Saturday, August 27, 2016

What's Been Cooking at Our House? Summer 2016

It's better, cheaper and healthier to just make what you want to eat at home.
One of the core concepts here at oftwominds.com is control what you can. We can't control very much of the world around us, but we can control what we put in our bodies, what fitness we provide our bodies and what thoughts we feed our minds.
As to what food we prepare and put in our bodies: what's been cooking at your house? Here's a semi-random selection of photos of things that have been prepared in our kitchen or gifted to our table by good friends.
Let's start with the healthy stuff and then move to the baked goodies. Here's a salad that is mostly greens from our garden. Note the purslane on top, which "contains more omega-3 fatty acids (alpha-linolenic acid in particular) than any other leafy vegetable plant." Purslane typically grows on its own as a volunteer-- before we knew its health/taste benefits, we pulled it out as a weed (dumb--it's a nutritional powerhouse!).
Art that you can eat! Incredible vegetarian spring rolls, courtesy of our good friends:
Musubi (also known as onigiri) with a piece of fried ono (a type of fish) with stir-fried zucchini and green beans from our garden:
Ulua (a type of fish in Hawaii) sashimi with a Lagunitas IPA beer. Onolicious! (The ulua came from a relative who caught it, and we reciprocated with an ohelo-apple pie--see below.)
The baked goods section starts with collecting (legally) wild ohelo berries.
The ohelo berries being mixed into raw sliced apples.
The mouth-watering result: ohelo-apple pie, with a scoop of ice cream:
When fresh cherries were in season early in the summer, I made a number of clafoutis (claw-foo-tee) to bring to parties and pot-lucks. I love this baked custard dessert because it looks impressive but is easy to prepare:
Our good friend Katharine K. conjured up this amazing homemade strawberry shortcake for a dinner party at our house:
And as a bonus to a family meal shared in Honolulu: a full late-afternoon rainbow:
Many of the things we like to eat are not available elsewhere at any price; no store or bistro makes spring rolls or pies like this on a regular basis. Maybe some $100-per-person restaurant makes an approximation of these dishes from time to time, but who has the time or money to go searching for what may well be inferior to the homemade version?
It's better, cheaper and healthier to just make what you want to eat at home, and give any surplus to those who gift you wonderful ingredients, dishes and treats.


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Thursday, August 25, 2016

China's Great Divide: A New Cultural Revolution?

The only question left for China (and every other debt/bubble-dependent nation) is what socio-political consequences will manifest when the credit bubble finally bursts?
In Asia, it's generally seen as unpatriotic to criticize one's country in public, even if you disagree with its direction and leadership. The cultural norm is to maintain the "face" of one's country by hiding its ills from outsiders.
This reticence is especially evident in China, which suffers from the memory of being subjugated by the Western imperialist powers in the late 19th century and early 20th century.
As a general rule, you will rarely hear any profound criticism of China unless you are considered a trusted friend; giving China a black eye in public is frowned upon, even by its domestic critics.
For this reason, the majority of the Western media has very little grasp of what worries Chinese people. Recently, I have heard fears of a Second Cultural Revolution being expressed in private.
There is a Great Divide between generations in China: on the one side is the older generation that remembers the Maoist era with some nostalgia and the terrible adversities of the Cultural Revolution (1966 - 1976). On the other side is the young educated, prosperous generation which has only known consumerist prosperity and personal advancement.
The ideals of the old communes are an abstraction to the young generation, as are the terrible costs of the Cultural Revolution.
A resurgence of devotion to Mao has caught authorities off-guard; they can't very well suppress public displays of secular worship of the Party's founder, but raising Mao's revolutionary ideals from the dustbin of history implicitly challenges the Party's current leadership.
The older generation resents the young consumer-obsessed generation, and some would like to purge China of the excesses of wealth and consumerism.
It's not too difficult to see how rising unemployment (China's Hidden Unemployment Rate) and China's enormous wealth inequality could spark a new Cultural Revolution that would target Party leaders who have benefited from the state-managed neoliberal capitalism that has greatly enriched the leaders and their family dynasties.
In effect, a return to the party's Maoist roots would open divisive fissures in the Party and the nation. Farfetched? Perhaps not as much as the conventional sugar-coated media representation would suggest.
The status quo solution (in China, the U.S., Japan, the E.U., etc. etc.) to a weakening bubble-dependent economy is to inflate another even bigger bubble.If debt reached extremes that imploded, the solution is to expand debt far beyond the levels that triggered the implosion.
If fudging the numbers triggered a loss of confidence, the solution is to fudge the numbers even more, so they no longer reflect reality at all.
If the masses protest their powerlessness, the solution is to push them further from the centers of power.
And so on.
This blowing new bubbles to replace the ones that popped works for a while, but at the expense of systemic stability. Each new bubble requires pushing the system to new extremes that increase the risk of instability and collapse.
In other words, the stability of the new bubble is temporary and thus illusory.
The processes used to inflate the new bubble suffer from diminishing returns.The nature of stimulus-response is that overuse of the stimulus leads to diminishing responses. This is a structural feature that cannot be massaged away.
Goosing public confidence in the status quo with phony statistics and rigged markets works splendidly the first time, less so the second time, and barely at all the third time. Why is this so? The distance between reality and the bubble construct is now so great that the disconnection from reality is self-evident to anyone not marveling at the finery of the Emperor's non-existent clothing.
The system habituates to the higher stimulus. If the drug/debt has lost its effectiveness, a higher dose is needed. This is the progression of serial bubbles. Then the system habituates to the higher dose/debt, and the next expansion of debt must be even greater.
This dynamic can be visualized as The Rising Wedge Model of Breakdown, which builds on the well-known Ratchet Effect: the system is greased for easy expansion of debt, leverage, employees, etc., but it has no mechanism to allow contraction. Any contraction triggers systemic collapse.
The only question left for China (and every other debt/bubble-dependent nation) is what socio-political consequences will manifest when the credit bubble finally bursts?
The answer will arise from the unique interplay of history, social norms and central-state actions in each nation-state as the crisis deepens. In China, the two revolutions--the Communist victory of 1949 and the now-suppressed Cultural Revolution of 1966 - 1976-- will both loom large--perhaps far larger than the current regime would like.
This essay was drawn from Musings Report 28. The Musings Reports are emailed weekly to subscribers ($5/month) and major contributors ($50+ annually). If you'd like to support this blog, please consider subscribing (links below or in the right sidebar).


My new book is #9 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

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Wednesday, August 24, 2016

What Can We Say About a System that Criminalizes a Safe Painkiller (0 Deaths) and Promotes Big Pharma Opiates that Have Killed 165,000 Americans?

So when will the citizens wake up to the criminality of their government in favoring killer corporate opiates over safe natural painkillers?
Set your mindset to objective and come with me to the little-known but plucky nation of Lower Slobovia. The residents of Lower Slobovia have two choices when they are suffering from chronic pain:
1. A natural, non-addictive medication that they can grow themselves that has never caused a single fatality due to overdose, adverse reactions or mixing with other drugs (polypharmacy), or
2. synthetic opiates manufactured by pharmaceutical corporations that are highly addictive, trigger multiple adverse reactions, manifest dangerous polypharmaceutical attributes and have killed over 165,000 people in the past 15 years-- 28 times the nation's 5,790 combat deaths in recent military conflicts.
The corporations manufacturing and distributing the synthetic opiates as "safe" hid the truth about their medications from doctors, patients and the media: 'You Want a Description of Hell?' Oxycontin's 12-Hour Problem (via John F.) OxyContin’s stunning success masked a fundamental problem: The drug wears off hours early in many people, a Los Angeles Times investigation found. OxyContin is a chemical cousin of heroin, and when it doesn’t last, patients can experience excruciating symptoms of withdrawal, including an intense craving for the drug.
So take a guess which class of drugs is perfectly legal and widely promoted by Lower Slobovia's healthcare system, and which one is classified as a restricted Schedule 1 drug by the nation's Drug Enforcement Agency (DEA), i.e. as dangerous as heroin?
I suspect you saw this coming, right? The natural painkiller that never killed a single soul and can be grown at home is criminalized, while the drugs that have already killed 165,000 people (a number that grossly understates the total number of deaths at least partly attributable to synthetic opiates) and addicted and/or harmed millions of other users is perfectly legal, declared "safe" by the pushers (oops, I mean pharmaceutical manufacturers) and the government, and distributed in the tens of millions of doses by the "healthcare" system.
Lower Slobovia's DEA, the corporate manufacturers of the killer-opiates and its healthcare system that slavishly distributes millions of the killer pills should be immediately escorted to Devil's Island and left to rot, right? And the insane laws reversed so the killer corporate synthetic opiates are declared Schedule 1 and heavily criminalized, and the natural nobody-dies painkiller legalized and distributed, right?
Isn't this obvious? Yes, I realize cannabis and opiates are not apples to apples, but you get the point--the drugs that have killed more than 165,000 people and ruined the lives of hundreds of thousands of others should be on Lower Slobovia DEA's Schedule 1 of criminalized drugs instead of being passed out like candy by its "healthcare" system-- a distribtion that has reaped tens of billions of dollars in sales and profits for the pharmaceutical sector.
If you need some official statement to accept the obvious, well then, here you go: Could Medical Cannabis Break the Painkiller Epidemic? (Scientific American, September 2016 issue) A body of research suggests yes, but scientists are having to fight red tape to study whether medical marijuana could substitute for opioid drugs.
The U.S. “is in the midst of an unprecedented opioid epidemic,” according to the Department of Health and Human Services. Prescription opioid overdoses killed more than 165,000 Americans between 1999 and 2014, and the health and social costs of abusing such drugs are estimated to be as much as $55 billion a year. The problem has led experts to scramble for a less dangerous alternative for pain relie--and some research points to medical marijuana.
Published in 2014, the study revealed an intriguing trend: between 1999 and 2010, states that permitted medical marijuana had an average of almost 25 percent fewer opioid overdose deaths each year than states where cannabis remained illegal.
So when will the citizens of Lower Slobovia wake up to the criminality of their government in favoring killer corporate opiates over safe natural painkillers, the criminality of the pharmaceutical racketeers who hid the truth from doctors and patients, and the complicity of a "healthcare" industry that has been happy to pass out deadly drugs like candy--at a profit, of course.
As you might have guessed, there is no Lower Slobovia. There is only the U.S.A., a nation "in the midst of an unprecedented opioid epidemic,” a nation blind to the lethality of its Destruction Enforcement Agency (DEA), its corporate pushers and its government-funded and enforced "healthcare" system.
Disclosure: I am not a user of either recreational or medicinal cannabis or any corporate opiate. I just think it's time we finally confront the terrible, needless cost in human lives and suffering from our nation's insane, benighted drug laws and our needlessly costly, destructive but oh-so-profitable "healthcare" system.


My new book is #9 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

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Tuesday, August 23, 2016

The Stock Market 2015-2016: Ugly Chopfest with an Equally Ugly Megaphone

There's something fishy about this "new all-time highs" rally of 2016.
It's interesting to take a longer-term view of the S&P 500 (SPX). Looking at a 10-year chart, the decline from almost 1,600 to 667 in the Global Financial Meltdown of 2007-2009 doesn't look like that big a deal, given the incredible 6-year uptrend since March 2009.
The boost phase of the rally lasted over 2 years, from 3/09 to 6/11, when the Greek debt crisis caused a temporary swoon in global markets.
Once central banks rescued markets (again), the rally resumed, but beneath the trend line.
This rally ran out of steam in early 2015. The marginal new highs in May 2015 and July-August 2016 are not even visible on this chart.
What is visible is a giant megaphone pattern that targets the old all-time high from 2007 around 1,600. A 600-point drop from 2,200 to 1,600 is of course "impossible" due to the Yellen/Kuroda/Draghi Put, i.e. central banks will buy "whatever it takes" to keep markets elevated forever.
Despite the visible "impossibility" of the SPX ever declining 600 points, that's what the pattern targets.
Even the casual observer is struck by the market's wild yo-yo'ing since early 2015--rather than trace out a definable uptrend, it's been a chopfest of dizzying declines and furious rallies.
This is not characteristic of a powerful Bull market. Rather, it is evidence of a Bull market faltering, eroding and being saved by increasingly outsized and visibly desperate central bank interventions.
$180 billion a month of additional stimulus is now required from the major central banks to keep the market afloat. Yet the returns continue to diminish.
What we have is a Red Queen's Market. The Red Queen's race refers to running fast just to stay in the same place. In a Red Queen's Market, central banks must continually increase their level of stimulus, intervention, jawboning, etc. just to keep the markets in the same place.
There's something fishy about this "new all-time highs" rally of 2016; the declines are deep but the new highs are modest. This is a tired Bull, and a spear tossed from somewhere in the restive crowd could bring it down all too easily.

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Monday, August 22, 2016

What Are the Odds that the 2020-2022 Olympics Will Be Cancelled?

It's tough to pay for an Olympics when 95% of your supposed "wealth" has vanished.
In the modern era (1896-present), the Olympics have only been cancelled in wartime: 1916 (World War I), 1940 and 1944 (World War II). But world war is not the only circumstance that could derail the Olympics; a global crisis in energy, finance or geopolitics could send the risks and costs of the Olympics beyond the reach of most participants.
The key to understanding the odds of an Olympic cancellation is Liebig’s Law of the Minimum, which states states that "growth is controlled not by the total amount of resources available, but by the scarcest resource."
As I have outlined elsewhere, the three resources that will become increasingly scarce globally going forward are:
1. Geopolitical stability
2. Energy abundance (i.e. abundant and affordable to the bottom 95%)
3. Financial/currency stability
A global scarcity of any of these three could sink the Olympics in 2020 and 2022. I've discussed the geopolitical, financial and resource risks in four recent posts:
The current confidence that everything will remain stable for years to come is based on a misleading extrapolation of current trends. Just because the global status quo has managed to maintain a facade or normalcy for the past eight years does not mean the New Normal (central banks pumping $180 billion a month into the global financial system to keep it afloat) is identical with the pre-crisis Old Normal.
Seneca's Cliff offers a more accurate model of reality: everything stays the same until it doesn't. The slide down is much faster and more abrupt than the steady advance to the cliff's edge:
The reality is the status quo has been forced to increase its interventions just to maintain the steady-state facade of normalcy. This constant increase of resources being devoted to prop up an unsustainable system is not consequence-free; the effort generates unintended consequences and increases the systemic risks.
The status quo must then ramp up its interventions and manipulations to compensate for the strains and risks breaking through the carefully managed facade of normalcy.
War is not the only possible disruptor of the 2020-2022 Olympics. Geopolitical tensions could rise to the point that boycotts effectively gut the Olympics. Global disruptions of energy (severe shortages and soaring costs) could put the Olympics out of reach for many participants--and of course these two risks are connected. Energy shortages and geopolitical conflicts go hand in hand.
A funny thing happens in a severe currency crisis: 95% of the phantom wealth suddenly disappears. The value of fiat currencies is established by a number of factors, but the primary one is demand for the currency, which is tied to participants' trust that the currency will retain its current value (or appreciate) going forward.
Once that trust is lost, the downward spiral creates panic selling.
In the current narrative, central banks can always "save the day" by printing money or opening the floodgates of unlimited credit.
The problem won't be a lack of currency or credit--the problem will be a scarcity of trustworthy collateral to back up the credit and currency. If the value of the collateral is impaired, the credit leveraged on the collateral will also be impaired.
In other words, a loss of faith in a currency cannot be reversed when faith in the central bank's magical powers has also been lost. The dramatic decline in the purchasing power of Venezuela's currency offers a modern-day example of what happens to phantom wealth in a currency crisis.
It's tough to pay for an Olympics when 95% of your supposed "wealth" has vanished. To save face, the host nation may attempt a severely truncated Olympics with a few participants and mostly empty venues, but the reality will be visible to all: it would have been better to cancel the Olympics and avoid the embarrassment of a failed show crippled by scarcities.
What are the odds that the 2020-2022 Olympics will be cancelled (or completely distrupted)? A lot higher than most people think.
Of related interest:
Jeffrey Snider: All Signs Point To Systemic Reset


My new book is #9 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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