Vastly Worse than the 1930's Taleb says

[jtabeb]

http://www.bloomberg.com/apps/news?p...BRc&refer=asia

Hat Tip to Jesse's Cafe American


( I couldn't agree more)



[May 7 (Bloomberg) -- The current global crisis is “vastly worse” than the 1930s because financial systems and economies worldwide have become more interdependent, “Black Swan” author Nassim Nicholas Taleb said.

“This is the most difficult period of humanity that we’re going through today because governments have no control,” Taleb, 49, told a conference in Singapore today. “Navigating the world is much harder than in the 1930s.”


Gold, copper and other assets “that China will like” are the best investment bets as currencies including the dollar and euro face pressures, Taleb said. The IMF expects the global economy to shrink 1.3 percent this year.]

[don]

Re: Vastly Worse than the 1930's Taleb says

This is not, however, a Black Swan Event. It's a predictable, systemic breakdown.

[ax]

Re: Vastly Worse than the 1930's Taleb says

This is not, however, a Black Swan Event. It's a predictable, systemic breakdown.

No, but I believe it's Taleb's first endorsement of gold.

[santafe2]

Re: Vastly Worse than the 1930's Taleb says

The current global crisis is “vastly worse” than the 1930s because financial systems and economies worldwide have become more interdependent, “Black Swan” author Nassim Nicholas Taleb said.

“This is the most difficult period of humanity that we’re going through today because governments have no control,” Taleb, 49, told a conference in Singapore today. “Navigating the world is much harder than in the 1930s.”

I like Taleb. He's a smart guy and has helped me become a better investor. That said, the above statements are embarrassing. There is so much excess comfort that the world can strip away before it reaches a pre-1930 level that it's not likely we'll ever get there. To refer to this as "vastly worse" revels his worst side. The government is not humanity.

And, as if the above was not bad enough, he expounds upon his thesis, and shines a light on the paucity on his thinking. "The most difficult period of humanity...".

At his worst, Taleb is a complete whiner. Sometimes I wish I could just shake him and make him grow up.

[flintlock]

Re: Vastly Worse than the 1930's Taleb says

I like Taleb. He's a smart guy and has helped me become a better investor. That said, the above statements are embarrassing. There is so much excess comfort that the world can strip away before it reaches a pre-1930 level that it's not likely we'll ever get there. To refer to this as "vastly worse" revels his worst side. The government is not humanity.

And, as if the above was not bad enough, he expounds upon his thesis, and shines a light on the paucity on his thinking. "The most difficult period of humanity...".

At his worst, Taleb is a complete whiner. Sometimes I wish I could just shake him and make him grow up.

X2. Same thoughts I had. A lot of lifestyle to unwind from before we get to the level of the Great Depression. And to say "the most difficult period of humanity" shows no knowledge of history. I think he meant to say modern history, but that is still probably an exagerration. I don't doubt it will FEEL like that for those who were used to a life of mall shopping, iphones, and luxury brand cars.

That said, some segments of the population are already living close to a 30s level depression era lifestyle. But for most, no.

[ricket]

Re: Vastly Worse than the 1930's Taleb says

X2. Same thoughts I had. A lot of lifestyle to unwind from before we get to the level of the Great Depression. And to say "the most difficult period of humanity" shows no knowledge of history. I think he meant to say modern history, but that is still probably an exagerration. I don't doubt it will FEEL like that for those who were used to a life of mall shopping, iphones, and luxury brand cars.

That said, some segments of the population are already living close to a 30s level depression era lifestyle. But for most, no.

It seems that your views are mostly skewed by events isolated in the United States. While we seem to be faring the downturn better than most (at this time), I believe that it is hitting other countries much harder. Back in the 1930s, the world was much less globalized than today and I would suggest that perhaps this *is* worse than the GD1 in the fact that in GD1 the US and UK got hit pretty bad while the rest of the world fared better, but that for GD2 the situation is quite the opposite.

So while in the US the living standards havent declined drastically, I would posture that they have in many other parts of the world. I can only imagine how much worse things have gotten for all the 3rd world countries that were struggling even *before* the financial crisis...

[santafe2]

Re: Vastly Worse than the 1930's Taleb says

It seems that your views are mostly skewed by events isolated in the United States. While we seem to be faring the downturn better than most (at this time), I believe that it is hitting other countries much harder. Back in the 1930s, the world was much less globalized than today and I would suggest that perhaps this *is* worse than the GD1 in the fact that in GD1 the US and UK got hit pretty bad while the rest of the world fared better, but that for GD2 the situation is quite the opposite.

So while in the US the living standards havent declined drastically, I would posture that they have in many other parts of the world. I can only imagine how much worse things have gotten for all the 3rd world countries that were struggling even *before* the financial crisis...

I don't think that's a defensible position. It was a world wide depression and the average person in China, India, Russia, to name three is much better off now than they were prior to the Great Depression much less during or after the Great Depression. Sixty years of relative stability in the world has served humanity well. Some think too well, but that's a discussion for another day.

[ricket]

Re: Vastly Worse than the 1930's Taleb says

I don't think that's a defensible position. It was a world wide depression and the average person in China, India, Russia, to name three is much better off now than they were prior to the Great Depression much less during or after the Great Depression. Sixty years of relative stability in the world has served humanity well. Some think too well, but that's a discussion for another day.

I think it depends on your definition of "better off". I think during GD1, a much higher percentage of the world population was self-reliant and were not dependent on outside technology, credit, or social systems to provide the basics of survival to them (food, shelter, health). This was due in part to a smaller world population combined with much less industrial capacity, and so people had to literally provide for themselves or die. Thanks to modern technology, you are correct that they are much better off, yet I also argue that they are much more vulnerable to any major shifts in that standard of living.

Say the US economy completely collapsed today and food ran out at grocery stores and people had to start growing their own food or literally starve to death (ignore the social chaos that would ensue and assume they had a month or two of food to get them through the first growing cycle). What percentage of people *today* do you think would even know where to begin and/or have the tools to start farming vs in the 1930s? I would argue that more people today would be "royally f****d" compared to GD1. Thus, they are much more vulnerable to the shifts in the economy and thus in fact, we *are* much worse off in this depression than in the first go around.

[touchring]

Re: Vastly Worse than the 1930's Taleb says

I think it depends on your definition of "better off". I think during GD1, a much higher percentage of the world population was self-reliant and were not dependent on outside technology, credit, or social systems to provide the basics of survival to them (food, shelter, health). This was due in part to a smaller world population combined with much less industrial capacity, and so people had to literally provide for themselves or die. Thanks to modern technology, you are correct that they are much better off, yet I also argue that they are much more vulnerable to any major shifts in that standard of living.

Say the US economy completely collapsed today and food ran out at grocery stores and people had to start growing their own food or literally starve to death (ignore the social chaos that would ensue and assume they had a month or two of food to get them through the first growing cycle). What percentage of people *today* do you think would even know where to begin and/or have the tools to start farming vs in the 1930s? I would argue that more people today would be "royally f****d" compared to GD1. Thus, they are much more vulnerable to the shifts in the economy and thus in fact, we *are* much worse off in this depression than in the first go around.

The depression has barely started. don't u trhink it's too early to make a judgement?

[Starving Steve]

Re: Vastly Worse than the 1930's Taleb says

The depression has barely started. don't u trhink it's too early to make a judgement?

We have people here on Vancouver Island that are now just eating soup broth and rice to survive. And the government here in British Columbia is so out-of-touch that they are letting BC Hydro double electric rates starting this summer. So add another $100 per month to the cost of living. And ferry fees are up $20 per car. And grocery prices are up 9.5% so far this year according to Statistics Canada, nationwide.... This is what we are up against, so I don't think it is too early to make a judgement. What is going on here on Vancouver Island is going on in other ways all across Canada and America. Things are so bad now that even life in Mexico looks better than this, and this economic tragedy, apparently, is just the beginning of what we are facing.

There is a solution to this: going onto the gold standard in every country. Paying-down deficits everywhere. Rewarding savers with real interest rates. And to solve the energy crisis which is part of this economic crisis, to build atomic power plants everywhere. Natural gas has to be better developed, especially here in British Columbia. Heavy oil has to be better developed in Alberta. And drilling for offshore oil has to be undertaken all along the coasts of Canada and America.

One thing is crystal clear now: These so-called economists like Alan Greenspan know nothing at all about economics, and they have lead the world into an economic swamp deeper than the Great Depression. Printing paper money is no solution at all to economic depression.

[loweyecue]

Re: Vastly Worse than the 1930's Taleb says

I think it depends on your definition of "better off". I think during GD1, a much higher percentage of the world population was self-reliant and were not dependent on outside technology, credit, or social systems to provide the basics of survival to them (food, shelter, health). This was due in part to a smaller world population combined with much less industrial capacity, and so people had to literally provide for themselves or die. Thanks to modern technology, you are correct that they are much better off, yet I also argue that they are much more vulnerable to any major shifts in that standard of living.

Say the US economy completely collapsed today and food ran out at grocery stores and people had to start growing their own food or literally starve to death (ignore the social chaos that would ensue and assume they had a month or two of food to get them through the first growing cycle). What percentage of people *today* do you think would even know where to begin and/or have the tools to start farming vs in the 1930s? I would argue that more people today would be "royally f****d" compared to GD1. Thus, they are much more vulnerable to the shifts in the economy and thus in fact, we *are* much worse off in this depression than in the first go around.

I agree with this view. I think a significantly larger percentage of people are now within "the system", that is their wealth is being converted to currency and extracted and polarized. In the 1930s people had real assets like land and it couldn't just be taken away from them, now they have checking accounts and 401Ks.

As for being "better off" now, I would like to know how Sanatfe came to that conclusion.

[flintlock]

Re: Vastly Worse than the 1930's Taleb says

It seems that your views are mostly skewed by events isolated in the United States. While we seem to be faring the downturn better than most (at this time), I believe that it is hitting other countries much harder. Back in the 1930s, the world was much less globalized than today and I would suggest that perhaps this *is* worse than the GD1 in the fact that in GD1 the US and UK got hit pretty bad while the rest of the world fared better, but that for GD2 the situation is quite the opposite.

So while in the US the living standards havent declined drastically, I would posture that they have in many other parts of the world. I can only imagine how much worse things have gotten for all the 3rd world countries that were struggling even *before* the financial crisis...

Yes, talking about the US, guess I should have clarified that.

It really depends on which country you want to talk about, but I'd still think the average Chinese for instance, will be a lot better off in 2015 than they were in 1930. The farther you go back in time, the more the lot of the common people just gets worse compared to these days, regardless of boom or bust economic times. So history is not on Taleb's side in that regard. Prosperity for the masses is a relatively recent phenomena in history. Not saying things will be rosy, just that globalism has allowed "commoners" in many countries to accumulate some wealth they'd never had in their entire history. People in France may simply lose their car or sense of financial well being for instance, not their whole country to a Blitzkrieg. Not ruling out another war by the way, but so far that seems a lot less likely than in the 30s.

Just keeping in mind that while conditions in most "third world" countries may not have gotten that much worse during GD1, a lot of that may have had more to do with the existing low standard of living than anything else.

I take a dim view on globalism as practiced today by the way. I'm not against trade, just against any nation dismantling its manufacturing, farming, or any other industry it may need for survival someday in return for a cheap buck today. So be it a country in Africa over-relying on food imports, or the US over-relying on oil, I think its dangerous. So yes, I can see how some nations will suffer greatly in this depression. Especially if what it can no longer afford is food and not just cheap Plasma TVs.

[karim0028]

Re: Vastly Worse than the 1930's Taleb says

The major difference between now and the 30s is social security and welfare.... Those collapse and were fucked (30s here we come).... Other than that, people are people, laws of money, like the laws of physics are; well, laws... Economics is what it is, debt is debt, bubbles pop and nature will take its course... History never repeats exactly, but it sure as hell rhymes.

Just bc we have iphones and lattes doesn't mean its not gonna suck....

[touchring]

Re: Vastly Worse than the 1930's Taleb says

The major difference between now and the 30s is social security and welfare.... Those collapse and were fucked (30s here we come).... Other than that, people are people, laws of money, like the laws of physics are; well, laws... Economics is what it is, debt is debt, bubbles pop and nature will take its course... History never repeats exactly, but it sure as hell rhymes.

Just bc we have iphones and lattes doesn't mean its not gonna suck....

I think it is incredible to compare the 30s with the 21st century. in the 30s, almost everyone was riding horses and donkeys. Most of the third world countries don't even have a national telephone system. To pass a message, one will have to send a mail which takes a week or more, or ride a donkey that takes half a day. Today, even in the poorest African country, you can send an SMS using a post paid phone plan.

[santafe2]

Re: Vastly Worse than the 1930's Taleb says

I think it depends on your definition of "better off". I think during GD1, a much higher percentage of the world population was self-reliant and were not dependent on outside technology, credit, or social systems to provide the basics of survival to them (food, shelter, health). This was due in part to a smaller world population combined with much less industrial capacity, and so people had to literally provide for themselves or die. Thanks to modern technology, you are correct that they are much better off, yet I also argue that they are much more vulnerable to any major shifts in that standard of living.

Say the US economy completely collapsed today and food ran out at grocery stores and people had to start growing their own food or literally starve to death (ignore the social chaos that would ensue and assume they had a month or two of food to get them through the first growing cycle). What percentage of people *today* do you think would even know where to begin and/or have the tools to start farming vs in the 1930s? I would argue that more people today would be "royally f****d" compared to GD1. Thus, they are much more vulnerable to the shifts in the economy and thus in fact, we *are* much worse off in this depression than in the first go around.

Thoughtful response, thanks. I hope the iTulip community takes this discussion a lot farther. It might not be as +/- as we, (I), think.