Is the Dymaxion Web is a single field theory? After all, intutition brings us beyond physics into the area of metaphysics. Even as web theory, the nolion that hypercommunication leads to better understanding, I am preparing to cut myself off the connection links and get out into the world. Essentialy, the dymaxion web depends upon knowledge and intution as well as our ability to communicate neuron-like across the newly frictionless web. And so I will travel for a couple of months, see things a little differently and, hopefully, overcome the absence of high speed connectivity. I plan to continue to report my thoughts several times a week, though through a dial-up connection here and there.
The fundamental forces won't change. For better or worse, we all live in an economic world calibrated, it seems, to the Amercian way of plastic: debt spending, hocked houses, consumerism, the dollar standard represented by an uninhibited printing press in Washington, the export of jobs from the US to Asia, etc; all that is part of a secular trend that appears destined to hold if only to be detoured by a major (tetonic) shift.
Making preparations for the trip have held up my piece on Andy Grove's thinking as rrelated to the group in Washington but I promise to get that report done, though probably not after my Halloween in the south of France not too far from the Spanish border.
As promised, I'm presently working on "Skunk at the3 Garden Party ---Andy Groveís Warning" A look at the backward flowing braindrain. I'm hoping to hear from Valley and Intel watchers.
Linux is to Gold as ............................
From an investing perspective, the problem with gold is a little like betting all your marbles on Linux. For the simple reason that no matter how good the arguments might be, you are somehow going straight into the wind.
First, a little light on the yellow metal, that, by the way, I know a lot more about than I do about the stuff they call open source. If you've never hung out with anybody who's been to graduate school to study the dismal science (not the jumpingest bunch in anybody's book), you wouldn't know what funny looks you can get when you mention what, after all, has been treated like money for as far back as recorded records go, the shiny, yellow stuff. To these enlightened ones, gold is truly a relic, in the religious sense, left over from the altar of pagan rituals. Money, they will tell you, is anything that people believe is money. So if everybody believes that seashells are money, then buy what you will with seashells. After all, no one dared laugh at Caligula when he returned victorious from a campaign against the sea god Neptune and opened before the senate his spoils from the campaign, trunks full of seashells. Of course, that was the same Senate in which he made a horse one of its stellar members.
Thus, hardly anybody in that august community batted an eye when Richard Nixon cut the final link between the greenback and gold back in the early 1970's. At which time, he was quoted as saying, ďWe are all Keynesians now.Ē The dollar, as we all know, is backed by the full faith and credit of the US government. And dollars to doughnuts, if things started collapsing all around us, the place investors from all over the world would rush to stow their hard-earned pesetas, would be in US T-Bonds. That kind of behavior in the face of massive deficits Ėthatís when the government spends more than it takes in and makes up the difference by simply printing more bills-- is a compelling argument that tends to overwhelm all but the most obtuse.
Further, our dismal practitioners argue, where would the modern global economy get the liquidity (money) it needs to sustain the growth that's required? Must countries wait until somebody strikes it rich in nuggets before they can issue more money? Better, they imply --because that's the way it is-- to let one country print as much money as anybody needs as long as it continues to be the engine that propels the very world economy we all want to see expand. And so, the US gets a special kind of pass. We print them and the rest of the world takes them (reminds me of the sign on the bridge in New Jersey: ďTrenton Makes and the World TakesĒ.
Okay, that deal Ėnot the Trenton one which we all know is an anachronismó might seem a little unfair to the rest of the world, who have to live off of what they save but that's the way it goes. After all, who's got Wal-Marts every 10 miles and a bunch of worthy citizens who are willing to get up and out and fight their way into the aisles to buy whatever tchotckes catch their fancies?
By this time, if you've stuck with me, you're probably wondering what this has to do with gold or even more, if you're a techie, what the hell this has to do with Linux. Allow me a deep breath, a little more patience, and on I go: But first let's put the economists aside by appeasing them; when, by the way, since LTCM (Long Term Capital Management, a scientifically run hedge fund that almost brought down the world economy in 1998) did any of them make any money?
Gold, after all, is just a nice shiny metal with some very endearing and enduring properties. It used to be money but outside of a few coins that don't really circulate, it isn't really money any more. Judged by its track record over the last couple of decades, it's certainly not a good store of value. At one point in the 70's it was up over $700 an ounce (that's the way it's priced), which, if it had stored value properly, would make it worth approximately $3,500 an ounce in today's dollars (if you don't remember yourself, ask somebody what house's like yours cost back then).
Instead, gold has been in the doldrums trading last year in the $200's and most recently still pushing to get up to $400 an ounce. What's that all about? Has somebody found a way to synthesize it, like they have diamonds? Are there mines cranking it out of the ground all over the world at rates that exceed the industrial, medical and decorative demands for it? Answer to all three questions, a resounding nope!
Zohhh? What's wrong with the yellow stuff? First off, I have to admit that too many of us have gotten college educations and had to take economics 101. We know it's just a pagan holdover. But what about all those people who haven't been to college wearing all those weighty gold chains? Is Wal-Mart able to get its gold in China mined by guys willing to work for wooden nickels? Nope, try again!
By this time, if you are at all like me, you have probably started to wonder what's wrong with this picture. Either the spider in the dymaxion web is just shoving us a line of bull....., or there has to be another explanation. Conspiracy....? Did I whisper conspiracy? Nope, not this spider. Not that there aren't a bunch of guys out there who aren't, but I'm not convinced by them, at least not yet. But then again I haven't been in the trenches taking the salvos the way these guys have for the last couple of decades.
And this finally gets me a little closer to Linux. You see I am assuming that there are a lot of techies who read these submissions. And they know Linux and its plight a lot better than I do.
Here's the equation. Yes, gold is not money any more, at least technically! Most of us can agree on that. But it is a kind of special commodity, I mean when you compare it with something like flax seeds or pork bellies. It's not just any commodity. I hope we can all agree on that, too. It's shiny, itís rare, itís malleable, it can be easily melted down, it canít be synthesized, it doesn't corrode, and everybody treats it as something valuable that can be hocked no matter how old it is or where its been (I'm thinking about false teeth but take your choice).
But there are some interesting facts that have to be treated: First, yes, world demand is consistently higher than supply. There aren't a lot of mines out there sitting on the great mother loads and that have already committed to deliver based on options they wrote at last year's prices Ėthough, there were times during the long price drought when the latter was the case.. The stuff is hard and costly to extract and few are the mines in the world that can just step up production at will, even if they were foolish enough to want to dampen prices. Now, add to this the upsurge in the production of ever cheaper and thus more affordable electronic gear in places all around the far east where gold is a component. On top of that, think about all those newly minted disposable incomes in places like China and India where they still like gold jewelry a lot and where, some people at least, are still primitive enough to believe that gold, even as jewelry, stores value. Add to that, the Chicken Littles, who think the twin deficits are going to pull us all down with the dollar. You might surmise that demand for gold is rising pretty quickly; at least it certainly ought to be even further outstripping supply. So how come gold is still being priced in what look like early 1970's (before the bubble) prices?
And oh by the way, I forgot to mention, the biggest holders of gold in the world are the central banks of the most developed countries, including the good old US of A. We all know about Fort Knox, where they have tons of the stuff stored. Not to back the dollar, mind you, but they still store it. Maybe, after all, they are the flies in the ointment? Maybe, having concluded that gold isn't money they have also concluded that they should probably sell it while itís cheap and keep the price down, since they hold so much of it. Or maybe some of those other countries would rather sell their stashes rather than tax their citizens. That's pretty reasonable, given the need for politicians to get re-elected and gold teeth and all that.
But wait a minute, there is something called the Washington Accord --it was signed here in 1999-- that has all the major central banks, except the US Fed, agreeing to not sell more than a small amount of the stuff. So it can't be them being the party poopers, can it? In case, of course, you are thinking, Linux, Microsoft, gold, the Fed, voila', I get where he's going with this.
Let me clear my throat. According the Greenspan, I'm not sure when the last time he made this pronouncement, the Fed isn't selling off its gold either. Whew! Big sigh of relief! The Fed ain't selling either. Not them, not those pesky folks in Euroland, nobody is dumping to dampen.... so, why isnít everybody jumping in to buy the bloody stuff?
Before I get off this, I have to talk a little about currency devaluation. A lot of people say they don't care if their money buys less wine in France or sushi in Japan. If a cheaper dollar keeps jobs here and makes it easier to sell US goods abroad, then it's practically painless. Next vacation, why I'll head for someplace in the dollar zone, say Venezuela. And so what used to be worth 1.20 Euros a year or so ago is now worth around .80. Iím talking about the dollar, of course, and the same goes for the dollars value in Japanese Yen. And yet our leaders are out there trying to push the Japanese and Chinese to raise their prices by cheapening our dollar even further (store of value, anyone?). Who cares if prices go up 20% in Wall-Mart?, they ask. That will get us all excited and we'll just spend more, heating up the economy by inflating, they say! And, in case you havenít heard, inflation is good. It stimulates us to act now before our money buys even less.
If all this manipulation begins to sound somewhat diabolical. Believe me, Iím not making it up!
Okay, had to get that off my chest.
Linux: here goes, sorta. The dollar is the standard. Everybody takes it, even if it has a few bugs, especially on the security side. Half a trillion internal debt, half a trillion trade deficit: Don't worry we will just keep issuing fixes, weíll make the other guy pay more. For starters we will just let our biggest customers know that even if they think about switching to some other system (is Finland in the Eurozone?) they will pay a pretty price. We won't let them know exactly what upgrades (read, devaluations) are in store down the pike. Further, we'll create some secret code (derivatives, in this case) that nobody understands and make sure they are so deeply embedded in the source they canít be extracted. You want to travel anywhere to do business, your passport better confirm to the standard we set, otherwise you can't even pass through our domain. You want to sell your oil, you'd better price it in dollars or who knows, you might see a cruise missile or two before you get a chance to duck.
All to say, folks, the dollar is the standard, gold isnít. And having the dollar as a standard benefits all those who would spend now and pay later and those who sell to them. At least, for now, in the latter case. So the next time you think about putting your hard-earned tintbacks into the yellow shiny stuff, remember, there's more to this equation than meets the eye.
Please note email contact change: firstname.lastname@example.org
I welcome your feedback
Upcoming: Linux and Gold, What's the Connection?
Dyamaxion Web: What Is It?
The concept (unlike the name, which is a local invention) behind the Dymaxion Web is far from entirely original to this writer but like most current disruptive phenomena, requires constant revisiting and rethinking. First, the term dymaxion was coined by a contributor to the web continuum (creative iconoclasm transcends time and space ), Buckminster Fuller, an energetic and original thinker best known for his invention of the geodesic dome. With his domes, inspired by structural principles found in beehives, Fuller broke with traditional architectural structure. What he advanced in building, as he moved structural physics beyond the arch, is that the sum of the whole is an order greater than that of its individual members.
The web, of course, is also an ingenious, efficient design taken straight from nature; it was, after all, first evolved in nature to withstand errant forces and then transferred to the communications realm to survive a nuclear attack.
In communication, the paradigm shift Ėnow thereís a good echo from the 90ísóinherent in our Web, is one of the enormous extensions or freedom from the molecule. The author of the Bucky Ball, the Dymaxion man, himself, would have appreciated that! What we are talking about is the supreme lightness and freedom from friction of bits and bites, Xís and Oís, zeros and ones. No more stone or clay tablets, no more paper, no more movable type; just speed-of-light movable bits and bytes flowing around the globe like slide of hand. Each day our pixelated screens effortlessly fill with thoughts piped in from all over the globe.
Even as I turn over in rugged or sweet dreamland someone in Paris or London or Hong Kong is thinking out loud through his fingers; in essence extending my own thought power. By the time Iíve got past the foam on my first cappucino of the day, the fruits of other peoplesí labors or epiphanies have fed into my gray matter.
Dymaxia, my home country, then becomes a node in that web. It will, if successful to its purpose, extend the ken of all whom it touches. For some, it will just barely catch the periphery of their sphere of interests and for others it will hit the soft spot, the place where they are concentrating their own perceptive forces.
Dymaxia will be, by the phlegmatic nature of its author, a rather full stop on the contrarian underground railroad. It will, however hopefully, have a civilized, even playful tone; but it will be a shout in the dark against the kind of high up economic and financial manipulation and tomfoolery that seems to have contrived to turn us into a nation of borrowers, spenders of other peopleís money, mindless consumers of other peopleís goods. No, not as a moralizer but perhaps as a preoccupied observer curious and deeply worried as to where it all is going to end and how it is going to affect all of us.
Will we end up carrying in our wallets a currency so decrepit that even the Chinese will stop taking it at face value? To paraphrase the playwright, we are living on the kindness of strangers. Will the stock markets (the echo bubble somebody calls it) keep going up forever, will they level out or even decline like a yawning puppy dog, or will we wake up one day to find ourselves overlooking the abyss? Thatís the kind of stuff I take to bed with me, even as other nodes in Asia-based are digging in and submitting their latest thoughts to our web. I read, watch and listen to a whole host of people everyday and hope, through this effort and others to increase that number: Thereís those gold bugs in Oz-land on a site called Lemetropolecafe.com. For them itís an electronic cafť where like minds gather to chew the fat. Itís Andy Grove in his testimony to Congress last week Ėa speech I intend to talk about in a future essayówhen he warned about the disruptive down-the-tubes exodus of high paying high tech jobs from the Dulles Corridor and Silicon Valleys of the country to India and China. Jim Rogers and his wife tour the backroads of the globe and report back on their findings, the folks who put out the Daily Reckoning, etc.
The dymaxion web is all that is antidote to the official fictions spouted by the folks at the IMF, World Bank, the Federal Reserves, the Treasury Departments of the world, the downwardly revised and the upwardly revised. Likewise, itís pie in the face of the paid shills at every level of business and government who make their daily bread telling us that everything is under control. Not that I have anything against anybody making his daily bread, mind you. But I donít have to buy into the big spin jobs. Some of us Ėat least in my piece of the web-- are died in the wool ideologues; thatís all right as long as our ideologies lead us to good olí contrarian thoughts. Take the Mogambo Guru, who some of you might know, for example, heís part of this web, doesnít know it but he is. Not that I agree much with what he has to say in his own inimical way but nobody would nail him for just another hack.
The web grows. I plan to set up a site, www.dymaxionweb.com (Iíll let you know when its functioning) where you, dear readers, add your comments. In the weeks ahead, I plan to talk about the people Iím reading, talking to, listening to, watching; Keynesians and Austrian schoolers, bulls and bears, bond bugs and gold bugs, China watchers, Fed watchers, market watchers, Congress watchers and Sunday morning TV watchers. In other words, whatever I think is relevant to our financial wellbeing.
Yup, Iíll talk macro stuff, macro economics, macro politics, macro trends, macro finance, macro (or even micro) anything I think is relevant to surviving and thriving. And I will look forward to growing that extended part of my mind, my own dymaxion web.
For the time being, please send your comments to: email@example.com