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August 04, 2011

Morning-after Thoughts

Now that the waiting is over, we are seeing that the initial response to US avoidance of its politically generated debt crisis was a sharp drop in financial markets; ironically, worse overseas than here in the United States. Just how that will play out over the next several weeks or months remains to be seen but it should not come as a surprise that the obviously political (and childish) initiative of know-nothing tea party members of Congress should have provoked it. Rather, what should have been evident since (at least) 2008 was that interdependent world markets have been seriously oversold for years, if for no other reason than the almost universal failure of global media to pay close attention to the two biggest problems faced by our species: continuing growth of the human population and its failure to act on the undeniable effect of human energy consumption on our global climate. That the two problems have existed has long been obvious. Less obvious, but of more importance to the day-to-day lives of most people, were how soon and how drastically key financial markets would react to that denial.

In that connection, it is probable that there will be false rallies followed by dips before a bottom is reached; thus how does an ordinary investor with bills to pay and children to educate know when to buy or sell? It’s at moments like this that people can be badly hurt financially because doing nothing can be as expensive as buying the wrong “asset.” Furthermore, it appears that we may finally be bumping up against the fundamental questions that have intrigued cosmologists for thousands of years, with the ultimate answer most likely to be a continuation of the present uncertainty rather than any crisp explanation of who we are, where we came from, or why we are here.

A final consideration is that problems we have remained unaware of (or unwilling to face) usually turn out to be the most costly.

A drug policy related footnote is that one of the more obvious effects of the much-maligned marijuana "high" is that it allows users to be comfortable in the "now," particularly after smoking (when consumed by mouth, it's far more effective against severe physical pain). Thus today's news would seem more bullish for weed than for the war on drugs.

Doctor Tom

Posted by tjeffo at August 4, 2011 07:05 PM