Dr. Housing Bubble Interview

I hope Boing Boing readers enjoyed yesterday’s interview with Charles Hugh Smith.

Today I’m posting an interview with another of my favorite bloggers, Dr. Housing Bubble.

I discovered the good Doctor’s blog back in early 2006 and have been a faithful reader ever since. At the time my wife was a real estate agent and the two of us became puzzled, then obsessed by the bizarre socio-economic implications of the then still-inflating housing bubble. This obsession led to discovering great blogs like Patrick.net, Professor Piggington, Peter Viles excellent blog at the LA Times, and of course, the subject of today’s interview., Dr. Housing Bubble.

The Doctor blogs anonymously. Perhaps this is because of his “Home of Real Genius” posts where he highlights -- and loudly cackles about -- some of the most ridiculously overpriced real estate listings on the MLS. If staying incognito helps him do his work, I’m all for it because his blog is such an amazing resource. There is a tremendous amount of erudition, expertise and a profound understanding of both history and economics that go into his writing. Dr HB can take complex and daunting economic theories and lay them open with a surgeon’s skill making them easily understood by all. This guy is good, really good. When he’s on a roll (which is frequently) I’ve actually found myself getting jealous that I didn’t think of that first or even worse, wishing I was as smart as he is! I suppose that’s the best style of compliment I could give the good Doctor, isn’t it? (Jealousy being such a visceral emotion...). I encourage you to check out his blog and to check it out often. The Q&A starts after the jump.

Richard Metzger: What happens if the Paulson-Bernanke bailout and the best laid plans of the G8, um, don't work? What happens if housing prices still continue to drop and financial assets keep declining? And what happens when banks won't lend to anyone and there just aren't as many people anxious to sign up for mortgage debt in the middle of an economic downturn anyway? Are we all just fucking doomed? Dr. Housing Bubble: This has turned from a Paulson-Bernanke bailout into a global concerted effort to stabilize other countries as well. The Euro-zone and many of the BRIC countries were benefitting on the prospect that somehow a collapse in the United States will somehow leave the world unaffected. This idea of decoupling -- that is, the U.S. failing while other countries thrived -- seemed far-fetched from the beginning because places like Europe actually have countries with bigger asset bubbles than the U.S. I know, hard to believe but true. That is why you have seen an across the board correction on a global scale. China, Japan, Germany, Russia, and the U.S. for example have seen massive corrections in their stock markets.

At this point, the assumption is that this has to work. Yet there are many conflicting goals here. Are they seeking to unfreeze the credit markets or put a bottom on housing prices? What about maintaining lending standards yet increasing credit? These may be diametrically opposed. For example, say a bank now has capital to lend but the U.S. employment scene is getting worse. Who will you lend to?

In addition, the notion of protecting home prices is absurd. That is the reason we got into this bubble. Home prices exploding. The market will determine what a home price should go for. For example, in Los Angeles County we had a median household income of $50,000 yet at the peak, the median price hit $550,000. How did this make any sense? Even now with a median home price of $380,000 this may be out of reach for many. Historically home prices reflect local household incomes on a 3 or 4 times ratio. That is, if an area household income is $80,000 a median home price of $320,000 would seem reasonable. 

Ironically trying to prop home prices up is going to hurt more people from becoming homeowners. Banks are going to have a challenge maintaining lending standards while finding a bulk of qualified buyers to create a sufficient market to move the glut of homes on the market. And if this doesn’t work, I’m sure they will try something else since we are in uncharted territory and clearly the staunch market fundamentalists have now been proven wrong. Let the market do its thing is easier said when you don’t have to look at your investment portfolio get creamed. Of course most of the middle class will benefit little from this. 

Richard Metzger: Despite the market jumping 936 points on Monday, this whole mess doesn't seem anywhere even near the denouement...  How do you see this moment in time, are we halfway to the bottom? Where are we in the greater event cycle, mid-October 2008?

Dr. Housing Bubble: I think as a nation we are halfway through this mess. Some countries like England, Spain, and Australia may be a year or so behind us in their asset bubbles. We still haven’t seen how the credit default swap market is going to play out. We got a glimpse with the Lehman Brothers auction but that event was lost on most since the markets were collapsing at the time. The details of the current plan seem to be allocating a large portion of the capital to nine of the bigger banks. What of the other 8,000+ with many that are still filled with toxic assets? That is yet to be seen. During the S & L crisis we saw 747 institutions fail. So far this year, we have only seen 15.

In certain markets like California, we may be 2 to 3 years away from any bottom in housing prices. For example, the futures market for the LA-OC area are pricing in a bottom in for the middle of 2011. 

Richard Metzger: How will history, do you think, view this bailout in retrospect?

Dr. Housing Bubble: That is a hard question but we can rest assured that it will be a pivotal point. What seemed to be a gigantic $700 billion U.S. bailout has turned out to be a multi-trillion dollar global bailout with many countries trying to calm their own markets. As of this week, it seems like the credit markets are responding somewhat to the colossal action taken. It is yet to be seen if this will trickle down and spur consumption and credit once again.

Let us not forget that consumption is roughly 70% of our nation’s economy. We are creatures that spend. With equity disappearing and many credit card companies locking credit or even lowering credit limits in a time when people “need” access to money, will only force people to buckle up. This will not avoid a massive correction. That is baked in. This major effort was to keep us from going into Mad Max territory. 

Richard Metzger: What do you think the lay of the land (generally speaking) will look like in a year? In five years? Ten?

Dr. Housing Bubble: You know that question is highly dependent on how this massive infusion of money by the world central banks is going to play out. I think in one year we are still going to see housing prices come down. I think that is rather unavoidable given the magnitude of the housing bubble. In five years it is hard to imagine us spending like we once did at the peak during this credit bubble decade. In five years I still see housing prices lower. Japan did similar things after the bust of its real estate bubble and they experienced their lost decade which is still going on. They essentially propped up failing banks that should have failed and created zombie institutions that slumped along for years dragging down the overall economy.

Think about what was initially proposed by Paulson. He wanted to buy toxic assets from lenders who made irresponsible loans. How was this going to help out the nation as opposed to select lenders? That is why over the weekend, we have shifted from this policy to a more direct approach of capitalizing the biggest and healthiest banks in our country. That makes at least a bit more sense to most Americans. There are still proposal on how to deal with toxic assets which we will need to watch carefully because this is where the big money is going to be lost. 

Richard Metzger: How will this depression differ from the Great Depression? What are the mitigating factors that could make it a) not as bad as or b) much worse than what happened in the 1930s?

Dr. Housing Bubble: Well it is rather apparent that we have a much more active central bank. Bernanke is an expert with the Great Depression and his philosophy would guide us to believe that he will do everything he can to avoid it. The question is, can we actually avoid a major correction? Many throw around the “Helicopter Ben” nickname since many believe he will start dropping dollars before allowing any deflationary environment to take hold. 

In the best case scenario, we inflate our way out of this mess over a few years. Deflation would wreck havoc on a world economy with so much debt on the books. Why? Well look at what is happening with housing. A bank may have a mortgage that has a face value of $500,000 on a home that is now appraising at $300,000. The debt doesn’t move with the actual price of the home creating a problem for both the owner and the bank should trouble arise. And for the most part this is what has popped the bubble. After all, if that home inflated to $550,000 and you were in trouble, all you needed to do was sell it. That is how the decade housing bubble got pushed along. 

The Great Depression also had the U.S. as a creditor nation. Most of Europe was still recovering from World War I during the 20s so we actually were in a better position to lend and adjust balance sheets. This time, we are a big debtor nation. Look at our national debt that is blasted through the $10 trillion mark and is twice as high since 2000. This is frankly unsustainable. I think a better model would be something to what Japan faced in their lost decade. Each crisis is different but we are at least guaranteed a severe recession. The only question that remains is will these actions avoid a global depression. 

Richard Metzger: The so called FIRE economy is scaling down drastically. You've written that since 2000 nearly 30% of job creation has been related to real estate, including construction jobs, real estate agents, Home Depot, mortgage brokers, insurance brokers, stock brokers and investment bankers, etc. Those jobs have vanished and will not be returning anytime soon. How will these workers be reabsorbed into the work force?

Dr. Housing Bubble: Lately I’ve been paying attention to local community college enrollments here in California since I think this is a quick indicator of how people will retool. We are seeing major jumps in healthcare training in jobs such as nursing, dental hygienist, and x-ray technicians. Relatively well paying jobs with only 2 years of training. The problem as many know, California is royally in the hole and community colleges here in the state are highly subsidized. In fact, all it would cost you is $20 a unit to go to school here. The best bargain around. Given the economy enrollments are skyrocketing and many are not being able to get into these programs. That is the balance that many states will face. How are we going to retrain the workforce when many states are royally in the hole?

In addition, such a large part of our economy is based on this industry that it will not filter out in 1 or 2 years. Other areas that are growing are engineering – certainly if we have a big work creation program in alternative energy – and also in accounting. When I say accounting I do not mean finance. Accountants with the ability to understand international standards, auditors, and tax professionals (hey the government is going to get theirs since these times are tough) are probably areas which will see growth.

Yet these fields require 2 to 4 years of training. An agent here in California needs only a G.E.D. to take the test. Think about the additional retraining needed here. After the tech bust, you had a fleet of people with bachelor degrees in computer programming / science who were easily absorbed into sales and the FIRE economy. These few job fields require additional educational training which will cost the economy money. Money that is getting allocated to bailing out Wall Street firms and other institutions. We are going to need to make hard choices in our philosophy of what we view as crucial and critical to the sustainability of our country. 

Richard Metzger: If there is a very serious and protracted economic depression, it seems that certain other job descriptions -- ones which have nothing to do with the FIRE economy -- will also be lost. For well over a decade, America's main driver of economic growth has tended towards borrowing and debt -- and usury for that matter -- and because we hardly manufacture anything anymore, can the nation survive by purveying products like ESPN, Pinkberry and "Gossip Girl" in the world marketplace? If not, what'll we do?!?! It's not like anyone wants our cars anymore!

Dr. Housing Bubble: Precisely. The FIRE economy logically will see the biggest hits. But you will also see major declines in other ancillary industries. I think a rather clear indication of this is looking at Best Buy and the Family Dollar Store. Year to date Best Buy is down 47% while Family Dollar Stores are up 30%. People are shifting from “want” based items to “need” based items. That is also a reason Wal-Mart is up 14% on the year while the overall market even with the massive bounce rally is still down nearly 30% for the year. The consumption economy is going to face some major changes. I think we are going to see a major trend to frugality based items and cultural ways of living. 

Richard Metzger: What professions seem safest to you? Which lines (FIRE-related jobs aside for a moment) of work do you see as the most vulnerable moving forward?

As I previously noted, I think healthcare and engineering fields have good growth potential. We have an aging baby boomer population which almost guarantees a customer base for the foreseeable future. If we get on with major government spending in alternative energies, engineers will be in high demand as well. I think the lucrative high paying finance jobs are going to be far and few for those looking for that brass ring. I think a similarity we can draw from the Great Depression is the shift of power from Wall Street to Washington D.C. We are seeing the seeds of that already. Fannie Mae and Freddie Mac are now for all practical matters, nationalized. We now have a large stake with A.I.G. This equity sharing plan with the banks? A partial nationalization. What we are seeing is a quick shift of power. Make no mistake. When the dust settles there will be new and stronger regulations and once again you’ll see the pendulum swing to D.C. 

Richard Metzger: In the Great Depression the further away from the city-centers people lived, the harder time they had finding jobs, so obviously it just made sense to move to the most population dense areas to find employment. Do you see the demographic map of America changing over the next decade as parts of the population migrate to different regions looking for work? What parts of the country do you see doing better off than others? Where do you plan to be and what are your own plans for riding out the shitstorm that is about to strike?

Dr. Housing Bubble: I think areas that had major bubbles like California and Florida are going to have very difficult times adjusting. Many of these states depended heavily on a healthy and bubbly housing market and projected (incorrectly) that this would go on forever. Of course it wasn’t but that is the way they plan out their year. That is why already in California we are facing a projected short fall. The budget just passed a few days ago after a record long stalemate. 

I think even if we move toward alternative energy that is years away. Oil demand even as it falls is still here with us. Areas in the mid-west with low housing prices and good paying oil related jobs may see mini boom markets.

I am sticking it out in California. Born and raised here. Really can’t see myself anywhere else in this country. This is where my friends and family are. I think the pressure for many working professionals is how can someone own a home in such an expensive area? I think that is why there is so much anger toward the bailout plan. Whenever I get that pressure loaded question of, “do you ever plan to buy?” I always say, “I already own property. Just not here in the state.” There is a cultural pressure to buy a home whether for family reasons or subtle cultural cues that if you don’t own a home, you are like a nomad. For the past few years, I’ve enjoyed the benefits of leasing in an area of my choosing while owning rental property out of state. I won’t say this is the path for most since it does take time and I won’t be like an infomercial and say, “you can make $50,000 by simply flipping this place!” Many were mistaking luck with actual investing skill. Like hitting blackjack three times in a row in Las Vegas. 

Richard Metzger: Do you think that there are going to be any economic surprises revealed by the Bush administration as they walk out the door?

Dr. Housing Bubble: Of course. The entire decade has been one big jack in the box surprise. Here we have the staunchest of the free market fundamentalists who derided regulation getting the comeuppance of their own philosophy. In fact, even in the early stages of the formation of the bailout bill you still saw this desire to keep things privatized. It was the ultimate form of crony capitalism. That is, "we’ll socialize your losses and privatize your profits." You can’t do that without compromising your actual belief. This is 26+ years in the making here. This is simply the logical extension of the crony capitalistic wild west. The market simply followed the lead of the government. Why look at your income or any down payment? Who cares! Free market for everyone. Since all this was operating in the actual free market fundamentalist system and was working, it simply reinforced their belief and on and on it went.

The envelope kept getting pushed. Sub-prime, interest only, and pay option ARMs were all manifestation of the Wild West view that was flying around. I think most logical people realize that extreme free market views are wrong just as staunch socialist views are wrong. They suffer from a principal-agent problem. Lenders who were supposed to serve a fiduciary responsibility to borrowers didn’t care since the loan wasn’t going to be in their hands after a day or so. They simply were driven by the fee. The fee structure was setup in a way to create a Ponzi scheme. Some of what people are calling a credit freeze is simply the market returning to more historical and standard loan practices. 

Richard Metzger: Between now and the end of the month... any predictions?

Dr. Housing Bubble: The California housing market will continue to face pain. Things will heat up in the Presidential race but the economy will drown out most of the political rhetoric. A new law signed by the Governator will require lenders to try a little bit harder with borrowers to avoid foreclosure. This will cause the foreclosure data to appear as a big improvement which it is not. It is simply delaying the inevitable for a few more months. 

Richard Metzger: What is the most comforting thing you could say to someone who is freaking out about the future reading this very interview???

Dr. Housing Bubble: As a nation we have been through tougher ordeals. World War I, World War II, the Great Depression, and the Civil War. We have come out stronger and better when we focus on what binds us together, not what keeps us apart. We need to accept the brutal reality that things will be tough for a few years. But if we follow what the fear mongers tell us, things will actually be worse. This is a time to think with a clear head and think about what we really want from ourselves and our country. We have a very crucial election coming up so go out there and vote.

If you are a future buyer work on keeping your finances in check and you may actually be able to afford a home without putting yourself into massive debt. Ultimately what most fear right now is instability and I can understand that. Keep yourself healthy (both mentally and physically), spend time with those you care about, and remember that we will come out of this but it is important to figure out how we want our future to look. If we make moves out of fear, our future will reflect action taken in fear. If we make logical decisions and follow courses of action based on clear thinking, we will have a better chance of improving our current situation. It really is up to us and that should make anyone feel empowered.

(Richard Metzger is guest blogger.)


  1. Here we have the staunchest of the free market fundamentalist who derided regulation getting the comeuppance of their own philosophy. In fact, even in the early stages of the formation of the bailout bill you still saw this desire to keep things privatized. It was the ultimate form of crony capitalism. That is, we’ll socialize your losses and privative your profits. You can’t do that without compromising your actual belief. This is 26+ years in the making here. This is simply the logical extension of the crony capitalistic wild west. The market simply followed the lead of the government. Why look at your income or any down payment? Who cares! Free market for everyone.

    Small voice, crying in the wilderness: “Government-backed mortgage lending, which is what we have in this country, is nothing that even remotely resembles a ‘free market.'”

  2. I see Richard learned some HTML pretty darn pronto. Good.

    As to Dr Housing Bubble, excellent comments. People like him, and really, there are many that have written about this over the years, put the lie on the much louder pundits and journalists who spend their time parroting back BS spouted by politicians and influential crooks of many stripes. It is no big mystery that the most phenomenal real estate bubble of the past half century (at least) caused huge damage when it popped, especially when it was helped along with all manner of deranged financing.

    I too am a leaser, though I don’t own property anywhere. For a lot less money and risk, I can live in a far better neighborhood than I can buy into. Dumping my money into a black hole? Owning your house is far from a sure bet in the medium and long term. There is a large variety of good and bad possible outcomes.

    I agree with the notion that home prices are dropping towards more realistic levels, although I don’t see them coming down to anything reasonable in coastal California anytime soon. Today’s million-dollar homes in the SF bay area should really be back in the $300-400K range (in many cases even less), but that would be cataclysmic for current property- and mortgage-owners.

    I also agree with the oft-repeated meme that those who were too stupid to avoid taking on laughably unrealistic mortgages are now clamoring to be rewarded for their idiocy. Those of us who were more prudent, will receive nothing.

    Both McCain and Obama are pandering to the weepy violins of the electorate by claiming that it is worthwhile to save these people from losing their homes. These people would be far better off if they lost them. They would immediately become renters, and their monthly housing costs would drop significantly. They could declare bankruptcy, and their finances would recover over the following few years. The foreclosed house would be auctioned off, and money would be lost by whoever was stupid enough to buy the securitized loans. They, too, should go bankrupt, and FDIC or some other agency should seize their assets and auction them off.

    The costs should be borne by those who took the greatest risks, not by those of us who had nothing to do with it. I resent the meme that is going around claiming that we all somehow share the blame. Wrong. Not all of us were in the game.

    I could go on, but won’t.

  3. In many cases countries don’t come out from these ordeals stronger and better. More commonly they come out with less freedoms and quite a few people dead from war, disease, and starvation. I think we have the potential to come out stronger and better, but there’s no guarantee that hardship will lead to these things. It depends on wise choices by good stewards in positions of power. We don’t have good stewards in positions of power, and I see no evidence we’ll be getting any in the next election.

    Be prepared for more interference in your personal life in the name of “economic stability”, much like the PATRIOT act was passed in the name of “security”. Be prepared for more dog-and-pony shows to distract the populace, and pray that none of them take the form of war. Be prepared to have your wealth – or what remains of it – to be transferred to those with political pull.

  4. I’ve been very keenly following events and relating it to the historical context of these events. My view is that usury, this mortgage business, as a means of regulating money supply to keep pace with the overall level of economic activity has been well and truly proven over and over in the last 100 years or so to be ineffective.

    My view is that this is because it places the power to create arbitrary amounts of leverage on money, as it is the Federal Reserve Bank only has to hold 10% of it’s money in actual currency, in the hands of people who are in love with money and the power it gives them, and who are inevitably going to push the profit margin up until the disparity between real value and market price becomes over-stretched and is then forced to spring back usually at least as far below the real value as it was pushed above it.

    As this guy’s articles say, the price of property is at the root of this issue, and banks have been encouraging property speculation with easier loans, which drives up prices through increased demand and increased amounts of money flowing into that segment of the economy. Eventually a point comes where too many people are defaulting or paying off the loans slower and more inconsistently, which then lead to people attempting to exploit this supply of bad debts to create whitewashed shiny bonds with overly optimistic growth potentials.

    I personally think that the system needs to change.

    Barter gave way to currency, which enabled the the greater utilisation of resources (in droughts enabling importation and in gluts enabling the development of secondary products from surplus) and improving an economy’s resilience to fluctuations of supply and demand for goods and services. Currency, usually made from a relatively scarce but not rare material, however, suffers from the problem of supply fluctuations that it helped solve in the rest of economies, resulting in droughts and gluts of currency supply, which can have extremely detrimental effects, and can be artificially caused by the producers of the currency base material slowing down production or speeding it up, aggressively exploiting new sources or sitting on them in order to inflate the value of the resource.

    Currency eventually gave way to paper money with the appearance of the first banks, it took some several thousand years, but around the 1600s the people who were in the business of protecting people’s gold and other precious items started issuing certificates to redeem the gold, and not long afterwards governments stepped in and regulated the banking business, spawning the legal industry through the use of contracts (a gold redemption certificate is a contract promised to the bearer to exchange the certificate for gold). Unlike commodified currency value bearers, paper money has virtually unlimited supply potential and brings up the problem of the rate of issue of new currency.

    Until the middle of the 20th century paper currency remained as a certificate of value exchangeable with gold. At the same time as the certificates appeared, bankers, who had been illegally offering interest attracting loans (Christian nations all had laws against usury) had their shady business legitimised around the same time as gold certificates became common, and regulation had to be put in place to rein in the greed factor for this business of lending that resulted inevitably in drastic fluctuations of money supply periodically causing discontent in the populace and often resulting in kings being assasinated, since government is all about reining in the human tendency to escalate deception and theft the longer it is not prosecuted.

    Centralising the banking system didn’t ultimately work, however, because the greedy big players at the top prefer to be in control than have national governments dictate to them, and in the early 20th century all national central banks were signed into private hands, along with the reserve banking system, which, rather than meaning banks must hold surpluses of currency above the amount on the books as loans, that they can loan 10x as much money as they actually have in their vaults, and the large majority of the 90% of money existing only on a ledger is in mortgages, which usually do not ever have to be converted to cash except through the process of repayment.

    This money is not real money. The IMF operates the same way as the fed, which operates the same way as the smaller banks down the line. The IMF and world bank, essentially, are in control of money supply, and has ultimate control over everyone’s money. We are expected to trust them with regulating the issuance of new money, they are supposed to maintain inflation within a narrow range but even though the international central bank may be operating relatively effective regulation of inflation, every single lender it supplies loans to down the line tacks on it’s own margins, and tries to find ways to get more people in debt to them and paying the money back.

    So we are back at square one with a commodified currency system, albeit intangible, where instead of the weather determining the annual production it is in the hands of the community of usurers whose primary motivation is profit, who gain from fluctuating supply deliberately, as when some major segment of the economy bubbles way out of scale with real value, the rates of foreclosure rise and firstly, banks get full title to the land of lenders who were unable to bear the repayments, and when the prices bottom out, usually underpriced due to the climate of fear, the big players snap up these bargains and further strengthen their position.

    My personal view is that the solution is to eliminate human control of money supply and instead institute a fixed inflation rate that is given to all instead of funnelled into the banks via the asymmetric transaction called a loan (all forms of property crime are asymmetric transactions, one should note). Such an economic system would be free of the problems caused by supply and demand fluctuations and the temptation to arbitrage and speculate upon inflation in the form of usury. It could eliminate the need for welfare systems as everyone’s accounts would grow at a fixed linear rate which would be sufficient for an averagely skilled person to survive without actually doing any work. It would also smooth out production growth curves by limiting economic growth to the fixed rate.

    Some time ago I read an article in a local paper about the prices of housing in 1901 in Australia compared to today. A three bedroom house on a 1/8th-1/4 acre in 1901 had an average rental rate of around AUD$65/wk in today’s money, which is in stark contrast to current prices, which are more like 300-400/wk. I don’t know what the inflation was like back in 1901, nor whether the demand for property was up or down on the average of the years before and after, but that still sounds to me like during the 20th century the bank loan/mortgage system has pushed property prices up almost by a factor of 6. If property was priced at 1/6th of current prices most people would be able to buy them outright, or pay them off in 5-10 years rather than 25 years.

    Regarding the theory of locking money supply to a set rate, this does not mean that the amount of money in an economy grows at a fixed rate – instead, it grows at the rate of growth of account holders, indexing inflation directly against population. Since an economy basically is the collective output of all of the members participating in it, the rate of inflation should be fixed against population growth rates.

    Usury is the wrong answer to the question of money supply. It is inevitably going to be made illegal again when it brings the human race to the brink of extinction in high tech warfare and technologically enhanced fascism. Nobody is in control of the economy really, because there’s so many people in the banking system and they all have differing opinions about margin levels and what level of inflation is ok and what is not and the fads of fiscal policy.

    Alternative currencies are springing up all over the place as discontent with the banking system continues to grow. It is only my opinion that a fixed growth rate applied to all accounts in an economy eliminates the ‘business cycle’ as it has not been used in a real economy anywhere. However, I feel that the logic of tying money supply to population levels is self-evident and I hope that the idea gains at least enough currency to be put into a simulation or better still implemented as an electronic currency system. I have a design which uses distributed networking and data redundancy, as well as cryptographic methods, and is based on the accumulation of certificates of transactions, added and subtracted from the balance growth that dates back to the initial opening of an account.

    I should add the disclaimer that I am pretty much libertarian in my political leanings, and I would like to see governments, taxation, the banking system and standing armies abolished. It is my view that the dominant political forces (backed up by military force) are no different from each other in one very important aspect – they believe that intervention and interference is how you solve problems, in other words, by force, hence the use of that word and it’s synonyms in the legal systems and even the names of their organisational units.

    I believe that problems are solved by the natural forces within a system being allowed to operate unimpeded, and I have plenty to back up that view in the form of the simple fact that we are even sitting here now at all – simple laws of economy operate in all levels of the ecology around us – and that it was this, the combination of fluctuating supply and demand of space, building materials, food and water, combined with the need to innovate driven by neccessity, this way of doing things has such a long track record that anyone who thinks that these mainstream systems of manipulating people to fit into ideas rather than the obverse, is just a short early stage in human development that is about to end.

    it’s understandable that we got so full of ourselves being so clever compared to the world around us that we could make tools and change the world in ways that no previous organism could. The ecology created by the combination of human brains and digital computation and networking is far more fluid and adaptable than any physical ecology, and eventually will prove to be the undoing of the systems of control. Just like how a world dominated by reptiles dependent on external heat sources gave way to warm blooded animals when things cooled down, the landscape of the human ecology is becoming increasingly unfavourable for the dinosaurs of centralisation and hierachic organisation, and increasingly favourable for a much more fluid and interconnected system that exploits equilibrium rather than trying to dictate to equilbrium what the middle point should be.

  5. Once upon a time those who promised bread and circuses had to provide actual bread and circuses!

    The business cycle:
    real estate bubble +10 years
    other stuff bubble +10 years
    repeat ad nauseum

    Well thought-out libertarianism, but how do you propose the sh*t-work get done, or even long-distance roads?

  6. I’m not quite following that, Elfspice, could you explain it one more time, but a little bit more indepth?

    1. I’m not quite following that, Elfspice, could you explain it one more time, but a little bit more indepth?

      Just be glad that it wasn’t Entspice. He’d still be introducing himself.

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