Making Sense Out of the Great Unraveling
In 1999, I
began to form a picture in my mind of what I termed "The Great
Unraveling" a period in which the economies of the First
World would collapse. I believed that it would not all happen with
crash, but would occur in fits and starts, with the relevant
governments artificially propping up their economies as events unfolded,
with a series of band-aid solutions that would delay the inevitable,
but ultimately, would worsen the outcome considerably. Hence the
choice of the word, "unraveling."
that the first major event in this debacle would be the breaking
of the real estate bubble in the US, which I expected to happen
in 2006. I was wrong. It occurred in 2007. Since then, whenever
projecting a date for an event, I have been fairly consistently
premature by a year. (This is why economic forecasters often say,
predict a date you'll invariably end up looking like
events have taken place, largely as predicted. I believe that we
are now on the cusp of a series of major events; the most significant
and most destructive that I will see in my lifetime. These will
play out until around 2015 (Chances are I'll be wrong and the dust
will not begin to truly settle until a year or more later. For many
years, the esteemed Harry Schulz has said, "Ten years down
and ten years up." He will probably turn out to be right, as
he almost invariably is.)
of this period I had not anticipated was that, at this point, the
vast majority of people out there are still in complete confusion
as to what is happening to them. I had assumed that, once they began
to see that their governments had been pulling the wool over their
eyes for years, they would do an about-face and pursue a more accurate
understanding of their situation. This, by and large, has not happened.
people seem to be grimly hanging on to their misconceptions. In
addition, many have reaffirmed their loyalties to their political
parties and really dug in, not understanding that regardless of
party, the members of their government are not their friends and
protectors. Quite the opposite, in fact.
The other day,
someone said to me, "I should have listened to you years ago
and started studying what was on the way. I guess it's too late
to catch up now." That set me to thinking. Is it too late?
It is true that what is happening is maddeningly complex, even for
those of us who have been following developments closely for years?
While some developments are predictable, there is chronic uncertainty
as to what the governments will come up with next, since their actions
often defy logic.
must be some basic truths that can assist those who are starting
late in the game basic principles to follow that might make
it easier to grasp the true meanings of events as they unfold. Let's
give it a try, bearing in mind that adopting these principles may
not be easy.
any political party loyalty that you now have
of what country you live in, you probably have a liberal party and
a conservative party. (Many countries also have fringe parties,
such as the social democrats, communists, etc.) Regardless of what
party you favour, you may think of the major opposition party as
evil and feel that, right or wrong, you must defend your party to
the death. In truth, your party, and, by extension, your elected
representatives, most likely have no loyalty to you whatsoever;
nor do they see themselves as your representatives. They see themselves
as your masters. Regardless of their positions on the issues, this
is true, almost to a man.
in order to achieve election, they have had to cut deals with those
who make large donations to their campaigns. These people are the
politicians' true bosses and they dictate what will happen in the
future not you. You will therefore keep your head at its clearest
if you go under the understanding that none of the promises that
candidates make are necessarily true; that, regardless of what they
claim, they will hang you out to dry, as surely as will the opposition
party. While they pay you lip service, they do not take your wishes
or needs seriously and, in many cases, hold you in contempt.
and your government are two separate entities
are fond of speaking about the greatness of their country and praise
those who are most loyal to the government, implying that those
people are the true patriots. Not so. In most cases in the First
World, governments have become so corrupted that what benefits them
does not benefit the voting public. In effect, they have hijacked
the country over a period of many decades. If you feel loyalty to
your country, that's fine, but do not be fooled into thinking that
your government and your country are one and the same. They almost
assuredly are not.
in the present
This is a really
tough one; however, if you are to come out of this period with your
skin still on, it is essential. Most of us tend to say to ourselves,
"Okay, things are not as good as they were, but it's not all
that bad. I can live with it." I can't overemphasise how shortsighted
this assumption is.
millions of Jews took this position in the late 1930's in Germany.
Only a small percentage of them said, "If this is the direction
things are going in, within a few years, our lives will be ruined."
The latter group left Germany if they were able, often leaving behind
their homes and businesses, but saving their future liberty.
allow your thinking to simply be a snapshot of your situation today,
make the effort to examine the direction that events are
headed in and picture what you will need to do to keep from becoming
a victim of those events. (Of all of these principles, this one
is the most important, if you are to fare well in the coming years.)
those who are most knowledgeable in the field
In every field
of endeavor, there are many who are clawing their way to the top,
fighting amongst each other for position. This is not true of those
experts on economics who are of a libertarian bent. Invariably,
those who are at the pinnacle of their field, recognize each other's
abilities, respect them and seek to learn from them. They tend to
be known to each other and, if they don't exactly get together every
Thursday to play bridge, they do communicate with each other and
meet on occasion if possible.
In the study
of economics / politics / investment, I was fortunate to have stumbled
upon Sir John Templeton many years ago. He was clearly at the top
of his game and his record for being correct in his predictions
was extraordinary. Through him, I learned of Harry Schultz. Through
Uncle Harry, I learned of Doug Casey and so on down the line. As
I learned to respect those who had been "referred", I
learned to avoid those who were not. As a result, all those whom
I have trusted over the years have been exceptional people, both
in their analysis and perceptions, and in their willingness to tell
the truth when they shared information.
way, I also bumped into some very successful, very well-known, but
very disreputable people, but they did not come to me with "references"
from those I respected. Consequently, I kept their influence over
me at arm's length and time has shown that, had I not done so, I
would have paid a price.)
It is unlikely
that, if you are coming late to the party, you will have time to
become one of the most knowledgeable in the field. However, if you
follow this principle, you will have the opportunity to home in
on the most knowledgeable and trustworthy people and, more importantly,
avoid those who would lead you astray. Stick with those advisors
who are at the top of their game.
Go under the
assumption that the great majority of information that appears in
the media is either not quite correct, or, often completely false.
It does not matter whether you watch the liberal network or the
conservative network each has an agenda to follow and the great
majority of information on the television and in print only adds
confusion. So, where does that leave you?
The best source
for truthful information at present is the Internet. Just as in
the mainstream media, there is more utter rubbish available than
truth. However, if you were to begin with some of the names mentioned
above, you will soon branch out to more sites that will be of value.
with yourself regarding your abilities
I have been
lucky in my lifetime to have been quite talented in some areas,
while being pathetically incompetent in others. I seem to be a combination
of extremes. This led me to build confidence in myself regarding
my talents, while admitting my shortcomings.
are less extreme than me, and, as a result, assume that they should
be ashamed of themselves if they are not at least "pretty good"
at most everything. This thinking is counter-productive. Self-honesty
opens up opportunity to learn from others and to respect those who
know more than you or are more talented than you on a given subject.
While we all would like to think the best about ourselves, we can
only improve ourselves if we recognise and admit our shortcomings
to ourselves. Then we can actively pursue those who may fill in
the holes in our abilities.
I had an embarrassing
dream a couple of years ago. In the dream, I was standing at a podium,
getting ready to give a talk on the Great Unraveling. Although I
don't think I tend toward smugness, in the dream, I was looking
forward to the room filling up with people and thinking, "I'll
be the smartest man in the room tonight." Then people started
filing in and sitting down Harry Schultz, Doug Casey, Lew
Rockwell, Jim Sinclair and so on. Thankfully the dream ended there,
just as I came to the horrible realisation that I was actually the
dumbest man in the room.
The goal should
never be to be the smartest man in the room. The goal should
be to have as great an understanding of the situation as possible.
On rare occasion, I have come up with the odd point that Uncle Harry
hadn't conceived of; however, this does not change the fact that,
99% of the time, he is miles ahead of me. This doesn't mean I'm
going to go and hide in a hole in the ground, but rather that I
am going to listen to Uncle Harry each and every time he has something
to say, in the hope that some of his light will illuminate my brain.
The same is true for the others I respect on the subjects of economics,
investment and political events.
you need to be an expert
This is similar
to the principle above, but with a slight twist. I personally do
not believe that I have a talent for either economics or investment,
but I have been working on the study of both for decades and have
ended up doing well so much so that, now that so many of my predictions
(particularly regarding gold) have come to pass, I am often asked
for my opinion on what's next.
I'm quite happy
to offer my views, but, occasionally, I am introduced to someone
as an "expert" in the field, which, for my own clarity
as well as for others, I quickly correct. I am a student. Maybe
I've been doing my post-grad for more than a quarter-century, but
I am still a student, not an expert. The day I think I'm an expert
is the day I'll stop trying to learn, and I have not the slightest
doubt that that would be my undoing.
It does seem
to be the case in the western world that people somehow fear that
they will be regarded fools if they do not present themselves as
experts. All I can say is, don't fall into this trap. Your future
depends on your humility and willingness to learn.
So, in review,
abandon any sort of conception that politicians hold an answer to
your future. Recognise that your future must be created by you,
independently of their machinations. Surround yourself with the
best people (this can be done through the Internet) and have the
wisdom that, when you don't understand what they are saying, assume
that they are probably right and you are probably
wrong. Then seek out further clarification.
Do the best
you can to envision the knock-on effects of what the leaders of
the world are doing. This, as stated above, is a tough one, especially
if it has not been your habit for many years. Either way, develop
the new habit of seeking out information from those who are at the
top of their game and have the respect of their peers.
last principle to consider:
for the possibility that your newfound knowledge may alienate your
All of the
above is not only difficult, it is also socially embarrassing. As
you broaden your understanding, you will almost certainly discover
that your peers have not done the same and they will not only think
you are incorrect; but they may well see you as a threat to their
own beliefs. Be prepared to do a spring cleaning of some of your
long-held perceptions and accept that you may need to keep your
new understandings largely to yourself.
I don't often
offer biblical quotes, but here is one that has proven true for
me: "A prophet is not despised, save in his own country."
It essentially means that your friends will not be likely to appreciate
your new-found knowledge, in fact they may well think you're dangerous.
above principles will be difficult, time-consuming and, in some
ways, disheartening. However, it may mean the difference between
whether or not you exit the Great Unraveling with whatever wealth
you now have and even with your freedom. It is absolutely
Man with permission.
Thomas is British and resides in the Caribbean. The son of an economist
and historian, he learned early to be distrustful of governments
as a general principle. He began his study of economics around 1990,
learning initially from Sir John Templeton, then Harry Schulz and
Doug Casey and later others of an Austrian persuasion.
© 2011 International