The Four Pillars of Modern Civilization

Law and Order [Morning Reckoning] December 07, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Four Pillars of Modern Civilization Asti, Northern Italy December 07, 2023 [Sean Ring] SEAN RING Good Morning Reader, Before we get started, I wanted to point your attention to our latest YouTube video. I interviewed Alex Krainer, founder of Krainer Analytics and creator of I-System Trend Following. We talked about trend trading and current market trends to get ahead of. Check out that video by clicking below: [yt img]( This week, I wrote a piece for the Rude Awakening titled “[Back to the Caves, Peasants!]( In it, I quoted Michael Shellenberger, author of Apocalypse Never. He recently gave an interview with Tucker Carlson in which he derided those who would attack the four pillars of civilization. "We know that the pillars of civilization are cheap energy, meritocracy, law and order, and free speech, and all four of those pillars are currently under attack," said Shellenberger. The subconscious mind immediately recognizes and accepts truth. As long as private property is included in the category of law and order, I’m on board. All freedom springs from private property, which is why the other team quotes (and misinterprets) Proudhon all day long. After all, if property can be stolen, it must exist in and of itself first in the possession of an owner and, therefore, cannot equal theft. It’s also why many Americans will never forgive Jefferson for changing the Declaration of Independence’s words from “life, liberty, and property” to the more cheerful but far more vague “life, liberty, and the pursuit of happiness.” In 1689, John Locke argued in Two Treatises of Government that political society existed to protect "property," which Locke defined as a person's "life, liberty, and estate.” Jefferson would have done posterity a world of good had he been a bit less lavish with his words. Civilization has always been built upon certain foundational elements enabling growth, sustainability, and prosperity. These components fuel our world's physical and economic engines and shape our societies' moral and intellectual framework. In this Morning Reckoning, let’s dive into civilization’s pillars without knocking them over. [A Death Sentence for the Stock Market]( America is racking up credit card debt like we’ve never seen before, which could lead to an unprecedented economic decline in 2024. Everyday investors could lose trillions from their brokerage accounts. The time to prepare is now, and Jim Rickards has brought in his #1 financial contact – “The Banker” – to help you do so. This retired hedge fund manager has decades of institutional capital experience and specializes in generating steady returns during extremely volatile markets. [Click here to learn his strategy to play the market’s next downturn now]( . [LEARN MORE]( Cheap Energy: The Dynamo of Progress The first pillar, cheap energy, is the lifeblood of modern civilization. In its absence, the machinery of economic progress grinds to a halt. From fossil fuels to renewable sources, cheap energy powers our homes, industries, and transportation. It’s the driving force behind economic growth and technological advancement. Access to affordable energy is so pivotal that it directly correlates with a nation's quality of life and economic development. Unfortunately, we’re witnessing what happens to a country when it shuns cheap energy for political points. [chart img 1] Credit: [Capital Economics]( Germany stupidly went along with US sanctions against Russia and is paying for it dearly. They were never going to work, for myriad reasons I stated in the Rude and for three, in particular, my erstwhile colleague Jim Rickards wrote about in Strategic Intelligence: - The target country must have a small- or medium-sized economy with little robustness or resiliency to sanctions. - The target country must have limited access to alternative payment channels and few allies in any effort to obtain hard currency. - The target country must have limited hard currency reserves or gold with which to evade or wait out sanctions. How bad is the German economy currently? Let’s read what Capital Economics has to write about it: German economy still very weak - The rise in the Ifo Business Climate Index (BCI) in November mirrors the increase in the Composite PMI released yesterday but leaves the index deep in contractionary territory. It does not change our view that GDP will contract again in Q4 and will remain in near-recession conditions in the first half of 2024 too. - Separate data released this morning by the Federal Statistics Office confirmed that GDP contracted by 0.1% q/q in Q3 after flatlining over the first half of the year. - The outlook remains poor for the German economy. We expect GDP to contract again in Q4 and growth to remain sluggish at best thereafter. Higher interest rates and a softening labour market should weigh on investment and household consumption in the coming months, and the constitutional ruling on the debt brake could lead to an additional, sharper-than-intended fiscal consolidation next year. Sanctions support will go down in German history as the most asinine government decision of the early 21st century. (The hysterical decision to close down its nuclear power stations after the Fukushima disaster in Japan is a close second.) With cheap energy, Germany is a powerhouse. Without it, it’s a damp squib. Historically, civilizations that harnessed energy effectively, whether through windmills, water wheels, or coal-fired steam engines, often led to innovation and wealth. Pursuing more efficient and sustainable energy sources continues to shape global politics and economics. Meritocracy: The Ethos of Fairness and Excellence Meritocracy, the second pillar, is the principle that positions talent, effort, and achievement as the basis for progress and recognition in society. It’s a cornerstone for fairness and is instrumental in nurturing talent and hard work. In a meritocratic system, individuals are given opportunities based on their abilities and merits rather than their social status or background. This system encourages a culture of excellence and innovation, as people are motivated to develop their skills and contribute effectively to society. Meritocracy is significant because it fosters a sense of justice and equality, which is essential for social cohesion and stability. It also drives economic efficiency and productivity, as the most capable individuals are positioned in roles where they can make the most significant impact. The most glaring example of the lack of meritocracy must surely be in US college admissions. There are so many colleges to choose from, and almost no one is going to the right school for themselves. Why? Because the process is no longer meritocratic. Have a look at this: [char img 2] Credit: [@TheRabbitHole84]( Helping is good. Pandering is not. The US no longer has the world’s best universities, just the most expensive ones. Law and Order: The Framework for Stability and Justice Law and order form the third pillar, providing the legal and moral framework essential for the functioning of society. This pillar encompasses the laws that govern behavior, the institutions that enforce these laws, and the judicial systems that interpret them. The rule of law is fundamental in safeguarding rights, ensuring justice, and maintaining social order. It creates an environment where individuals can exercise their freedoms while respecting the rights of others. In societies where law and order are strong, citizens feel safer, businesses operate more efficiently, and governments function more effectively. This pillar is critical in upholding democracy, protecting property rights, and ensuring that society operates in a predictable and orderly manner. Without it, there is a risk of chaos, injustice, and the breakdown of civil society. There are so many examples to choose from. But I’ll save myself a thousand words by merely posting a picture of Minneapolis during the riots, where precisely zero people were arrested. [tmz news img] Credit: [TMZ]( Free Speech: The Vehicle of Expression and Innovation The final pillar, free speech, is a fundamental human right. It allows for the exchange of ideas, debate, and dissent. Free speech is crucial for the development of a society as it fosters an environment where creativity and innovation can flourish. It enables questioning the status quo, essential for scientific advancement, social progress, and the fight against injustice. Moreover, free speech is integral to the functioning of a democratic society. It ensures that governments remain accountable to their citizens and empowers individuals to participate in politics. Societies that uphold free speech tend to be more resilient, adaptive, and progressive. Conversely, the suppression of free speech can lead to stagnation, oppression, and social unrest. Luckily, there’s some hope: [elon musk img] Wrap Up These four pillars — cheap energy, meritocracy, law and order, and free speech — are fundamental to the flourishing of modern civilization. Cheap energy powers our economies and innovation; meritocracy ensures fairness and rewards hard work and talent; law and order provide the necessary framework for societal stability and justice; and free speech fosters an environment of creativity, accountability, and progress. Together, these pillars support a society that is not only economically robust and efficient but also just, fair, and conducive to the well-being and development of its citizens. As we navigate the complexities of the 21st century, fighting those who’d knock down these pillars is essential to building a resilient, dynamic, and prosperous civilization. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Nvidia Helps Spark $100 Billion Sales Surge For A.I. Supplier?]( Nvidia’s little-known supplier is set for a [$100 BILLLION sales explosion]( … …and it’s thanks in part to this mysterious device you see here: [Click here to learn more]( According to our research… This $100 billion sales boom could even turn this little-known supplier… … into the [the next trillion-dollar stock]( . To see how to take advantage of this little-known supplier – before it’s $100 billion sales surge —— [go here now .]( [LEARN MORE]( In Case You Missed It… Gold Tops $2K. Here’s What Happens Next… Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Goldbugs, your time has come. Welcome to the Big Show! Gold futures have finally broken free of a choppy, four-year range to extend to new all-time highs. Today, I’ll dig into gold’s massive breakout. I’ll show you how the move has developed, where gold’s headed, and some important milestones to watch. But first, you need to see how choppy, post-pandemic trading has led to the biggest gold breakout we’ve witnessed in more than a decade… and why the move has caught so many investors completely off guard. Gold quickly became one of the most frustrating plays on the market almost immediately after the pandemic bubble started to percolate way back in early 2020. In fact, for nearly four years, every single major gold rally failed to extend and produce a major breakout. The first attempt at fresh highs began as gold futures exploded off their lows in March 2020. In just five months, gold jumped from $1,450 to $2,000. But the big breakout above round-number resistance at $2K didn’t stick, and gold promptly fell back into a wide range. Gold futures sank back below $1,700 by early 2021, then repeated the process. First, a rally back toward $2,000. Failure quickly followed every extended gain. The bulls would walk away, and gold futures would enter a tailspin until buyers showed up in the $1,600 - $1,700 range. Lather, rinse, repeat. Overcoming Failure Choppy, range-bound action is enough to frustrate even the most disciplined investors. But four years of failure was directly responsible for triggering extreme bouts of market depression in any market participant who had ever even as much as glanced at a gold chart. But eventually, the failures became routine. So it wasn’t too surprising when the promising precious metals rally off the October 2022 lows hit resistance below $2K (again!) unraveled, sending gold lower for four straight weeks into November. And even as gold futures managed to get off the mat and rally earlier this year, they still were not able to hold above $2,000 for any meaningful amount of time. As I noted a few short months ago: The shorter-term trend is sideways. Price is all over the place. The only saving grace for gold is that it hasn’t completely broken down following a test of $1,900 back in late June. Thankfully for the gold bulls, the US Dollar index offered a small spark to help break the cycle of chop. The dollar finally began to roll over in October, helping gold firm up and push back toward its summer highs. The end of October even featured a quick “tease” above $2K – but the monthly candle finished just below the historic level. Following a short consolidation, gold was back in action in late November, finally producing the first ever monthly candle to close above $2,000. [chart] One quick note about this chart: Once gold extends into blue skies, it’s highly unlikely the rally ends anytime soon. Remember, this breakout is years in the making. The bigger the base, the higher in space. Precious metals have taken their sweet time to get their act together. But I believe a bigger breakout will attract more eyeballs from mainstream investors and the financial media. That will have a snowball effect as more speculators add gold positions to their portfolios. This first move above $2K is only the beginning. Once we churn past some of this whipsaw action, a quick jump to $2,600 is possible before gold even thinks about consolidating. But before that, the miners will probably wake up and start to run. The VanEck Vectors Gold Miner ETF (GDX) has already cleared resistance at $30. We should look for it to take out those summer highs near $36 in short order. So Long, Charlie You probably heard Charlie Munger of Berkshire Hathaway fame died last week just shy of his 100th birthday. Round-number resistance got one of the greats… Munger is probably the most quotable of the finance legends — the Yogi Berra of compounding. You don’t have to agree with all his views. I’ve seen some crypto hardliners posting snarkier takes regarding Munger, probably because Charlier wasn’t shy when it came to his disdain for the sector, calling Bitcoin “rat poison” years before its ascension to the mainstream. I certainly don’t drink the Berkshire Kool Aid! But he was certainly entertaining. It’s safe to say Charlie’s best quips will live forever in the annals of investing lore. I’d like to close today’s note with a couple of my favorites: “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” “The best thing a human being can do is to help another human being know more.” RIP Charlie. Here’s to being a little less stupid today and every day. Since we’re working on being our best, maybe we can also continue to learn a thing or two from each other along the way. Looking for more market insights? [Join me this morning at 11 a.m. Eastern for Top Trades Live!]( I’ll be reviewing a recent gold trade I put on over at The Trading Desk. I’ll also show you my favorite gold miner charts – as well as other hot trends developing in the market today. [Click here to join me!]( Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. 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