe in constructive contention as a business management style, as a requirement of democracy and through the learning process of a child. The uninhibited child-like imagination of questioning most everything is a greatest of human traits. Yet it is a gift that is repeatedly beaten down by bureaucrats. By social adaptation. By society. By business leaders.  By our educational system. By the state.  By the bureaucratic demand of conformity and the marginalization of reasoned dissenting views.

Along those lines, I find the following quote taken from a man who lived long ago to be appropriate as an introduction to the charts in this post. Forget about what he is specifically talking about. The topic is war. Instead apply his thoughts in a more general sense of human behavior. Really think about what he is saying and apply it abstractly to any environment you see developing around you or around society or the economy or the world.

Psychologists recognize the gregarious impulse as one of the strongest primitive pulls which keeps together the herds of the different species of higher animals. Mankind is no exception. Our pugnacious evolutionary history has prevented the impulse from ever dying out. This gregarious impulse is the tendency to imitate, to conform, to coalesce together, and is most powerful when the herd believes itself threatened with attack. Animals crowd together for protection, and men become most conscious of their collectivity at the threat of war. (I would add nationalism and any perceived threat including terrorism.)

Consciousness of collectivity brings confidence and a feeling of massed strength, which in turn arouses pugnacity and the battle is on. In civilized man, the gregarious impulse acts not only to produce concerted action for defense, but also to produce identity of opinion. Since thought is a form of behavior, the gregarious impulse floods up into its realms and demands that sense of uniform thought which wartime produces so successfully. And it is in this flooding of the conscious life of society that gregariousness works its havoc.

For just as in modern societies the sex instinct is enormously oversupplied for the requirements of human propagation, so the gregarious impulse is enormously oversupplied for the work of protection which it is called upon to perform. It would be quite enough if we were gregarious enough to enjoy the companionship of others, to be able to cooperate with them, and to feel a slight malaise at solitude. Unfortunately, however, this impulse is not content with these reasonable and healthful demands, but insists that like-mindedness shall prevail everywhere, in all departments of life. So that all human progress, all novelty, and nonconformity, must be carried against the resistance of this tyrannical herd instinct which drives the individual into obedience and conformity with the majority. Even in the most modern and enlightened societies this impulse shows little sign of abating. As it is driven by inexorable economic demand out of the sphere of utility, it seems to fasten itself ever more fiercely in the realm of feeling and opinion, so that conformity comes to be a thing aggressively desired and demanded.

The gregarious impulse keeps its hold all the more virulently because when the group is in motion or is taking any positive action, this feeling of being with and supported by the collective herd very greatly feeds that will to power, the nourishment of which the individual organism so constantly demands. You feel powerful by conforming, and you feel forlorn and helpless if you are out of the crowd. While even if you do not get any access of power by thinking and feeling just as everybody else in your group does, you get at least the warm feeling of obedience, the soothing irresponsibility of protection.

Joining as it does to these very vigorous tendencies of the individual - the pleasure in power and the pleasure in obedience - this gregarious impulse becomes irresistible in society. War stimulates it to the highest possible degree, sending the influences of its mysterious herd-current with its inflations of power and obedience to the farthest reaches of the society, to every individual and little group that can possibly be affected. And it is these impulses which the State - the organization of the entire herd, the entire collectivity - is founded on and makes use of.

There is, of course, in the feeling toward the State a large element of pure filial mysticism. The sense of insecurity, the desire for protection, sends one's desire back to the father and mother, with whom is associated the earliest feelings of protection. It is not for nothing that one's State is still thought of as Father or Motherland, that one's relation toward it is conceived in terms of family affection. The war has shown that nowhere under the shock of danger have these primitive childlike attitudes failed to assert themselves again, as much in this country as anywhere. If we have not the intense Father-sense of the German who worships his Vaterland, at least in Uncle Sam we have a symbol of protecting, kindly authority, and in the many Mother-posters of the Red Cross, we see how easily in the more tender functions of war service, the ruling organization is conceived in family terms. A people at war have become in the most literal sense obedient, respectful, trustful children again, full of that naïve faith in the all-wisdom and all-power of the adult who takes care of them, imposes his mild but necessary rule upon them and in whom they lose their responsibility and anxieties. In this recrudescence of the child, there is great comfort, and a certain influx of power. On most people the strain of being an independent adult weighs heavily, and upon none more than those members of the significant classes who have had bequeathed to them or have assumed the responsibilities of governing. The State provides the convenientest of symbols under which these classes can retain all the actual pragmatic satisfaction of governing, but can rid themselves of the psychic burden of adulthood. They continue to direct industry and government and all the institutions of society pretty much as before, but in their own conscious eyes and in the eyes of the general public, they are turned from their selfish and predatory ways, and have become loyal servants of society, or something greater than they - the State. The man who moves from the direction of a large business in New York to a post in the war management industrial service in Washington does not apparently alter very much his power or his administrative technique. But psychically, what a transfiguration has occurred! His is now not only the power but the glory! And his sense of satisfaction is directly proportional not to the genuine amount of personal sacrifice that may be involved in the change but to the extent to which he retains his industrial prerogatives and sense of command.

I haven't given any context for this post, so by now you may have quit reading.   That would be what I would expect for most.  At the minimum, you may be wondering what I talking about or what this has to do with the two charts above.  Well, if you like to be spoon fed beliefs, you wouldn't be reading this post.  If you enjoy ideology, you wouldn't be reading this blog. This will never be a place visited by the mob or by ideologues.

You still may not understand how all of this ties together.  And since there is no context, that would probably be the most typical conclusion.  But let's take a look at two charts at the top of this post. Both are obviously unlabeled.  If you look closely, the movements in time and price are strikingly similar. 

Think about the context of this post in relation to these charts and allow your free mind to consider its possibilities. I'll reveal more detail within the next week or two.