Friday, February 24, 2012

Our Sky Tonight via Star Chart

This was the sky off our front porch tonight at 8:43 pm. It appears to be a majestic alignment of almost every planet, partially obstructed by the curve of the Earth. Above our horizon is a crescent Moon, along with Venus, and Jupiter. This was a special treat to behold in itself. Jennifer and I stood out in a chilly evening breeze to admire the formation in the vividly clear night sky, which prompted me to fire-up Star Chart on my iPad. This revealed a wider juxtaposition.

Below the horizon was the Sun, of course, which is the cause of the "lens-flare effect" in this view of my Star Chart app. Accompanying the Sun was a comparatively nearby Mercury with a far more distant Uranus above it (but still below the horizon looking west off my porch). Neptune was below the Sun. Mars and Saturn were the only planets missing from this view - and Pluto as well, but it is no longer considered a planet.

Of course, the alignment itself was merely our perspective. In reality all these objects were widely scattered throughout the solar system. From a strictly astronomical perspective this was only the alignment of Venus, Jupiter, and Mercury, which is actually not a rare alignment at all. But, that didn't make it any less cool.

Thursday, February 23, 2012

A bigger, fatter Now?

This interesting factoid was in yesterday's Wall Street Journal:

"If every image made and every word written from the earliest stirring of civilization to the year 2003 were converted to digital information, the total would come to five exabytes. An exabyte is one quintillion bytes, or one billion gigabytes—or just think of it as the number one followed by 18 zeros. That's a lot of digital data, but it's nothing compared with what happened from 2003 through 2010: We created five exabytes of digital information every two days. Get ready for what's coming: By next year, we'll be producing five exabytes every 10 minutes. How much information is that? The total for 2010 of 912 exabytes is the equivalent of 18 times the amount of information contained in all the books ever written. The world is not just changing, and the change is not just accelerating; the rate of the acceleration of change is itself accelerating."

As you may know I am rather fascinated with
the meta-phenomenon of acceleration. Human evolution itself is speeding up. The universe as a whole is not just expanding, it is expanding faster. Now, the rate of information (or data noise, I would think) is speeding up just like everything else.

Around my land, my family and friends, it is not uncommon for people to comment about how "hectic" life is and how no one "takes time" anymore. Everything is a rush. This is a frequent, ordinary observation in this little part of the world. I don't think it is naive for people to feel that way, it is instinctual knowledge.

Since
my self-brewed notion of karma is fundamental to my personal belief system, I would contend that it is karma that is speeding up. One thing leads to another, only now it seems to be leading to the next thing ever more quickly, or perhaps not just to one thing but to a multitude of things. Karma snowballs. Karma is the fuzzy essence that connects everything and it seems that speed and, more specifically, acceleration is a central force of existence, perhaps the primary force. Who knows?

I find myself aware of the haste of my own life; of the fact that I no longer have the time I desire to contemplate things I consider far more important than the demanding shit that eats up most of my day. What do I do with such awareness? How relevant or irrelevant is slowness in a universe of ever greater speed?

I have no answers. I only know that I keep observing this and I can't escape the notion that if the Now is perpetual and timeless, then instead of going faster (the Now goes nowhere) it is simply becoming fuller. Not necessarily richer, but perhaps a more trashed up Now. That is how the speed of change would be translated into the timeless Present Moment. Which begs the question, if the Now is filling up, how much can it take before it just pops? Or is the Now so vast and infinite that it can accommodate all the "information" in the form of social networks and chat rooms and second-rate blogs like my own along with everything else both meaningful and utterly trivial that humanity can regurgitate?

No one knows but I do wonder. In fact it is inquiry and observation itself that is a basis for my personal sense of wonder.

So, in the sense of the Now, speed is associated with mass, volume, space, density, however you want to cypher it. That means that karma isn't speeding up (that is the appearence or illusion of what we think we see). Karma is, in fact, filling up the Now, or at least spilling into the Now.

It is an interesting conjecture worthy of more thought and trying on how that feels...if I can spare the time.

Wednesday, February 22, 2012

A Speech Unsurpassed

I have recently undertaken the project of backing up and organizing all my assorted audio file CD/DVD collection on to an external hard drive. In the process of going through some older stuff I have on CD I came across Martin Luther King’s famous “I have a Dream” speech. The speech lasts a bit under 17 minutes; and I have listened to it a couple of times over the past few weeks.

February is Black History Month so the time was rather auspicious that I would rediscover this audio file after so many years. February is also the month that I place the Stars and Bars flag out on my front porch. The first elected Confederate Congress met in Richmond, Virginia on February 18, 1862, some 150 years ago this past Saturday. I’ll let my readers struggle with the apparent contradiction between my admiration for Dr. King’s speech and my lifelong appreciation for the failed Southern Confederacy. There is no incongruity in my mind.

Anyway, as I listened to Dr. King’s speech a couple of things occurred to me. First of all, I remember my university days when the college radio station would play one of Dr. King’s sermons on Monday evenings at 7pm. I made a habit of tuning in because I have heard few speakers in my lifetime as powerful and inspiring as Dr. King. His sermons were not always the best of speeches but the overall body of work was of interest to me. The man was a consistently effective speaker. I heard several dozen of his sermons recorded on Sunday mornings at the Ebenezer Baptist Church.


Of course, Dr. King had been dead many years by the time I became acquainted with him as a public speaker. I have no memory of his person as I was 8 years old when he was murdered.

The fundamental aspect of Dr. King’s oratory talent, of course, lies in his voice. It is a deep, solid, confident voice. It resonates with emotion without shouting; it is forceful without sounding self-serving or arrogant. His rolling distinctly southern inflections, his change of speed and fluctuations of tone are obvious if you study his delivery but, like a work of art, he can be appreciated and have an effect on the listener without any understanding of the very real machinations of his utterances.


The “dream” speech capped off activities for the March on Washington for Jobs and Freedom which occurred on August 28, 1963. It was delivered before about 200,000 people and was broadcast “pre-recorded” to millions of Americans by CBS News. I use this youtube video of it for the mention of timings below.

Dr. King is introduced as “the moral leader of our nation.” In a slow, dominant procession and cadence of rhythmic words, he begins by declaring the event of his speech, the assemblage of thousands that have turned out facing the Lincoln Memorial on the great National Mall, as “what will go down in history as the greatest demonstration for freedom in the history of our nation.”

“Five score years ago…” Dr. King speaks of Lincoln’s Emancipation Proclamation in the style of the famous Gettysburg Address. He also engages the moment in the reverent, self-righteous, and high-minded ideals of Lincoln’s bold act of freedom for the slaves (though it is of interest to note that Lincoln's proclamation freed no slaves in the Union itself). Dr. King wishes to express himself on his great stage at this high philosophic level. And he does so. Powerfully.

The first major applause of his speech by the large audience comes just before 4:30 into it. Dr. King says deliberately and with utter conviction: “America has given the Negro a bad check. A check marked ‘Insufficient Funds’.” The audience applause lasts 12 seconds. Dr. King waits, basking in the moment.

At about 5 minutes Dr. King speaks: “So we have come to cash this check; a check which will give us upon demand the riches of freedom and the security of justice.” Fully nine seconds of applause rewards these comments, which seem overly idealistic in today's more cynical times. So far has idealism fallen in the postmodern world.

Dr. King speaks of the “urgency” of the Now. “Now is the time to lift our nation from the quicksands of racial injustice to the solid rock of brotherhood.” Dr. King proclaims the “sweltering summer” of “the Negro’s discontent.” At about 6:45 comes this: “Those that hoped that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual.” 13 continuous seconds of applause.

He cautions at about 7:37: “In the process of gaining our rightful place, we must not be guilty of wrongful deeds. Let us not seek to satisfy our thrust for freedom by drinking from the cup of bitterness and hatred. (Light applause for five seconds.) We must forever conduct our struggle on the high plain of dignity and discipline.” Dr. King grounds this emotional wellspring he is building with his speech into a tempered and thoughtful manifestation.

He thunders on about “our creative protest” and the “marvelous new militancy” though he cautions against attitudes of racial hatred by black Americans themselves because “many of our white brothers…have come to realize that their destiny is tied up with our destiny.” (10 seconds of applause)

“We can never be satisfied…” becomes the repeated chant of the next section of the speech. Dr. King starts to establish his control of the audience and repeats this phrase. Then at 10:32 through applause: “No. No we are not satisfied and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream.” (10 seconds of applause)

Dr. King’s voice works as a clanging bell, ringing loud and clear. Strong, confident, full of deep personal conviction.

The “dream” aspect of this speech is first mentioned at 12:20. He claims it is “deeply rooted in the American dream….We hold these truths to be self-evident that all men are created equal.” A Jeffersonian phraseology interestingly enough.

From there, Dr. King builds upon the repetition of the word “dream” to 13:38: “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. I have a dream today!” (10 seconds of applause)

Through 14:30 Dr. King briefly transforms himself into a southern Baptist preacher as anointed with the Holy Spirit. He knows he speaks the inevitable truth of equality. He knows it does not exist as he gives this speech. He takes the power of that force of change and places it into his speech, into his “dream.”

Then comes the “with this faith” repetition at about 15 minutes. “With this faith we will be able to untangle the jangling discord of our nation into a beautiful symphony of brotherhood.”

At 15:38 Dr. King quotes: “My country tis of thee, sweet land of liberty, of thee I sing. Land where my father’s died, land of the pilgrim’s pride, from every mountainside, let freedom ring.” And he rings out to the crowd, lifting them up. And he spins this metaphor into the oppression of his Now. And it builds as he geographically mentions specific places covering all of America, including the south.

16:47 through continued applause: “And when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, (Dr. King clinches his fists at the crowd, arms locked straight…power) black men and white men, Jews and Gentiles, Protestants and Catholic will be able to join hands and sing in the words of the old Negro spiritual, ‘Free at last! Free at last! Thank God Almighty we’re free at last.'” (Dr. King immediately turns and leaves the podium without hesitation. There is thunderous applause and an empty podium.)

There are several phrases Dr. King uses over and over in exacting southern Baptist preacher style to craft an emotional connection with his vast audience. “100 years later…” “Now is the time…” “We can never be satisfied...” “Go back to…” “I have a dream…” “With this faith…” “Let freedom ring…” The crescendo of the speech explodes into a vast and glorious personal freedom beyond every prejudice and economic woe.

It appears that the entire “dream” metaphoric finale was orated by Dr. King extemporaneously or perhaps by rote. He does not look down at any notes in these final minutes as he does regularly throughout the first ten minutes of his speech. The man and the crowd and the moment were joined in a way that has not been seen in America since that day.

I find myself wondering where have all the great speeches gone? Why are the few more recent great ones like Ronald Reagan’s “Challenger Disaster Speech” in 1986 (lasting less than 5 minutes) or some of Robert Byrd’s speeches as recently as 2003 that I have posted about previously and have personal memory of, why do even these rare speeches pale in comparison with Dr. King’s great speech?

President Obama has never delivered such a speech, despite his great oratorical skills and overall charisma (which is a central part of what polarizes so many against him). If anyone needs to make such a speech today it is Obama; and perhaps Obama is another Dr. King in some respects. But, he does not have Dr. King's unique voice nor does he possess Dr. King's passion, so the delivery of words will always be different; and he does not live in Dr. King’s black and white times. Dr. King's speech mentions nothing about Latinos or Asians or Muslims, for example. Today there are many more colors and varieties contending for even greater rights and standards of living. Our times seem far too complicated for the spoken inspiration of any person. And yet this 1963 speech still resonates with us.

The bar was set high on a mountaintop that summer day. Even Dr. King’s
other most-famous speech about “I have been to the mountaintop,” delivered the night before his assassination in 1968, does not match this splendid high moment, though it may perhaps be considered the lesser of mutually outstanding twin peaks.

In today’s even more complexly polarized political landscape, with debt choking us and jobs eluding a multitude of persons of every color and creed, it would seem a grand and glorious act of healing compassion to hear someone utter such words, perhaps even on another topic, with such delivery and rhetorical style that the words stand by themselves and live in the consciousness of society as a whole. Dr. King bound the wounds of his time with his words. These words still have that healing capacity today. This is the greatest speech of my lifetime to date, and though I have no personal memory of it, neither can I imagine the circumstances nor the talent and emotional intellect that would allow some future speech to surpass it.

Saturday, February 18, 2012

J.M.W. Turner


Norham Castle, Sunrise. (circa 1845)

Last weekend was extremely windy and cold. So, Jennifer and I spent much of the time indoors, piddling with this and that. I was reading the introduction to one of my books on Impressionism and noted in particular the influence of earlier painters on the movement. One heavyweight artist that stood out to me was Joseph Mallford William Turner.

But, the book I was reading only had one painting of his. I recognized the work, however, as a piece I had seen many years ago, just after college, when a Turner exhibit came to the University museum. This motivated me to fire up my iPad and go the terrific app, Art Authority, to see what was contained there on Turner's work.

There are 127 Turner paintings in Art Authority. Jennifer and I both enjoyed looking at them, spending more time on some of the ones presented in this post. Jennifer was particularly taken with Turner's precise titles for his paintings, mostly watercolors - the medium he preferred even though he was accomplished in oils as well.

While Turner could paint vividly detailed landscapes, it is his exploration of more abstract representations that appeal most to Jennifer and me. It is easy to see his influence on Impressionism by enjoying these works. They are examples of where Turner did not attempt to paint nature as seen by the human eye but rather he painted light as it is expressed in nature, particularly defused light in fogs and mists.

This is something few artists before Turner had attempted and certainly no one before him experimented with the abstraction of light, combined with its emotional power to the extent of Turner. In this sense he was a true pioneer. He exhibited impressions of light and nature and people that pre-date Monet, Renoir, etc. by 30 - 50 years. Amazing and prophetic stuff.



Rain, Steam and Speed - the Great Western Railway (1844)


Light and Color - the Morning after the Deluge - Moses Writing the Book of Genesis (circa 1844) To me, this seems almost like a reflection in a brass door knob viewed close up.


Snow Storm: Hannibal and His Army Crossing the Alps (circa 1812)


Death on a Pale Horse (circa 1825-1830)


The Decline of the Carthaginian Empire (circa 1818) This work is less abstract and typical of Turner's detailed, neoclassical work that was far more common in this period.


The Burning of the Houses of Parliament (1834)


Snow Storm - Steam Boat off a Harbor's Mouth Making Signals in Shallow Water (circa 1843)


Venice, Looking East from the Giudecca: Sunrise (1819) Compare this with Claude Monet's "Impression: Sunrise" from 1872 and you will see Turner was more than a half century ahead of his time.

Wednesday, February 8, 2012

The Age of Social Catastrophe

I have posted several times on my interest in the Eastern Front of World War II. There was never anything like it in terms of sheer numbers of dead and prevalence of destruction in human history. But, Robert Gellately succeeds in placing this appalling war unto itself in a larger context with his work Lenin, Stalin, and Hitler.

Originally published in 2007, the book just now came around in my reading queue. Much of what it contains I already knew from other readings through the years. But, particularly where Lenin is concerned, the book taught me some new things and certainly it transforms the Eastern Front from a thing upon itself into something within wider social forces at work in Russia and Germany since the end of World War I, leaving the East Front tragedy as the horrific exclamation point at the end of a long, atrocious sentence in the twisted narrative of human history.

There is very little in my personal library about Vladimir Lenin. His political life is examined with a fair amount of detail throughout the first 150 or so pages of Gellately’s work. Lenin was living in exhile at the start of the Russian Revolution. But, through a turn of events I won’t get in to here, he became the leader of the Bolshevik movement which (I learned from the book) competed early on with the Mensheviks for control of the Communist Party.

When Lenin finally attained power toward the end of 1917 he authorized and established (as head of a committee) the Cheka (secret police) and concentration camps. Lenin and his lieutenants, including Joseph Stalin, advocated allowing the Cheka to run amok among supporters of the old tsarist regime. Thousands were killed or imprisoned as enemies of the state.

As Communism proceeded it ran to the heaviest resistance not from the tsarist regime, however, but from the vast numbers of peasant farmers in southern Russia, the Ukraine, and the Crimea. The average peasant did not want to give up his land to collective farming. He wanted to keep his land. Resistance occurred.

In September 1918, Lenin authorized the Red Terror and treatment of enemies of the regime was radicalized. Almost immediately, 15,000 were executed. By 1919, as many as half a million Cossacks were killed or imprisoned. In the Crimea “…at the end of 1920, somewhere between 50,000 and 150,000 were shot or hanged. The witch-hunt continued afterward, stoked by Lenin, who talked about how up to 300,000 more ‘spies and secret agents’ in the Crimea be tracked down and ‘punished’.” (page 72)

In the 1920’s Lenin solidified power. It was during that decade that Stalin became his right-hand man and virtually unchallenged successor. Stalin began his rule with an expansion of public trials in Moscow that Lenin began years before. “Like Lenin he believed in the educative value of such rituals which, to be successful, had to reveal a credible threat by providing a story line plausible to ordinary people.” (page 161) Mass fake trials resulted in continued executions and deportation to concentration camps.

But the trouble with the peasants remained for Stalin. As late as 1930 there were 14,000 protests throughout the southern region involving 2.5 million peasants. (page 174) As more arrests were made and the Gulag system grew in numbers, Stalin began to shift prisoners into labor camps and he used forced labor for a number of massive construction projects such as the Belomor Canal. Unknown hundreds of thousands had died by the time Hitler came to power in Germany in 1933.

Adolf Hitler’s reign of terror is better known than is Stalin’s or Lenin’s. Gellately devotes fully half his book’s 600 pages to the rise of the Nazi’s, their fundamental racism against Jews and vehement opposition to Bolshevism. Suffice it to say that the Nazi’s were no more committed to imprisoning and killing people as they saw fit, but, were far more systematic in their murder methods.

Nevertheless, Hitler did not start out by imprisoning and killing the Jews. To begin with he wanted to make life miserable for them so they would simply leave Germany. Of course, many were beaten and killed. Yet, Hitler was far bloodier with his purge of the Nazi’s party’s own paramilitary branch, the SA, than he was on the population as a whole. Hitler’s first mass execution was of members of his own party.

Meanwhile, Stalin purged his own military and citizenry throughout the 1930’s, affecting some 3.5 million people. “In 1937 alone, 936,750 people were arrested, of whom 790,665 were ‘convicted.’ Astoundingly, 353,074 of these were shot, and 429,311 were sent to the Gulag or prison. In 1938, the numbers fell to 638,509, bet the executions, at 328,618, did not decrease significantly.” (page 281) Long before Hitler, first Lenin then Stalin racked up millions of deaths in the name of the Marxist dictum of economic evolution.

The Nazi’s started their more radicalized treatment of the Jews when they invaded Poland in September 1939. After that, the concentration camp population, which contained only a few hundred thousand people up to that time, swelled considerably. In Poland, the Nazi’s directly murdered tens of thousands of people. The German Army objected to the often undisciplined nature of the killings but did not raise a hand to the ruthlessness itself.

By the time of the German invasion of the Soviet Union in 1941 the SS and the Wehrmacht worked out an arrangement that guaranteed there would be no chaotic operations conducted in its immediate logistical rear area. The book makes it clear, however, that often the army assisted in “anti-partisan and Jewish Bolshevik” efforts. The ordinary German soldier knew all about these mass murders.

German precision was almost unimaginable. “…in March 1942 75 to 80 percent of the victims of the Holocaust were still alive. The greatest killing was in the year from March 1942 to March 1943, by the end of which only 20 to 25 percent of those who were to be murdered in the Holocaust were still living.” (page 460) Lenin and Stalin may have collectively accounted for millions of murders, but it was over a period from 1917 to 1953, roughly 36 years. The bulk of Hitler’s genocide happened in just a couple of years.

Perhaps the best example is found in what happened late in the war with the Hungarian Jews. “This deportation of the Hungarian Jews to Auschwitz was compressed within seven weeks and became the single greatest massacre of the Second World War. Auschwitz was revamped to receive and kill large contingents, and beginning in May the schedule was for three or four trains a day, each carrying 3,000 to 3,500. In total 438,000 were sent to Auschwitz between May 15 and July 9, 1944.” (page 468) All but a handful of tragic, starved, and disease-ridden survivors, were murdered in a matter of weeks.

Even during the war Stalin continued his ruthless treatment of his citizenry. About 175,000 naturalized Germans living in the Soviet Union were sent to the Gulag and died. Killings in the Caucasus and the Crimea numbered about 100,000. “In just five years, from 1941 to 1945, official records show that 621,637 died in Gulag camps.” (page 521)

After the war Stalin continued to imprison and murder his own citizenry up to his death in 1953. “More recent estimations of Soviet-on-Soviet killing have been more ‘modest’ and range between ten and twenty million. In the penal system alone, according to one scholar, 2,749,163 died between 1929 and 1953. Those numbers are still incomplete, not only because they do not cover every year since 1917 but also because they exclude labor colonies completely. The total makes no mention of the deaths in transit or the hundreds of thousands executed by quota during the Great Terror or done to death during wartime ethnic cleansings and in countless other ways.” (page 584)

Altogether it amounts to a killing of humanity by humanity surpassing our contemporary abilities for a full accounting. Long and seemingly forever is the list of dead bodies who no one knows, their names uncounted, beyond the scope of even the Holocaust itself. It would be unbelievable that any human ideology could hold such power upon mass human behavior if it were not an undeniable historic, physical fact.

I see similar atrocities around the world today. The murderous regime in Syria is the obvious current example. Libya is another recent one. You can go back a few years to Saddam Hussein and Slobodan Milošević. Genocide is certainly still with us. But, fortunately, we know nothing on the massive scale of "The Age of Social Catastrophe."

For their crimes against humanity, Hitler and most of his lieutenants either committed suicide or were hanged or imprisoned. Meanwhile, Stalin, the victor of the Eastern Front, continued his reign of terror until his death in 1953. No criminal charges were ever brought against Stalin in his lifetime. In some ways, the horrific crimes of the Nazis legitimized the much larger (in terms of numbers) genocide during the Stalin regime. Either way, however, Lenin, Hitler and Stalin collectively make today’s mass murder look like child’s play.


While we are counting such things, however, it should be mentioned that the worst mass murderer in recent history was someone outside the scope of Gellately's book. That title goes to Mao Zedong, who was probably responsible for the deaths of more than 50,000,000 human beings. The true number may never be known as they don't really keep track of that in China.

Thursday, February 2, 2012

We Are Hosed

Federal Reserve Chair Ben Bernanke spoke before House Budget Committee today regarding our fragile economic recovery and its relationship to the growing US debt situation. While he sees an improving economy, Bernanke is simultaneously worried about the growth of public debt and the role of the government in guiding the economic recovery.

What Bernanke is recommending is
a classic Keynesian approach to economically sluggish times. Unfortunately, there are signs that the Keynesian model could be wrong and even harmful. Fundamentally, in a high-debt environment Keynesian economics, the dominant economic theory at work in the world today, inevitably leads to one economic bubble after another.

Reading my iPad last night I came across a couple of current pieces on various economic issues. The best one is written by respected investment analyst Bill Gross. He does not mince words.

“A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets – bonds, stocks, real estate and commodities alike – is now delevering because of excessive “risk” and the “price” of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time.”

What is at stake here is something more profound than
keeping new jobless claims under 400,000. The Gross commentary points out that keeping interest-rates low can negatively affect the risk-taking that is usually necessary to pull out of a recession. This is due to the fact that low-rates often reflect a fear of the return of money rather than a return on money.

But, more importantly according to Gross, “When all yields approach the zero-bound, however, as in Japan for the past 10 years, and now in the U.S. and selected ‘clean dirty shirt’ sovereigns, then the dynamics may change. Money can become less liquid and frozen by ‘price’ in addition to the classic liquidity trap explained by ‘risk.’”

Thus, banks are not lending cash. Investors want to remain in cash. The reward is not worth the risk. At best, this leads to stagnation. But, it is also a Catch-22. The US will
refinance almost $3 trillion in public debt in 2012, about 20% of our ridiculously high total public debt. It is great that we can refinance the amounts at such low interest rates. However, what happens if rates were to rise? It would only increase the weight of the debt as it becomes refinanced.

Richard Russell has argued for the past year about “the effects of negative compounding.” It is a well known axiom of investing that the compounding of interest earned or profits taken, i.e. the re-investing of money made on investments, is the secret to exponential growth in personal wealth. You take everything you ever make off savings or investments and you put it right back in to your savings or investments and allow that new money to compound into more new money which gets re-invested and so on. That is how you turn $1,000 into $1,000,000 over a few decades.

Well, the reverse is also true on the debt side. If the debt grows and just gets refinanced, particularly at higher rates, then the amount of debt compounds and weighs more heavily on the economy over time. Where interest rates are concerned, it would seem we are damned if we do and damned if we don’t in terms of keeping rates low.

Of course, I realize that in a democracy such as ours it is impossible to burden the voters with metaphysical truths when so many of them are struggling just to make ends meet. I understand that the urgency of the moment seems to trump any meta-considerations. This is part of the problem we face. There is no genuine incentive for politicians to address the real problems because the only solution to those problems means pain for their constituents. This is borne out in a current article on
The Atlantic website.

“The ten year cost of the Bush tax cuts is $2.8 trillion, but only about a quarter of that is for the taxes on high earners; the rest is for tax breaks affecting those making less than $250,000 a year. Moreover, 'extend tax policies' also assumes that we fix the AMT to prevent it from hitting middle-income voters. That costs another $800 billion over 10 years--about the same as the 'tax cuts for the rich'.

“In other words, the lion's share of that money is going to the middle class, not the rich. To close the deficit, we're going to have to soak them.”

That article goes on to examine the consequences of cutting spending to balance things out. But the two primary drivers of current spending (outside of defense) are temporary programs for the unemployed and the weight of retiring baby boomers on the cost of entitlement benefits. Will any politician attempt to cut Social Security and Medicare to reduce the deficit? Not one that is likely to get re-elected.

The Atlantic continues:
“In other words, none of the possible changes is going to be popular… Deficits are a drag on future growth whether they are spent on supply-side tax cuts, or whizzy infrastructure. If you believe that one is a problem, you should also worry about the other.

“Of course, like most commentators on the deficit, I doubt the politicians who asked these questions were actually worried about the effect on their future. Rather, this was a proxy for the argument they wanted to make: for or against lower taxes, for or against higher spending.

“But the rest of us should care. Our deteriorating fiscal condition is going to have far-reaching and rather unpleasant effects. And our Congressmen are mostly focused on scoring ideological points.”

Everybody seems to be interested in
“decoupling” the US economy from the Euro Zone. Indeed, so far in 2012 we have seen modest economic growth in the US and some consider the immediate future bright. It is hard to argue against what has been realized so far this year. But, as I have said before, the debt is only getting bigger and the problem is only magnifying, slowly perhaps, like global warming; a gradual worsening that does not cause general alarm but ultimately has consequences for everyone.

Another respected analyst, John Mauldin, wrote at the end of 2011 that
“You Can’t Solve A Debt Problem With More Debt.” In that article he examined the various options out of the current situation. In a nutshell they are: savings, faster economic growth, and/or inflation. But, each of these alternatives is difficult or impossible to achieve in the current environment. That is why every central banker on Earth is pushing more debt. It is the most workable alternative.

Bernanke’s statement before congress today reflects all the internal contradictions of this truly ominous situation. We need to find a “sustainable debt trajectory” without “threatening the uncertain recovery.” Bernanke believes we can do both, but he was pretty short on specifics as to how to achieve this apparently delicate balance.

It is a tight-rope act, for sure. But, in the end, here’s what will probably happen: Politicians will do everything to avoid pain and get re-elected. The debt will continue to grow. Interest rates will remain low for the next few years and this will solidify stagnation. The weight of the debt will grow modestly until it reaches some sort of tipping point in the not-too-distant future. At the point of crisis, matters will be dealt with abruptly and, mostly likely, painfully.

Or some variation of these things. Uncertainty prevails any way you want to cut it. My guess is that this uncertainty will continue to be good for gold. There is even talk today of bringing back the gold standard. I don't expect that to happen. Long-time readers know gold is where I have most of my money. I could be wrong, of course. But, that is what “risk” is all about - you take your chances and place your bets.