Monthly Archives: September 2011

“Financial Reckoning Day Fallout” Excerpts

"Financial Reckoning Day Fallout" tells us how to survive today's global depression and it does so by helping us understand that the "enemy" is us...how we think...what we believe.  We have embraced lies when the truth is available....but the change starts with you - individual you. Join me on Facebook at "Epiphany Financial" to dialogue about the book. "Cogito, ergo sum” (I think therefore I am), wrote France’s most famous philosopher, Rene Descartes. The proposition was self-evidently absurd….Descartes’ self-centered assertion is an invitation to trouble, for it flatters our self-confidence and lures us to destruction. (p.34) Information out of context is useless. (p.36) Today the Internet, though ultimately just a means of communication, delivers an almost infinite number of facts and fictions. The tough part – the “Intelligence” work – is sorting them out. (p.37) As processing information takes time and effort, the more of it you have to deal with, the more likely you are to seek shortcuts. Popular interpretations offer a substitute for careful reflection or observation. In other words, instead of actually figuring things out for themselves, people become more susceptible to collective thinking. Public thinking replaces individual thinking – simply because there is too much information to process. (p.49) Never before was it possible for so many people to share so many bad ideas all at once. Thanks to progress in communications, men and women were drawn to group thinking like moths to a flame. Soon, they were talking all sorts of nonsense and making their own lives miserable with wars and upheavals that contributed nothing to their well-being other than being a distraction from their personal problems. (p.60) Groupthink is popular because it is easier than private thinking and the stakes are lower. A man’s public attitudes are buttressed by others, held up by the media, and reinforced by constant repetition. His private thoughts, on the other hand, are fragile, lonely, and often desolate. He cannot even get his own children to clean up their rooms or his wife to agree to his family budget; who can blame him for wanting to tell other what to do? (p.154) The madness of crowds has two important features.  First, crowds can only know things in their crudest, most dumbed-down form. Since the truth is infinitely complex, it follows that what a crowd thinks is almost always reduced to a point where it is more lie than truth. Second, though the same emotions beset individuals as well as crowds, a man on his own rarely causes much trouble. He is restrained by family, friends, and the physical circumstances. A crowd, on the other hand, so magnifies his emotions and so corrupts his ideas that son the whole society is on its way to hell. (p.276) The majority thought it was entitled to a retirement it had not earned, government programs it did not want to pay for, and a lifestyle it could not afford. The United States’ majority expected its leaders to “do something” to make sure they got what they expected, instead of what they had coming. (p.277) …the boomers were subject to the madness of crowds on a monumental scale. The boomers adopted every idea that appealed to them and dumbed it down…broadcast it…vulgarized it….(p.331) Yet for the first time in U.S. economic history, the boomer generation was unable to live up to the living standards of its parents – let alone surpass them. In the 1980s, the boomers were turning middle-aged, and they should have been saving for retirement. Instead, they increasingly ran up debts. (p.333) The nature of the economy had gradually been switching to focus from production to consumption over the lifetime of the boomer generation. By the end of the 1990s, the trend had become grotesque, with 4.8 new dollars worth of credit and debt for every extra dollar’s worth of gross domestic product (GDP), 1997 to 2001….Americans confused capital gains with capital accumulation. (p.335) The more seriously they believed that buy and hold really worked, the more certain they are were to lose money. (p.343)