The Coming Collapse of the House of Cards: Tech, Education, Health

I just read the article titled Disruptions: With No Revenue, an Illusion of Value that discusses the overvaluation of tech companies. 

This article is so intuitive, yet so refreshing. It’s incredible that people aren’t discussing another eminent collapse.

Let’s talk about money and value.

Money represents a denominated value; it represents purchasing power. What does it mean to be worth something? It must possess utility, and that utility must be great enough, must possess enough value, that you would be willing to trade something else you value equally for it.  But what if the value of what money is representing is actually valueless?  What happens when the value attached to the dollar don’t reflect the value attached to the object? What happens when the dollar is worth significantly more than the object? You simply won’t exchange your money for the object, and suddenly it’s value decreases and disappears.

What if someone told you that a company was worth a billion dollars, but you actually believed it was worth nothing? I think of Instagram, Facebook, Twitter, Groupon. How do these companies generate revenues?  How much value are people willing to give up to use these services?

The problem is speculative valuation. The question of whether these tech companies will actually deliver the advertising dollars is still out. A valuation is only as good as its assumptions. Valuations based on discounted cash flows rest on some limited tentative assumptions, specifically: basing projections that the past will be like the future, variable discretionary capital expenditures, as well as the uncertainty of discount rates and growth rates. What if the market suddenly decides that companies like Instagram are no longer “cool” and stop using the product? What’s going to happen to that billion dollar valuation?

The tech industry is experiencing a speculative bubble, similar to the one witnessed preceding the real estate bust and the resulting financial crisis. What is the real value of information technology? I know it increases efficiency, it provides us with superficial pleasure as we peruse the internet, look at Facebook pictures, and the like, but what happens when we no longer derive value from these things? What happens when suddenly Instagram is no longer cool? The value will disappear along with everyone’s money.

I also believe that the education system, specifically higher education, is experiencing a boom and will eventually bust. What is the real value of going to college? You accrue massive debt that you can’t ever escape, your income is increased marginally, and there’s no guarantee you’ll get a job. What happens when people simply decide that the price tag isn’t worth it, they don’t want the loans, they don’t think college is worth it? The value disappears.

What other industries are suddenly thriving? Health care? Is health care an over valued industry?

As this article mentions, and I believe and have said for a long time, that our economy’s worth is built on distorted valuations. The financial industry is over 21% of our economy. That’s right: twenty-one percent. What value are they actually producing? Financialization leads to decreased real asset investment, so I argue they produce no value. Instead, financialization increases speculation, risky investment, decreases private savings, and increases debt, among other things.

Our economy is a house of cards. Where is the real value?  What things possess real utility? When shit hits the fan and people have no more money, no more surplus income, no more savings: what will they be spending their money on? What good or services will people include to satisfy their necessary consumption for sustenance?  Will people prefer to spend their money on services or goods? I suspect real-asset goods. Is technology a good or service? It is intellectual capital, but does it possess any tangible value? No.  If people are broke, you think they’ll spend money to use Instagram? I bet not. And what if Instagram decided to use advertising? And what if those people are so broke that they don’t buy what they advertiser is offering? Why would a company advertise with Instagram, or Twitter, or Facebook, or similar companies?

Service industries are the result of past increases in productivity that lead to equal distributions of rising income which created a larger middle class; this middle class created a demand for services that were previously only available to the upper class; but as income distribution widens and wealth accumulates at the top while everyone else gets poorer, people will not be able to afford services. They won’t spend money on luxury goods. They won’t go out for dinner as much anymore.

But this will only occur when people can no longer borrow on credit. At present, debt is solely responsible for our sustained domestic demand and aggregate output over the years. Financial liberalization (cheaper borrowing through regulation) has allowed consumption to remain relatively stable as real wages stagnanted and inflation rose.

Only when lenders can no longer extend credit will our country experience massive stagflation (high inflation, high unemployment), eventually leading to a massive economic collapse.  We may be witnessing the beginning of such a stagflationary period.

How can someone prepare for a bubble collapse? Where should they invest their money? Commodities? How can someone bet against the market? Which goods will be in higher demand as incomes continue to drop and inequality worsens?

I’ll be posting a massive paper on inequality within the next few days and I’ll elaborate in depth on how  inefficiencies within various channels lead to economic inequalities that reduce socioeconomic equity and decrease economic growth.

Information Evolution: Language and Real-life Structures

Random thoughts on language as information evolution. And technology and digital information.

Continue reading “Information Evolution: Language and Real-life Structures”

Streaking Canopy

I can’t sleep. Insomnia has plagued me. Not insomia, per say, more of a total lack of diligence. I’ve been observing myself from afar the past few months, and I can’t help but think I’ve degenerated into a raving lunatic. There’s something of a compensatory malaise that’s settled on me, a disease of the imagination, one of the heart. I’ve succumbed to old vices, justified desultory behaviors, yielded to impulse, all in the name of fulfillment. And while I can’t say I’m in a state worth complaining about, I’m not exactly sure I feel any more fulfilled because of it.

Where is the self-discipline? I rationalize my passions, these unpredictable tyrants, with aphorisms like “reason must be a slave to the passions” and other nonsensical speak. What is balance? Before the structured society, nature imposed her rule, through time, the seasons, the setting sun. I’ve lambasted society’s strict structure as a pathetic excuse to escape responsibility from her order, all in the name of wildness. But am I an animal? Where is my personal narrative, my imagination? Why can I not call on a thread of story to sow meaning back into my life? I find myself with fading preoccupations that come and go with the tide, and I proclaim my evolution. But all the while the shore recedes and I am left with less than when I started. Am I too harsh? I have declared the reclamation of merit to live on a whim, but at what cost? Have I regressed? Have I grown into myself, or out of myself?

Change is something of a comfort. I’m tired of these thoughts, these stagnating feelings, these perduring words that have etched themselves into my psyche, that beat incessantly at my consciousness like a dripping faucet. Stillness breeds pestilence: placid pools choked of a streaming consciousness. Familiarity has evaporated fresh thought, leaving me with more of the same. Where are the revelatory insights? Do they come and go? Do I implore the world for more of her wisdom? or do I dig and mine for it from within? And what of the world and my proper place in it? Do I tell stories? do I listen to stories? or do I create them?

I am surrounded by enablers. People that feed my ego, that affirm the worth I continually seek to discard. I need to molt, to metamorphisize into something grander. Can this happen in my current state? Should I seek new frontiers? How should I employ my experience? How should I demonstrate my value? Where might I find something that doesn’t reek with past association? What is it that I am trying to escape? Where does this restlessness arise? Do I stab at it with self criticism? Do I strangle it with satisfaction?

But I want to do great, I say, want to change the world in an unprecedented way. I keep my eyes cocked, one pointed outward toward the world, the other inward toward my soul, to achieve balance, I say, but I only become disoriented. What will salvage this soul of mine? Is it literate? Do I leverage words over the minds of men, persuade them to embrace the clairvoyent alms I offer, the values I impart to the world? Do I act as a torch to light the way? And who will light my path? Is that for me alone? Or do I light the torches within other men, one by one, so that they become their own beacon, their own true north?

There are only questions, endless seas spanning leagues and chasms and planes. If I was a bird; I would have a voiced graced by divine inspiration and wings to carry me above the rising currents that bake the earth. I could soar across new landscapes, traverse valleys and streak up the hills, catch secret shade in towering canopies, and greet frontiers of wide open blue. Where is my place in this world? Is it in words, in symbols, in relations? Do I steep myself in meditation, in reflection? Or do I act with unrequited abandon and throw myself into the world? But the balance, you say, the moderation that beckons every stable being, where is that in this wide open dream?

Facebook, these digital landscapes, falsifies reality. The updates. The information. We are drowning in information. Do we need more knowledge? Does this world need more knowledge? More abstracted meaning? More stuff to fill our minds, to clog our souls, to muddle our mental machinery? I believe we are overflowing with information. Do we need more scientists? What of all the science we have? Are we getting any closer? What is the end, here? What have we achieved? Is our society any better off? Are we any better off? Do we have any more answers than when we started? So what is the goal? Should we make more of an effort to learn more? To stuff our brains with more symbols, more words? Will that provide the meaning, the answers? Will that suffice? I believe we have reasoned from the wrong premises, and our conclusions, natural as they may be, will fail us. I want to start over. From where?

I will secure a j-o-b soon. I type it like that because it’s often said like that, as if the word contains a frightful taboo, a terrifying reality that we should shield ourselves from. Upon securing this job, what have I to do then? Apply myself, earnestly produce value for my employer, all in the name of a paycheck, in the name of some core values and mission statement coined in a conference room by men wearing pin striped suits whose aim is to devise a moral incentive to maintain company performance. Workers are numbers, applicants, positions: faceless and nameless in the sea of business, in the market of operations. Performance is dictated by necessity, and beliefs are formed accordingly. We have bills to pay, mouths to feed, cash to accumulate, things to buy that extol our worth and achievement, and suddenly work becomes meaningful. But when all of that is provided, life suddenly becomes meaningless. The only outlet is pure self-expression, artistic screams that cry for some transcendental worth to imbue activity with meaning. But the crowds are fickle, and appealing to them for direction and value is a fruitless endeavor. No, you must dictate direction and value to the crowds.

Figures in authority ask the questions. It is not your place to question me if you are inferior, they say. Who do you think you are? I ask the questions, and you provide the answers. Let us educate our workforce in this way, silly complacent children.

The boys come and go. They are preoccupied with the thoughts of others. They seek approval of their worth, so they act the part, play the role, pander to the appraisal of others. Their lives, like most others, are empty; their own thoughts do not stay close but pass through them like a sieve. What is retained is a shallow film scraped from the sides of their hollow canisters. It is the same grime, the same soot, the same slime that festers across the airwaves, that penetrates the media madness, that trickles across the ticker, that dawdles down the twitter. The same information, reaffirming our crumby selves, our empty selves, devoid of self imposed rule, of self affirmed value. We become machines, with machine minds and machine hearts, latticed with everyone else’s ideas, with everyone else’s dreams, pipe dreams.

Successful and Lazy People: The Learning Process

Learning is an incremental process. Most people trying learning things all at once, or expect to get it all at once. The only way this ever happens is if previous understandings of similar concepts are in tact and referenced to the new information to construct a similar schema. Even this isn’t true understanding. To really learn or understand something, the idea and concept behind it, repetition needs to occur. Seeing something once only provides sense of information that stores in the rote memory. It has no meaning and therefore the information cannot be fully elaborated on and expounded upon.

True, learning is exponential, but anything new needs to be continually analyzed and thought to explore the dynamics. This sheds insight on the relational behavior of the information. Life is about relationships. Identifying what works with with and when and how and why. When you understand this and the unique functionality of information you can explore any new reality with a new set of eyes. Information takes on multiple dimensions and new possibilities and understandings erupt into a display of viable processes.

I say this because anytime I see new information I know in my head that i need to continually hammer at it and entertain creative possibilities, maybe induce some analytical trial and error experimentation within my mind in order to test my conjectures. I know, however, that its through this repetitive dwelling on the content that I gain this better understanding. Learning isn’t meaningful if it just happens. Ofcourse you can draw similar conclusions to information is tons of relatable information and schemas are available to contrast and compare to (I call this being able to bullshit really well) and I can do that, but I am no better off than I was before I knew the information to see its unique place. The behavior of information may not be that distant from any other piece of information, but it’s place and why it’s there is vitally important. It’s what gives it meaning.

People need to take a more proactive approach to learning. To see it as a process, a active process, instead of a job of memorizing someone elses ideas. Someone to thought into creating the concept based on very real premises- and anyone who encounters the information: it should be thier job to question and challenge the validity compared to your own very real experiences, as well as being open to thiers. Never question if what you know is right- BUT- make sure you metaphysical and semantic understandings are based on a philosophy seeking truth.

Incremental. Learning occurs in stages. Its not a overnight thing. It doesn’t happen in one sitting. You need to be observant and you need to think conceptually. You need to be actively involved and you need to .create ideas with each experience. When this happens you can learn from every moment of your life, every situation, every action, and every thought you decide to conjure. When you don’t do this…. you are falling farther and farther behind with every chance to grow as a person.

Don’t ever approach something with the attitude ‘ I can’t’ or ‘It’s hard’ or ‘It’s taking too much time’ or any other pathetic excuse to get you out of thinking and actively experiencing life’s challenges. Every challenge is unique opportunity for growth. If we never took them on we’d never grow. Imagine if life was easy. If we didn’t have to need to know how to much of anything.  We’d never need to grow. Imagine never having to learn anything. We’d honestly have no need to add knowledge to our data bank. Unfortunate the knowledge we have, and the reservoir of experiences and intuitive understanding we’ve gained to this point, is a result of the challenges we’ve faced and overcame in order to cope and survive. The more successful you are as a person, the better job you’ve done being able to decipher what work’s from what doesn’t.

Jump into every situation you can to grow. STRIVE to accept challenges. NEVER approach situations or experiences with the idea that it is a waste of time or it will be useless. Everything you know will help you in some way and make you better than the next.