Knowing what is essential. Pico Iyert on the “Joy of Quiet.”

In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them — often in order to make more time. The more ways we have to connect, the more many of us seem desperate to unplug. Like teenagers, we appear to have gone from knowing nothing about the world to knowing too much all but overnight.

[...]

“Distraction is the only thing that consoles us for our miseries,” the French philosopher Blaise Pascal wrote in the 17th century, “and yet it is itself the greatest of our miseries.” He also famously remarked that all of man’s problems come from his inability to sit quietly in a room alone.

Action implies time.

The thoughts of Iyert resonated so much with me that I thought I have to mentioned it here. And in parts it is about Economics (sort of); how you allocate and manage yourself, your attention, energy and so on. Your values. What means you use to attain chosen ends. Believes and meaning of your action and interaction with other individuals.

The one thing you can’t get back, is your time. The sand that is falling down from top to bottom in the hourglass. My and your time is scarce, so we have to economize.

So, what is essential for you?

Economic Collapse can be averted. But not the pain ahead …

… the pain of Stagnation in the West (incl Japan) [via de-leveraging, balance-sheet recession, deep structural change, re-balancing of the global economy, surplus labor, ...]

Why India is Riskier than China [, and why everyone watches Europe]

Today, fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. Asia’s developing and newly industrialized economies grew at an 8.5% average annual rate over 2010-11 – nearly triple the 3% growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession.

In one important sense, these concerns are understandable: both economies depend heavily on the broader global climate. China is sensitive to downside risks to external demand – more relevant than ever since crisis-torn Europe and the United States collectively accounted for 38% of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets.

Yet fears of hard landings for both economies are overblown, especially regarding China.

[...]

While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.

One obvious possibility today would be a disruptive breakup of the European Monetary Union. In that case, both China and India, like most of the world’s economies, could find themselves in serious difficulty – with an outright contraction of Chinese exports, as in late 2008 and early 2009, and heightened external funding pressures for India.

While I remain a euro-skeptic, I believe that the political will to advance European integration will prevail. Consequently, I attach a low probability to the currency union’s disintegration. Barring such a worst-case outcome for Europe, the odds of a hard landing in either India or China should remain low.

Seduced by the political economy of false prosperity, the West has squandered its might. Driven by strategy and stability, Asia has built on its newfound strength. But now it must reinvent itself. Japanese-like stagnation in the developed world is challenging externally dependent Asia to shift its focus to internal demand. Downside pressures currently squeezing China and India underscore that challenge. Asia’s defining moment could be hand.

UK and Europe (Brussels) is a dysfunctional marriage.

… the lead-up (fights) to the break-up will be ugly. But the thing is – this is not a marriage at all, well only half of it. Like a fraudulent marriage for a green card (USA). The food-fight is about some details in the prenups. It’s about an agreement which both try to change to their individual advantage (politically and economically). And both don’t like what the other has in mind.

Economist Intelligence Unit Talks 2011 and 2012

RIP Vaclav Havel “Living in Truth.”

A person dearest to their heart has left the Czechs & Slovaks.

Thousands of Czechs braved the freezing cold Monday in Prague to pay their respects to former President Vaclav Havel, who died Sunday at age 75. Judy Woodruff discusses the extraordinary life of the writer, dissident and president with former Secretary of State Madeleine Albright.

 

When the System is afraid of you, they put you away. Déjà vu Julian Assange, Bradley Manning, …

More from BBC here, from Jeffrey Sachs here, and from The Economist here.

Some original words of wisdom from Václav Havel:

“Of course, in politics, just as anywhere else in life, it is impossible and it would not be sensible always to say everything bluntly. Yet that does not mean one has to lie. What is needed here are tact, instinct and good taste.” (Václav Havel, International Herald Tribune (29 October 1991))

—

There are no exact directions. There are probably no directions at all. The only things that I am able to recommend at this moment are: a sense of humour; an ability to see the ridiculous and the absurd dimensions of things; an ability to laugh about others as well as about ourselves; a sense of irony; and, of everything that invites parody in this world. In other words: rising above things, or looking at them from a distance; sensibility to the hidden presence of all the more dangerous types of conceit in others, as well as in ourselves; good cheer; an unostentatious certainty of the meaning of things; gratitude for the gift of life and courage to assume responsibility for it; and, a vigilant mind.
Those who have not lost the ability to recognize that which is laughable in themselves, or their own nothingness, are not arrogant, nor are they enemies of an Open Society. Its enemy is a person with a fiercely serious countenance and burning eyes. (Address upon receiving the Open Society Prize awarded by Central European University (24 June 1999))

Incentives do not improve performance of cognitive skill function.

Autonomy, mastery and purpose (of the employee) do increase performance of cognitive skill function.

European Sovereign Debt (& Banking) Crisis is the longest funeral ever.

Tommy Tiernan is a Irish comedian, actor and writer.

Problem I have is that it is really that big of a problem, that even the best joke doesn’t help to laugh it off. The pain is still there.

A Super Committee that dithers and sees no urgency.

… A Super Committee (Politics) with no courage and that is not in touch with real people and the crisis exhausted majority.

The blunt and offensive failure, out of principal, means two more years of uncertainty. A let down on the theme ‘investing in America’ as the terms about the future remain unknown. Because Forbes 500 companies and the odd SMB don’t know the future terms of business in America, and how to compete against BRIC’s and frontier markets – long-term investments and strategic investments are withheld further or done elsewhere. Period.

The Super Committee, Congress, Senate and the White House just played foul, and American’s (employers and employees) go head-held-low home.

Sorry, but my Generation feels “the F-Word”!

The Anatomy of Global Economic Uncertainty by Mohamed A. El-Erian

The sense of uncertainty prevailing in the West is palpable, and rightly so. People are worried about their futures, with a record number now fearing that their children may end up worse off than them. Unfortunately, things will become even more unsettling in the months ahead.

[...]

It is no coincidence that all of this is happening simultaneously. Each development, and certainly their occurrence in tandem, points to the historic paradigm changes shaping today’s global economy – and to the anxiety that comes with the loss of once-dependable anchors, be they economic and financial or social and political.

Restoring these anchors will take time. There is no game plan as of now, and historic precedents are only partly illuminating. Yet two things seem clear: different countries are opting, either by choice or necessity, for different outcomes; and the global system as a whole faces challenges in reconciling them.

[...]

Calls for a fairer system will not go away. If anything, they will spread and grow louder. The West has no choice but to strike a better balance – between capital and labor, between current and future generations, and between the financial sector and the real economy.

This leads to the final variable, the role of politicians and policymakers. It has become fashionable in both America and Europe to point to a debilitating “lack of leadership,” which underscores the extent to which an inherently complex paradigm change is straining traditional mindsets, processes, and governance systems.

Unlike emerging economies, Western countries are not well equipped to deal with structural and secular changes – and understandably so. After all, their histories – and certainly during what was mislabeled as the “Great Moderation” between 1980 and 2008– have been predominantly cyclical. The longer they fail to adjust, the greater the risks.

Those on the receiving end of these four dynamics – the vast majority of us – need not be paralyzed by uncertainty and anxiety. Instead, we can use this simple framework to monitor developments, learn from them, and adapt. Yes, there will still be volatility, unusual strains, and historically odd outcomes. But, remember, a global paradigm shift implies a significant change in opportunities, and not just risks.

Mr El-Erian isn’t the only one calling the bluff, … Stiglitz, Krugman, Rosenberg, Koo, Reinhard, Rogoff, Ferguson, …

(Book) Currency Wars: The Making of the Next Global Crisis

Tangent’s Rickards Discusses New Book ‘Currency Wars’ (Audio) – Nov 15, 2011 [MP3 Link]

James Rickards, senior managing director of Tangent Capital Partners, talks about his new book, “Currency Wars: The Making of the Next Global Crisis.” Rickards speaks with Bloomberg’s Sara Eisen and Michael McKee on “Bloomberg On the Economy.”

The Coming Paper War

Basis: Excessive Debt.
Possible Solution: (1) Massive Growth. But not possible because of structural problem etc.  (2) Net-Exports. But not everyone can export. Except you are able to export to Mars. (3) Default. Problem is that if everyone does it one at a time, the world economy would face more than one lost decade.
Stealth Solution: Devalue your currency via heightened inflation of long-term. Problem: Not every debtor can devalue their currency at the same time (GBP, USA, EUR). We sit all in the same glass house (world trade, world economy, foreign direct investment, savings, consumer). Further, high inflation is hard to get back into lower territory (see USA 1970′s) and you have to hike interest rate so high that a recession is unavoidable.

‘Without growth, use inflation. Either planned, or by chaos.’

‘Loss of confidence in fiat currency (paper money) = higher Gold price.’

Possible Outcome: (1) Creation of a Multi-Polar Currency as reserve currency (a basket of currencies). (2) Or use SDR (Special Drawing Rights) as reserve currency. (3) Or some sort of Gold backing as anchor (variable one). (4) Or chaos by denial, wishful thinking and kicking the can down the road.

Result: Lot’s of headaches.

‘Fed [Federal Reserve] is playing a linear game in a non-linear world.’

‘Complexity theory: Small changes can have fast and unexpected outcomes. Especially in our complex, interconnected, unstable world.’

The Economist’s current assessment of the situation (video).