As the Thread Unravels

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No discernible New Year’s Eve hangover for the markets, Fellow Reckoner. The Dow, like those insufferable individuals seen jogging early on Sunday morning, has put in a chipper performance. The same could not be said of your managing editor, however, who allowed himself to be talked into more celebrations than were probably necessary.

Perhaps it was a subconscious effort on our part to avoid the great disappointment in the life of one John Maynard Keynes. It is said that the (in)famous economist and investor remarked on his deathbed, “my only regret in life is that I didn’t drink enough Champagne.” An admirable lament, to be sure…and a clear lesson for the rest of us.

Let us therefore resolve not to repeat the mistakes of Mr. Keynes, neither by the over consumption of his economic theories nor through the negligent under consumption of bubbly libations.

New Year’s resolutions now out of the way, we are left wondering what to make of this coming stretch in front of us. It’s the beginning of a new chapter in our Gregorian calendar…and, we’ve heard, the beginning of the last chapter of the Mayan calendar.

What will the year bring us? To another New Year’s Eve party…or to the destruction of heaven and earth and everything in it? And how best are we to make use of the intervening time?

Instead of losing ourselves in the increasingly granular interplay between the world’s governments and the markets they affect to save and to serve, we are going to take a step back today, to start from the beginning. Forests are so often lost in trees, after all, the majesty and grandeur of the universe ignored for a single star.

On many of life’s big questions, we remain firmly, surely, absolutely and positively in the agnostic camp. Only the degree of agnosticism varies. With such a long and celebrated list of mistakes behind us, how can we be totally sure of anything? An example: The world was considered flat for a very long time before it was “discovered” to be round. And even then people weren’t sufficiently sure – or able – to put their sailing vessels where their brave hypotheses dared to venture.

Hellenistic astronomy established the spherical shape of the earth as a physical given around the 3rd century BC. Not for another 1800 years, give or take, did Juan Sebastian Elcano’s circumnavigation (1519-1521) “prove” it beyond reasonable doubt. We expect that the flat earthers were pretty sure of their position. Maybe as sure as we all are about the “sphereness” of the earth today.

Moreover, agnosticism needn’t confine itself to earthly matters alone. We have the heavens to wonder about too, and the complex arrangement of the many workings therein.

Recently, as in this past September recently, the central tenet of modern physics itself was called into question. Until a bunch of sceptics got together to reckon on the nature of things and how they work, it was thought that nothing in our known universe could travel faster than the speed of light, 299,792 km/s (186,282 miles per second), not even – as the term implies – light itself. That barrier was thought to be a kind of celestial speed limit, the “c” constant in Einstein’s E = mc2.

An article in Universe Today reported the story back on September 22, the day the speed limit was said to have been bettered:

An international team of scientists at the Gran Sasso research facility outside of Rome announced today that they have clocked neutrinos traveling faster than the speed of light. The neutrinos, subatomic particles with very little mass, were contained within beams emitted from CERN 730 km (500 miles) away in Switzerland. Over a period of three years, 15,000 neutrino beams were fired from CERN at special detectors located deep underground at Gran Sasso. Where light would have made the trip in 2.4 thousandths of a second, the neutrinos made it there 60 nanoseconds faster – that’s 60 billionths of a second – a tiny difference to us but a huge difference to particle physicists!

You see what happens when you begin pulling on a thread, Fellow Reckoner? Yank it for long enough and, before you know it, the fabric of the entire “known” universe unravels like a scarf knitted from spaghetti.

You remember what happened when people began pulling on similar threads last year, don’t you? Individuals began to question the nature of the world around them, particularly their political world. It began, as you’ll recall, in the tiny North African nation of Tunisia…

Mohamed Bouaziz probably wasn’t looking for his government to honour him with a postage stamp when he self-immolated in December of 2010, an act that would eventually end his life, the final stretch of which he spent in a coma, in the early days of January, 2011.

The 26-year old street vendor was protesting the harassment and humiliation inflicted on him by local municipal officials and their confiscation of his wares. Leave it to the government to hijack a tragedy prompted by their own insidious meddling for the purpose of aggrandising the state.

This lamentable irony notwithstanding, Mr. Bouaziz’s act set the stage for perhaps the most widespread social upheaval in the region in modern times. Beginning in Bouaziz’s home country of Tunisia, revolutions – largely of the open source variety – spread south and east through Libya and Egypt, where, with the overthrows of Muammar Gaddafi and Hosni Mubarak, a combined half century of brutal, US-backed, dictatorship was ended.

The revolutions in Tunisia and Egypt and the civil war in Libya were followed by civil uprisings in Bahrain, Syria, and Yemen, the latter resulting in the resignation of the Yemeni prime minister, major protests in Algeria, Iraq, Jordan, Kuwait, Morocco, and Oman.

There were also minor protests in Lebanon, Mauritania, Sudan, and Western Sahara. And, not insignificantly for that portion of the world heavily dependent on the use of relatively cheap, easily accessed, high quality crude oil, the House of Saud also learned of a seething, if only nascent, revolutionary spirit resting just below the surface.

Freedom is a catchy tune, we observed during the midst of the spreading unrest. Once you get it into your head, it’s hard to get rid of…not that you’d want to. From the aforementioned (and ongoing) Arab Spring through to the swiftly quelled Jasmine Revolution in China, 2011 began to take shape as the “Year of the Revolution.”

The sentiment travelled at the speed of light – whatever relevance that now has – to Europe, where unemployable graduates, jilted retirees and everyone besides gathered in capitals across the continent to protest backdoor bank bailouts, austerity programs and the general looting of the masses by the political class, many of whom they themselves elect.

Not to say there wasn’t also plenty of looting perpetrated by the masses themselves. From Syntagma Square in Athens to Tottenham Square in London, rioters tested their strength of numbers against police forces demonstrably unable to keep pace with the new reality of “flash riots” and the advanced, open-source techniques they utilised to assemble and disperse before Ol’ Bill could get a grip on the unfamiliar situation.

The world marched forward, literally, to October’s “Global Day of Rage,” where the cheated and the scammed coalesced from Tokyo to Zurich and in cities across more than 80 countries around the world to vent their anger and the world as they know it. But that world might just be coming to an end anyway, a global morphing of the kind even the Mayans couldn’t imagine. More (much more) on this to come…

Publisher’s Note: Joel Bowman is the Managing Editor for The Daily Reckoning US (www.dailyreckoning.com)

Joel Bowman
Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
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JB: “You see what happens when you begin pulling on a thread, Fellow Reckoner? Yank it for long enough and, before you know it, the fabric of the entire “known” universe unravels like a scarf knitted from spaghetti.”

Or, as Annette Funicello (1968), misquoting Francis Thompson (1859-1907) quipped: “You cannot pluck a flower without the troubling of a star…”

Perhaps she’d spotted a passerby souveniring her roses. ;)

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