Economists Are Wrong – Crises Are Part of Our Economic DNA

22.09.2017 • Switzerland

Henry Bonner – Strategy and Council Letter (Switzerland) –

Complications … waiting … delay … Like a storm or a hurricane, the danger on the economy – on our way of life – hovers, amplifies, seems to disappear, returns, drags on, or evaporates …

Signals contradict each other and intertwine … analysts despair … observers scratch their heads … but all watch actions, cryptos, and real estate climb … The growth in asset prices was the concern and the doubts …

One day, perhaps, the sky will eventually fall on our heads … but today’s world is sleeping with both ears on the pillow.

Apart from the sparks of conflict here and there, especially because of the US efforts to make the world police … or the hurricanes of the summer on the Caribbean, and the Gulf of Mexico, few people ‘worried …

With rising asset prices, expansion of credit amount, and the release of an iPhone generation every 12 months, the world takes on an air of invincibility …

With Facebook and Google interconnection, the power of computers at your fingertips with smartphones, and ongoing revolutions to give intelligence to machines, or change the genome of humans, the possibility of a decline between not even to people’s minds.

On the contrary, most students leave school with the safety of making a billion – or at least millions – of euros with a start-up in the field of computing.

Crises, declines, for the generation of today, has a mythical character … like a dragon or a sphynx …

Out-of-school students think of crises like computers of the 1940s … or the art of managing the sickle … They have a hard time understanding the importance … nor how the humans of yesteryear managed to do with.

They believe in their invincibility … and the invincibility of the world around us …

Belief in a future of stability and prosperity even has an impact on birth rates … marriage rates … and lifetimes.

Young people today postpone relationships … spend less time on the pursuit of a husband or wife … and see a cloudless horizon for decades to come …

According to sociologists, prosperity and security tend to slow down decisions about marriage, the purchase of a home, or the creation of a family …

Conversely, in an environment of deprivation or violence, humans tend to seek more safety right away … They expect less to mate and make children.

Women begin to have children at age 28 on average in France … at 29 years in Denmark … and in the United States at 26 and a half …

These countries lead the world in per capita wealth …

Conversely, in Chad, women start giving birth on average at 17 … in Guinea, they give birth at 18 … and in Afghanistan at 19 …

As in the life of the individual, the life of the economy changes according to the conditions … stability and security allows to postpone debt repayment … to live on credit … and take more risks and make more bets …

… But Corrections Follow Always …

Today’s economists criticize growth by “blows …” with ups and downs … periods of growth, and corrections.

For them, these relapses have no use in particular … They arise due to “dysfunctions” in the system. The economist sees himself as a protector of the prosperity of the 21st century … by manufacturing growth without retreat.

The history of economies, however, seems to deny any claim to control them … Programs to manufacture growth, or create an industry, or accelerate innovation, never bear fruit …

Savings are not part of the world of technology and innovation …

IPhones, computers, and GMOs meet needs or demand … They serve as tools for humans.

Economics, unlike the beliefs of economists, does not serve as a tool … Economies have no purpose or destination.

Like markets, the savings represent an assessment of the use of resources in a society …

No computer or algorithm can know the utility of an innovation or a product for humans … Only individuals can know … and they express it through their decisions, through transactions.

Growing economies generally reflect an increase in the availability of resources in a society … and meeting needs … The volume of transactions is increasing. The increase in the availability of resources, and in the efficiency of their use, also makes it possible to bear more debt … to undertake more projects and to carry out more tests.

Progress releases more resources … by allowing more people to live and feed … and by meeting their needs – feeding, housing, or other – without spending their days cutting wood, hunting, or working a field. Each generation can avoid many of the misconceptions of its ancestors – sickness, difficulty moving or eating, or the limits of man’s physical strength to perform tasks.

The ropes and levers … horses and oxen … the windmills … and then the combustion engines have made it possible to go beyond the limits of the physical of the man.

Computers have made it possible to multiply its skills of analysis of data … and its computing or memory …

The Internet has made it possible to bring down many obstacles because of distance, geography, or language.

Ethereum wants to “disincorporate” the computing power of the world … and we are still waiting to see how this project will impact our way of life …

These Cryptos Could Ruin You … But Maybe the Game Worth The Candle …

Here we always keep an eye on the sky …

Economists are wrong … Crises will continue to occur … They are part of the DNA of economies. Like innovation and the division of labor, they have enabled the world today to be formed …

Despite this, history also teaches us optimism … Because the gasoline engine has eliminated famines and shortages. Internet enabled us to write to you today.

When the engines first started to spread, most people probably had little confidence in their abilities …

“They will never replace the horse and the plow,” they said to themselves.

Cryptos could ruin you if you bet too much … No one knows their future.

At the moment, these currencies explode … The creator of ethereum, Vitalik Buterin, claims to have invented a “computer.”

Perhaps he is wandering … or perhaps his invention marks the beginning of an era.

It’s up to you to decide if you want to take the risk of seeing whether it is right or not.

We have developed cryptos information to help you soak your feet. Check them out to get started in the area .

-Read more at www.lettre-strategie-conseil.com (French)-

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