Lessons of 2011, Future of 2012

29 Dec 2011    

I love reading the opinion pieces in the newspapers around New Year, I love reading what the writers think happened in the year just past, and what they think will happen in the year to come. It's a chance for the journalist to really show what they are made of, to cast off the shackles of responsibility and have some crystal ball gazing fun. Today I saw the first such article in the Wall Street Journal, it reminded me of walking through the winter woods as child, one day you see a solitary bluebell bursting out, but within a week the woods are full of them.

The Wall Street Journal article, Top Stories of 2011, talked about Apple. Not just the death of Steve Jobs, the amazing thing at the moment is how his competitors are dying. Was Steve Jobs the only decent man in American technology? Google are slavish money grubbing thieves whose products are as ugly as they are chaotic, Mark Zuckerberg is strange and scary, Steve Ballmer is like Lord Voldemort, better left unspoken. Steve Jobs called them all evil trashy bozos, will other people start to see life his way in 2012? Perhaps we could say that a lot of new people fell in love with Apple this year, and everyone else lost a lot of love, and the bad guys are worried that people will actually start hating them in 2012, instead of just holding their nose.

That's a fine idea, but I think it's possible to be more ambitious. What I try and do is think about what is happening deep inside the people of the world, and how their actions intermesh with the changing future overhead. Carl Jung talked about a "synchronistic" link between consciousness and fate, and people who think the existence of god is intuitively obvious usually point to this principle as their source of their conviction. Remember the film "The Matrix", Neo woke up because he started becoming aware of the matrix. Lot's of people talk about bizarre coincidences, two friends calling at the same time, fate smiling on the worthy, bad lucking destroying the unworthy etc. People who can't see this link should go and check some science books and/or things like studies of near death experiences for their proof of god, or put their faith in the advice of the experts who have studied the subject properly. Nevertheless, you don't need to believe in god to predict the future, you imagine the future being created by the minds of the people inside it, and god becomes a metaphor that sums up the evolution of human consciousness and the struggle between wisdom and ignorance. So I talk about how the Age of Enlightenment focus on science and engineering and elite art caused Western consciousness to flourish by improving the sloppy Dionysian thought processes of the Medieval peasants. 

So I try and figure out what the "zeitgeist" is and how it is changing, and use that to foretell the future just as a good father who understands his son can see where he is headed if he stays on the current path. Good journalists can do this too, they too have a feeling for their audience, they know what makes people tick and tock, and they can use their insight into human nature to think what is wrong with the people and what's going to challenge them in the coming year. This kind of speculation requires some Dionysian intuition, the problem with this is that it's difficult to validate, proof comes by slaughtering everyone in expert cross examined verbal debate, or noting the success of prophesies. Alas not many people these days are either willing or capable of engaging in verbal debate, so one is forced to rely on prophesy. An indirect falsification is possible by considering personal virtue, a journalist becomes a force for ignorance and evil if he closes his mind to new insights or hoodwinks his readers to sell copy. Metaphorically speaking, degenerate journalists don't leave the city, their writing is devoid of idealism and truth, it is purely cosmetic and designed to make its readers love them. Constructive journalists love the heavenly experts who tower over society far more than the people in city, and they translate the wisdom of the experts into food for the people, they are not mesmerised by the people, nor do they pander to them.

I hope readers will feel that this article is constructive not destructive, that I am not boxed in by ideology, that I am open to light and wondering all over the skies and looking for the gods so to speak. Seclusion helps me by cutting me off from group think, and dedication is enormously important, it's been almost a year since I even ate in a restaurant now, I study philosophy all day long, it's my whole life. I have spent a vast amount of time thinking carefully about human nature and thought process, trying to tune into my matrix or understand the matrix of others. Philosophy also gives me unparalleled advantages by teaching me a framework by which to come at problems, I have worked with lots of models that describe the matrix, I have studied active-passive attachment-detachment purity-quantity etc, so I can quickly understand things untrained people find totally mysterious. The power of philosophy is something Socrates talks about carefully, because when the world goes to hell people become afraid of philosophers and like doing away with them! In the same way that the New Testament is a political thriller about revolutionary Jesus, so Plato's Dialogues are a political thriller about the revolutionary Socrates. The power of philosophy also, of course, relates to the great debate between Aristotle and Plato, how Aristotle tried to take the psychological matrix and use it to study physics instead of sociology, it sounds to me a little like witch doctor philosophers fixing cars by talking to them, we fans of Socrates say we study nothing not everything.

So when I think about Germany I can see the dynamics of their personality, and how it fits in with their stories of passionate Faust and his disinterested wife, and how the history of Germany fits in with their personality, and lots and lots of fascinating ideas start poring into my head. Great statesmen such as Von Bismarck has this ability too, and he made some brilliantly accurate predictions about the disastrous future awaiting Europe when the mindless Kaiser ignored his advice and turned the helm toward populism and liberalism. The problems of world today exist because men like Von Bismarck no longer rule, and in his place are false prophets, and these false prophets live in sin because they pretend to possess a wisdom that they know they do not in fact have. They have turned the helm in the wrong direction again, and the damage they have done is incomprehensible.

Looking into the matrix of human life is the most incredible experience, but I worry it's too spellbinding and will dash me on the rocks like the sailors who heard the sirens. Socrates was the smartest man in Ancient Greece, but not the smartest person. The smartest person was the Priestess Diotima, and her specialty was this kind of insight. Back in Ancient Greece there were a number of outstanding female philosophers, including the wife of Pythagoras (who was probably critical to his discoveries). I think the difference between a woman and man is that we men can study philosophy even when we are unworthy and be purified by it, but for a woman philosophy becomes possible only when she is pure. On second thoughts that's probably nonsense, I am just taking about my experience, and my way of teaching. I am not going to stare deep into the matrix for hours to write this piece, I have wasted far too much time doing that in the past, and it's a waste of time because what makes us men better is studying hard core philosophy, and when we have made ourselves wiser we can have fun waxing lyrically more effectively, so much so that past observations look trivial and blasphemous, even making us feel ashamed of even having bothered once writing about them. So I am just going to talk about a few fairly obvious things in this article...

I am always talking about history, but today I will just go back to January 2010. January 2010 was particularly exciting because it was the beginning of a new decade, so all the journalists really pulled out the stops to write meaningful articles. My gold star journalism award of January 2010 goes to Niall Ferguson writing in the Financial Times. In an article called "The decade the world tilted East" he wrote:

First, we are seeing at least the beginning of the end not just of an illusory “unipolar moment” for the US, but of western supremacy in general, and of Anglo-Saxon power in particular... I am trying to remember now where it was, and when it was, that it hit me. Was it during my first walk along the Bund in Shanghai in 2005? Was it amid the smog and dust of Chonqing, listening to a local Communist party official describe a vast mound of rubble as the future financial centre of south-west China? That was last year, and somehow it impressed me more than all the synchronised razzamatazz of the Olympic opening ceremony in Beijing. Or was it at Carnegie Hall only last month, as I sat mesmerised by the music of Angel Lam, the dazzlingly gifted young Chinese composer who personifies the Orientalisation of classical music? I think maybe it was only then that I really got the point about this decade, just as it was drawing to a close: that we are living through the end of 500 years of western ascendancy.

I love the words Orientalisation of classical music, his article was so radical the FT never invited him back, or maybe he is just too rich and famous for the FT these days. Commentators such as Niall Ferguson who highlighted the rise of China and the crushing problems of the West are hailed as heroes these days, and journalists who are still fighting it have their tale between their legs if not their P45s in their hand quite yet.

But seriously, I want you to realise something extremely important - back in 2009 the vast majority of people thought China was just growing fast because it was adopting capitalism like India and starting from a low base. People used to say China demonstrates the power of liberal economics. There was no realization that China is doing something different and special economically, no understanding of State Owned Enterprise or the investment debate etc. The world thought the wealth of Northern America and Western Europe proved that Liberal Capitalist Democracy is superior to all other forms of government. Today that old religious faith in the superiority of the West is laughable, people at both the bottom and the very top talk about how the Chinese are economic superstars and the West is failing.

In technical language we have a crisis of "performance legitimacy" in the West. Performance legitimacy is an expression used by political scientists, it is the axiomatic principle that what really matters to people in the long run is not democracy or monarchy or any other philosophy, it is economic success. When democracy failed economically in 1930s Germany it was replaced with dictatorship, when Communism failed economically in 1980s Russia it was replaced, if the American Constituition is one day believed to be economically inferior to some alternative, it too will be replaced. In the long term, say the scientists, it's all about living standards not dogma. In 2010 there was sea change in perception, the idea of Western superiority took a beating. In the last couple of years Francis Fukuyama has written articles saying performance legitimacy is the critical metric, and democracy is currently failing America, Europe, India and many other countries. Wolfgang Schäuble and Angela Merkel are busy trying to tone down democracy in Europe with federalism. The Italian people are delighted to have a new technocratic government. Senior Chinese politicians, especially the Chinese Prime Minister Wen Jaubo used to talk about adopting liberal democracy one day, but in the last couple of years that old liberal talk has totally disappeared and the government is getting much more radical.

So I can summarize the year 2010 by saying we saw countless articles about the fight between the Washington Consensus and Beijing Consensus, Democracy vs Paternalism, Liberalism vs Discipline etc. American Democracy and Chinese Scientific Development basically fought like tigers for the heavyweight championship of the 21st Century, and the golden belt called performance legitimacy was stripped from America's waste, and it's now in the process of being handed to China. It wasn't even a spilt decision, frankly America was beaten badly, knocked down in round after round, and hospitalised in the middle of the fight.

Let me try and describe this in terms of psychology. Imagine two men, one call Sam and one call Deng. The man called Sam has faith in popular culture, democracy, free speech, personal choice, market economics, hands off government, CEOs adding value, little guys climbing the ladder and lots of other things. All of these things I have mentioned are things he talks about at the pub, we could call them "The Way of Sam", or just "Sam's way". I might call Sam's Way a psychological matrix, for example, if you picture John Wayne in your mind's eye you can probably guess intuitively where he stands on a lot of political issues because you can feel his mindset. A new age hippy poet might wave his hands like a magic wand and say this matrix is a magnetic aura or something strange like that, and he can connect to it and feel John Wayne running through him like iron filings in his blood running through his veins. Now the other guy called Deng is pretty mysterious, some people see him a scientist, others a philosopher, others a Samurai. People don't know what "The Way of Deng" actually means, but what they do know is that it's certainly not "Sam's Way".

Now imagine Sam is your boss, and you have spent you career thinking the same way as him, but one day this guy called Deng starts to make him look like an incompetent fool. First you notice your boss doing badly, that's about 2008, then you start to notice this guy call Deng looking like a star, that's about 2009, then it really sinks in that the two are in competition, that's about 2010, then Deng wins a gold medal, finally you loose all respect for your boss, that's about 2011.

If you walk out onto the Western streets today and ask people questions you will hear the average guy saying Sam is a fool and Deng is a star, but Deng is also the sort of scary demanding star you don't actually want as a boss unless you're type-A. If you ask an elite journalist they will tell you Deng is evil and Sam is a great guy, but if you really look them in the eyes they start squirming and fidgeting and then they get hysterical and admit that Sam is a fool. You see this neurosis most clearly at the FT today, the world's elite newspaper, the newspaper that most closely reflects Sam. But the point is that Sam is wrong, Deng is kicking his backside for a reason, because Sam is fat, sloppy and muddle headed, whereas Deng is fit, sharp and scientific. Perhaps we could say that the Financial Times have become enemies of Apollo god of truth, and enemies of Hermes god of guidance and change, and they are fighting to keep Captain Sam in charge of the ship by hoodwinking the passengers, but by doing so they are hurting a lot of people. Because the FT is by far the UK's most influential newspaper, it's actually supposed to be guiding society, and if you believe in God you say that the extent of their sin depends on the extent to which they have deliberately shut out the light. I saw an article in The Economist Magazine (the FT's sister) this week, "Heterodox Economic Models", I excitedly read it wondering whether it would represent a first breakthrough and the beginning of Anglo-Saxon salvation. The article didn't mention China once, nor Economy of Scale or Consumerism or Investment or any of the other words I was looking for, in fact it had nothing to do with new economic models, it was all about money printing or negative interest rate magic tricks, it was a complete waste of time.

Imagine an old shrivelled up hag of a woman married to Sam, she hates Deng because he is challenge not just to her husband but to herself. You see all the sloppy unprofessional populist things Sam talks about, are also the very things she talks about, because deep inside she is like Sam too. We say people who are in love wear rose colour spectacles, her spectacles are more like Medusa's spectacles, she actually accuses Deng of having a hard heart and caring about himself instead of the people etc, but the truth is she is just seeing her own selfish lustful disregard for truth in the mirror. Let's take an example: Do you know what the difference between Tesco's Toothpaste and Colgate's toothpaste is? Can you tell them apart in a blind tasting? Do you know which is better for your health? Do you even know what the basic ingredients of toothpaste are? No? Then how can you possibly call yourself a rational agent maximizing utility? All those toothpaste brands are a waste of time, we could set up one factory that made all the toothpaste in Europe and improve economic efficiency. This is the kind of idea that Deng talks about, but it's exactly the kind of idea that sends Sam's wife wild and she can't bear to publish. She hates the idea the government should make expert decisions on behalf of individuals, because her narcissistic nihilist belief is that there is no greater truth than what she herself calls pleasure or power. Popular revolutionaries say Sam and his wife need to be executed and replaced with a wise King, but Ancient Greek philosophers such as myself believe it is the job of the wise to hover around the elite whispering in the background, deploying all our rhetorical skills to turn them around into the light. We believe teaching the elite is like a natural childbirth birth, more painful and much slower, but ultimately better for the child than a caesarean.

It was because I noticed Sam loosing his mojo in late 2010 that I predicted "geopolitical change" would be the main theme of 2011. Sam's loss of face turns into a loss of authority, deep down the realization of Sam's inadequacy gives birth to delinquent and or patricidal children. So I said the main theme of 2011 would be a loss of American geopolitical power and influence in the Middle East, Japan and Europe. Think what happens to a captain when his crew and passengers loose faith in him. First and foremost his authority ebbs away, so we see rebellion and chaos and people feeling nihilistic and sailing the boat round in circles as if they are on a drunken pleasure cruise. I am not just talking about the average man, even the central bankers have lost hope in their leaders and are raiding the ships store room and consuming the last of the rations. Then there are the people who have been transformed by the new hegemony, who have worked out why Deng is top dog, they find themselves failing head over heels in love with the new paradigm, they are full of the joys of spring and breeding like rabbits with these new ideas. So in amongst all the chaos there is some high minded idealism as well.

As it happens I think geopolitical power change is still the right way to describe the lesson of 2011. The Middle East exploded then walked away from the USA, India just walked away from the Washington Consensus, the Africans too, and even European newspapers are full of talk about Anglo-Saxon evils. Japan has started finding internal demons, from Fukushima to Olympus. I think Japan is probably at the forefront of change, and the change coming is enormous. Hundreds of years ago the Emperor of Japan called the West's loud emotive culture completely at odds and destructive to the Japanese ideal of self control, so he sealed off Japan from Western visitors; I think the Emperor was probably right and one day the Japanese might reconsider his radical policy. Anyway, the main themes of 2011 have worked in more or less the way I imagined- A loss of American geopolitical support, an increase in tensions between nations everywhere in the world not least in the Eurozone, and a breakdown in the internal stability of every country in the world. Across the world the people are accusing the elite of corruption, lies and incompetence - and in the West they are right on at least on the second two counts, and probably all three. Across the world there is a move against politically correct humanitarian liberalism, and we see this in the hardening of social attitudes and the annihilation of humanitarian socialist political support. Faith in capitalism has collapsed, and I don't just mean the NYC protest movement. Outside of a few head in the sand journalists the mood is getting angry and full of despair. Will Hutton wrote:

George Osborne has no idea how to rescue the economy – but then who has? Even for battle-hardened observers of the British economy, the landscape portrayed by last week's autumn statement was shocking. Now there is official acknowledgment that a country burdened by bank assets five times its GDP and chronically poor productivity is being dragged into the deepest and longest economic setback in modern times – with awesome implications... It could scarcely represent a bleaker picture. In the 1930s, Britain had an empire to fall back on as a protected market to help support recovery; in the 1970s, North Sea oil was to come to our rescue; in the 1990s, the great credit boom seemed to solve the economic question. Nothing like that is going to happen now... What is going to make the years ahead doubly fraught is that the ideologies that used to provide the basis for our democratic discourse have been as torched as the economy. Socialism, certainly as conceived and practised over the past 100 years, is no plausible answer. But equally, nobody can dare argue that the solution is to press ahead with yet more of the free-market capitalism that has laid Britain and the west so low... An ideological vacuum coincides with the most testing economic times for decades. We need vision and visionaries – but what we have is journeymen espousing bankrupt world views.

This frustration has it's epicentre in the Anglo-Saxon liberal free market democratic world, but the change in mindset has hit the intellectual pond like a meteor, and waves are rippling out across the world and even changing places like China which are very far from the Anglo-Saxon model. There is more Sam in the West and more Deng in the East, but Sam has ruled the world for a very long time, since the late 19th Century, so Sam is everywhere, and buried very deep inside our soul. We are talking about something enormous, something monumental, the whole foundations of our personality in crisis.

Now what happens in 2012? First Sam started failing, then we noticed the amazing Deng and some of us fell in love with his philosophy, then Sam and Deng clashed and for the first time in hundreds of years Sam was humiliated and hospitalised, then the existential angst began and the people went on a drunken pleasure cruise - now the next stage is anger, fighting, vengeance and justice. The new paradigm is still in the distance, it's not "King Sam is dead, long live King Deng", it's "King Sam is dead, now purge everything he stood for from society". This witch hunt is how people drag themselves to idealism, people can't look the demon in the eye, they externalise. So Sam's claw fisted old wife never admits her corruption, she starts starts laying into Sam, calling him stupid. As she plunges the knife in him he wails "Et tu, Brute? You wrote all those articles supporting me, in fact you were even more cowardly and weak than me, now you kill me?" I guess that's why Jesus said "let he who is without sin cast the first stone!".

Socrates said urbane elite sophist liberals such as Pericles turned the Athenians into "cowardly chattering money grubbers", and deep down this is what we are, and it's a totally and utterly shattering realization. For anyone who is good the memory of their old life fills them with shame, and especially people like me who once lived a champagne soaked life as a financial markets trader. Anyone who doesn't feel this shame, anyone who is prepared to throw that first rock, is like Sam's murderous old wife, an unredeemed poisonous old sinner. People who don't feel this shame turn to stone, they harden their hearts, and if the majority do this society dies. The challenge the destruction of liberalism presents is absolutely tremendous, and it is why Socrates said tyranny follows democracy. Think about the difference between Sparta Idealism and psychotic nationalism, it's not that easy for people today to tell them apart. The Spartan's were like SAS officers, they weren't covered in Tattoos and they didn't drink blood, they were elite professionals not animals. But liberals today can't see that difference, although every great historian and philosopher up until the 20th Century loved Sparta, liberals today think the Spartans are pure evil. Liberals today are spoilt and totally inexperienced in hardship, they have no idea what justice is, behind the facade they have less not more virtue than our forefathers, and when existential challenge threatens their wealth and life, they will turn into monsters. Likewise, within a few short years the Ancient Athenians moved from sex in the city liberalism to committing genocidal atrocities, when the cowardly chattering money grubbers are cornered they will stop at nothing.

If the Western journalists who control the Western world don't learn to spot the difference between an anti-liberal good guy and an anti-liberal bad guy, they will allow false Shepherds to take control of the flock and kill everyone. Remember what killed the world in the 1930s is that the journalism was so confused that people couldn't tell the difference between psychotic fascists and idealists. In the coming years people will start looking for strong leaders who talk fire and brimstone, and if the journalists can't tell the difference between a bohemian bum and an intellectual the world will be destroyed. These Fox News Newt Gingrich type people are not idealists, like Hitler they are muddle headed bohemian populists, they sell conspiracy theories, they have no science skills, no track record of predicting what is going to happen in the world, their message uses the dark arts, they love crowds, they love wealth, they are self obsessed.

The film Doctor Zhivago starts when the Russian revolution was just beginning, it starts with the rich corrupt elite, and men like Pasha Antipov the young revolutionary, and Zhivago the neutral romantic doctor who observes all the chaos. The girl falls in love with all three alternatively, the fat cat spoils her then dumps her, Pasha is scared by pain and hate and no good at lovemaking and only interested revolution, finally she dies happily in the arms of the nice Dr Zhivago. The world is back at it's revolutionary moment, it is seeking people like Pasha Antipov to purge society, and the main reason the popular revolution fails is because the working practices are degenerate. Remember the scenes in the once grand old house that belonged to Zhivago's father, the comrades were vicious jealous small minded bums. The elite of today might be useless, but the point Socrates makes when he talks about "drones" is that the best men are professionals like Doctor Zhivago, they are not revolutionaries. The French Revolution, the Russian Revolution, the Cultural Revolution all propelled uneducated violent peasants into the junior and even sometimes even senior ranks of the new government, and it's a disaster. Remember the opening scenes of Doctor Zhivago, the fat self obsessed elite partying whilst the people stave thinking they are gods. Remember Steve Jobs, the CEO's are bozos, they have no clue about product, it's all an illusion. That's another danger of the revolution, the CEO revolutionary, and that was what happened to Ancient Ancient Athens, and to places like Italy and Greece with the Military Junta.

Science, Science, Science, I say it all the time to everyone I can, it alone can save the Western World because the true science of government - philosophy, the holy grail - does not yet exist. I don't mean the science of economics, economists don't reach a consensus in debate, nor can they predict the future, that makes them witch doctors not professionals. The Nobel Prize winner Stiglitz is the best famous economist, and a good guy, but figuring out invisible hand is wrong can hardly be called a great intellectual achievement. Paul Krugman is another Nobel winner, but he is totally focused on short term pain avoiding liberal dogma. Margaret Thatcher, who studied chemistry at university, didn't operate at this level, she tried to heal deep long term structural issues, not apply soothing ointment. Thatcher one said "One of the great problems of our age is that we're governed by people who care more about feelings than they do about thoughts and ideas" - well it's a million times worse today with Twitter and Facebook and Hollywood. So we should look at hard core engineers and physicists, or other disciplines that are technical and objective rather than political and subjective. The Dionysian lives on and for the uneducated crowd, the scientists lives for his science and is a philosopher in waiting who studies objective truth and subjects his intuitions to constant falsification. The Dionysian is perverted by success and genius because his skill is charismatic inspiration by ego intensification and illusions, the Scientist is enlightened by succees and genius because his focus is detaching from ego. The Dionysian is a magician who pretends to know all things, but it's just an acting trick that looks good in meetings, underneath he totally and utterly out of his depth. Steve Jobs called the Dionysian executives clueless "bozos" with no expertise. Even the famous Dionysian Winston Churchill was bumbling bohemian, he declared a war he couldn't win on the basis of moral intuition, he survived the Battle Of Brittan by the skin of his teeth, then he lost every battle up until El Alamein, by which time the Russians had luckily for him defeated Hitler, his military bombing raids were largely ineffective, and his greatest contribution to WW2 was the sick and mindless escalation of civilian bombing. Who ever heard of a great drinker, only in English liberal arts! You must understand, Socrates was right, liberal arts is a disaster, and especially popular liberal arts! This is why Ancient philosophy is written in complex challenging patterns, eg a Confucian Eight Legged Essay or a Plato dialogue, to make sure it never becomes witchcraft. Countries like Singapore and China are so successful precisely because they are run by scientists not lawyers / salesmen / politicians / historians / poets etc.

I have talked about 2012 as the beginning of revolutionary times, but there is another side too. This spirit is associated with calamity too. Ignorance is evil, and Sam is ignorant, and the ignorant make mistakes and are punished by the gods. Remember the opening scene of the Iliad, the Rage of Achilles, it feels like it is heading towards one of these unrelenting moments. Imagine Zeus the fire breathing dragon coming to burn the world, preparing the soil for new life, burning the cities so the phoenix can arise etc. It seems to me that 2012 is an especially important year at a really critical time. I think the image of Ancient Greek mythology was a round table with the 12 Olympian gods seated around it, and mankind walks around the table like a monopoly board, and a each god can lift a man up to heaven, but when it gets to Zeus's turn he judges whether or not a man is hated by all the gods, and if he is, he sends him to burn in hell. I think that's a good image for what is coming, and I think there is a risk that the financial markets implode, indeed they are at the epicentre of our mindless civilization.

I think 2012 might turn out to be as famous as 2000, but for a fall in bond markets instead of stocks. People say the bond markets can't fall because there is nowhere else to put the money. But sharp declines could come about as a result of a buyers strike without even unwinding. People say the bond markets can't fall because 2012 is going to be a recessionary year. But look at Greece, recession can actually destroy the bond market because people think it's hopeless. People say the bond markets can't fall because central banks are going to print money, but take a look at the history books- money printing doesn't save a country when it goes seriously pear shaped, it just creates hyperinflation. The only thing that can save a country in trouble is bold politically painful budget cuts, interest rate increases, or confiscation of assets. Long ago I remember short sterling collapsing when John Major threatened to resign - political and economic crisis used to threaten currencies and policymakers had to respond with interest rate increases, but today politicians and central bankers are cowards and weaklings. Italy was saved by a technocratic government, that's not an option in the US. People say the US is growing, but it's only growing because it's doing nothing to address it's budget crisis and racking up debts. I think a serious rout in the bond markets in 2012 is a serious possibility, and the geopolitical consequences are potentially astronomic. Look the theme of 2011 was loss of confidence in Sam's ability, why isn't the rebellious drunken pleasure cruse priced into bond markets? In the last few years the performance legitimacy of liberal democracy has fallen though the floor, we have the largest debt loads since WW2, bond yields in the US and UK are absurd. Financial markets are absurd, but they have a habit of suddenly waking up and being absurd in the other direction. People know it's a hot air trade, and hot air trades are at constantly risk of springing a leak and then bursting. Neither UK nor US democracy has any interest in the morality of sovereign bonds, default is the easy way out and democracy always takes the easy path, so anything becomes possible in terms of socioeconomic and geopolitical change. Hurricane Katrina style looting or London burning riots could trigger a cataclysm, as could all sorts of other unexpected events such as an oil price spike, a trade war, bird flue, earthquake etc. The point I am trying to make is that the bond markets are an accident waiting to happen, and this looks like an accident prone year.

Of course I am just talking possibilities and long term future, I am not suggesting Armageddon in 2012 is an odds on bet. Today I am a philosopher looking into the heavens, once I was a good "quant" who specialised in proprietary statistical arbitrage, I always dreamed of becoming a great macro punter, but I failed because good punters have to think short term not long term. By the time my predictions had come true I had usually gone bankrupt trying to back them! Nevertheless, I am going to have a punt this year. I think it is worth selling UK Government Bonds. I remember twelve years ago the UK stock market making at high in quiet trading on the last day of the year, or at least that's how I remember it in my poetic memory, and I bought some FTSE100 futures and realised what a total fool I was just a week or so later. The US stock market made its heights in March 2000, but I think fate sometimes has poetry, and I wouldn't be surprised to see the UK Gilts reach their best levels tomorrow Friday the last trading day of the year just as stocks did twelve years ago, and I for one intend to have a punt and sell some 10Y Gilt Futures tomorrow and see what happens in 2012. I have an old friend who works at HSBC and he said I need a two big figure stop, and he will email me on Friday when it feels like the high. He's a smart guy, and we used to do some great trades in the UK bond markets together many years ago, and he agrees betting on the fall of Gilts next year seems like a good idea, and two pairs of eyes are better than one. I shall run the trade until I am stopped out, or until 2014.

So that's my quick and raving analysis. This web site is a sort of diary; but it's also a way to reach to out, without a track record who is ever going to take an interest in my philosophy? Philosophy is like trading, people want to see results even if the best philosophy is silent and secret and conducted by the elite. I have given a lot of bold predictions on this web site, and one day I think they will lead to something and I will get the chance to teach philosophy and do my bit to turn the ship toward the light. Perhaps 2012 will be an important year for me too. Socrates loved Sparta, but he was an Athenian. When the worthless Athenians who later put him to death declared war on the Spartans, he fought for Athens against Sparta and was decorated for bravery. In the same way I am a Brit, but I love China. Although I despair at the state of my country and don't currently live there, one day I expect to go back to old Blighty and do my bit to turn my country around. Of course, I hope it won't be as a soldier during a war a few years before the country's annihilation, but rather as a philosopher helping to build prosperity.