## Archive for the ‘Economy’ Category

### About the Law of KLeiber

Friday, October 29th, 2010

A power law relates one variable to another raised to a constant power. The general form takes y = xa, where y and x are variables, and a is a constant exponent.

A power law exhibits the property of scale invariance. When you multiply the Scale (x) with a factor b the function (y =  baxa) does not change its Shape.

In 1817 Goethe wrote his book ”Zur Morphologie“. This book was the start of a new science called Morphology, the Science of the Shapes.

In his book Goethe describes the so called Uhrplant, the Primal Plant, which is based on the shape of the Leaf. Goethe believed that every Plant was a Leaf within a Leaf within a Leaf.

At the time of Goethe the concept of the fractal was not known. It was developed in 1975 by Benois Mandelbrot (“The Fractal Geometry of Nature”).

A fractal is a self-similar structure. It’s shape repeats itself on every level of expansion.  Some fractals are scale-invariant.

The scale invariant fractal structure of the Leaf

Metabolism is the process by which your body converts what you eat and drink into energy. During this complex biochemical process, calories in food and beverages are combined with oxygen to release the energy your body needs to function.

The oldest and best known Power Law is Kleiber’s law devised by the Swiss-American zoologist Max Kleiber in 1932.

Kleiber’s Law, MR = W3/4, describes the relationship of the metabolic rate (MR) to the biomass W, raised to an exponent.

Kleiber’s law means that a cat’s metabolic rate is not a hundred or 21.5 times greater than a mouse’s, but about 31.6 — 100 to the three-quarter power.

This relationship seems to hold across the animal kingdom  and it has since been extended all the way down to single-celled organisms, and possibly within the cells themselves to the internal structures called mitochondria, the cellular powerplants, that turn nutrients into energy. Mitochondria have many features in common with bacteria.

The law of Kleiber is  also applicable to super-organisms” like ant colonies, Cities and Eco-Systems.

Because of Economies of Scale, larger and more complex forms of organisms need less energy for each individual cell. They grow and reproduce more slowly and they live longer.

Kleiber's law

Kleiber’s law can be explained from a general model that describes how essentialmaterials are transported through Space-Filling Fractal Networks of Branching Tubes.

Goethe was right. The leaf is a one of the fundamental structures of Nature.

The factor 3/4 (3/3+1)  is a consequence of the fact that a Fractal Structure has to incorporate a not-Fractal Structure, 3-Dimensional Space.

One of our fellow Bilaterians: The Octopus

About 590 million years ago, the Central Nervous System (CNS), the Brain, appeared.

The organisms with a CNS (including the Humans), the Bilateria, are able to Act and React to a Possible Harmful Stimulus.

The CNS of the Bilateria is  a result of  an Increase in Competition between the Life Forms that came out of the Continuing Fusion of  the Cooperative Life Forms, the Bacteria. The first step in this proces was the Tube of the Sponge.

The fundamental Bilaterian Body Shape is a Tube running from Mouth to Anus, and a second Tube called the Notochord, with an especially large Sphere at the front, called the “Brain“.

The Bilateria have Five Body Spheres (1) the Brain; (2) the Spinal Cord; (3) the Heart and Lungs; (4) the Digestive Organs and Kidneys; (5) the Bladder and Reproductive organs.

About the Tiny Spheres of the Lungs

When we look at the Lungs, one of the Fractal Tube-like branching-structures of the human organism, we can see that the Branches end in Nodes called the alveoli (“little cavities“). The end-nodes of the branching system are tiny Spheres.

The Alveoli use another basic structure of Nature: The Sphere

In the tiny Spheres the Exchange takes place of Carbon Dioxide and Oxygen between the Lungs and the Blood-Vessels. Each human lung contains about 600 million alveoli.

Water diffuses from the alveoli cells into the alveoli so that they are constantly moist.  Oxygen dissolves in this water before diffusing through the cells into the blood.

The Oxygen-rich blood returns to the Heart via the pulmonary veins to be pumped back into circulation. The Carbon Dioxide is pumped out by the Lungs.

In the many million Small Spherical End-Nodes Two Circulatory Systems, the Cardiovascular System (Heart) and Pulmonary System (Lungs), are Connected.

The Big Structures of Nature are able to Scale because the Connection-Points of the Networks are Very Small.

They are reusable on Every Scale that is Bigger than the Scale of the Connection Points.

We will see that all the other Fractal Systems in our Body are based on the Same Principle.

Villi

About the Tube of the Digestive System

The Tube contains the Digestive System. It breaks-down larger food molecules into smaller ones that can be absorbed into the blood stream. This happens in the Small Intestine in the vili and microvilli.

The villi (“shaggy hair“)  are tiny, finger-like projections that are approximately 0.5-1mm in length. The microvilli are mechanosensors and have a lot in common with the flagellum (“the roter“) of a bacterium. Microvilli appear in many places in the body. They are also of importance on the cell surface of white blood cells, as they aid in the migration of white blood cells.

The Tube of our Digestive System is highly similar to the Tube of the Sponge, the first fusion of the Bacteria in a  more efficient metabolic structure.

The Output part of the Tube is called the Large Intestine (Colon). Its function is to absorb water from the remaining indigestible food matter, and then to pass Useless Waste Material from the body. The large intestine houses over 700 species of bacteria that perform a variety of functions.

The Liver Fractal

About the Chemical Factory of the Liver Cell.

The Liver is  a Fractal Branching System that detoxifies harmful substances absorbed via the Small Intestines.  It’s basic structure is the Liver Cell.

The Chemical reactions in the liver cells produces a lot of waste heat. This is carried round the body in the blood and warms less active regions.

The Liver regulates the amount of Blood Sugar, Lipids, Amino Acids.  The Liver is the Storage House of  Blood, Iron, Vitamine A, D, B12  and Clycogen, the Source of Energy of the Body.

The Liver produces Bile that is stored in the Gall Bladder. Bile is used to dissolve fat.

The White Blood Cell

About the Spleen and the Immune System

Another Fractal Branching System, the Lymphatic System ( “The Immune System“, Spleen),  maintains the health of the body by protecting it from invasions by harmful pathogens, such as bacteria, viruses, fungi, and parasites. These pathogens are the cause of many diseases, so it is necessary to detect and eliminate them rapidly.

The Lymphatic System is connected to the Blood System and produces the White Blood Cells (Lymphocites).  The Lymphocites are the Basic Unit of the Human Defense System. They look like Bacteria.

A lymphocite fits with a pathogen

The surface of a lymphocyte is covered with a large number of identical receptors. Recognition and destruction occurs when the receptors of the lymphocyte fit like a key into the surface of the pathogen.

The Immune System is a Highly Adaptive System. It is able to generate new types of Lymphocites out of a Library of DNA-components.

Nephron

The Kidneys serve the body as a natural filter of the blood, and remove wastes which are diverted to the urinary bladder. The Nephron is the basic structural and functional unit of the kidney. In humans, a normal kidney contains 800,000 to 1.5 million nephrons. Nephrons are wave-like structures. Its chief function is to regulate the concentration of water and soluble substances like sodium salts by filtering the blood.

The last  Fractal Branching System, the Meridians, is a Fast Electro-Magnetic Channel that connects to Organs to the Spine and the CNS.

The Ancient Chinese Scientists believed that this System pumps its Energy, the Chi Force, out of the Earth Magnetic Field.

The Ancient Egyptian Scientists believed the same thing. They named  the Four Cavities the Four Suns of Horus and the Spine, the Djed Pillar (Dj means “Snake”).

The Five Systems of Acupuncture

The number Five (4 +1 ) plays an important role in Ancient Chinese Medicine.

The Central Fractal System, the One (1), the Fire System, the Blood System, with its Center the Heart,  contains Four (4) Links to the Other Systems.

The Four Systems are combinations of Two Forces, Expansion and Compression.

The Two Forces came out of One Force (“The Void“).

Two Systems contain the same combination (Expansion x Expansion (Wood, Gall Bladder, Liver, Three Heater), Compression x Compression (Metal, Lungs)).

Two Systems combine Expansion and Compression in a different order (Expansion x Compression, Compression x Expansion). They create a Wave (Water, Bladder, Kidney) or Spiral -like (Earth, Immune System) structures.

The Five Spheres of the Body are incorporated in one Super Protective Sphere, the Coelum, the Skin.

In the Human Embryo the First step of Division of the Cells is between the Coelum,the Multi-Cellar Body, and the Brain, the CNS. In the first step the One was divided into the Two, the Actor and the Monitor.

The CNS  “mirrors” the activities of  the Body and acts as a “predictive simulator”.

The Shape of the CNS is a mirror (Up-Side-Down) of the Shape of the Multic-Cellular Body.

The Bilateria are a Fuse of two Organisms in which one organism changed into the Body and the other changed into the Brain.

These two structures are always competing in the Human Being.

The Brain is Looking Up at the Sky. The Body is Looking Down at Mother Earth, it’s Creator.

The Brain and the Body are United in  the Heart, the Balancer of Body and Soul and the Keeper of the Rhythm (The Pericardium).

Sponge, The Tube

The Body Shape of the Tube was inherited from the first Multi-Cellular Organism, the Sponge. The Sponge is a  Static Cluster of Amoeba, free moving bacteria, that are propelled by their flagellum (a Roter).

The Basic Building Block of the Body, the Bacterium

Bacteria are small chemical factories that are able to share and combine their production processes by exchanging DNA.

With their flagellum the Bacteria Explore the environment to find the chemical food they need. When they have found food the Circulation of the Flagellum moves into the Opposite Direction.

The bacterium integrates incoming chemical signals during a few-second period of its travels, and adjusts its direction of advance accordingly.

The integration is achieved through temporary chemical modifications to molecules located in the bounding membrane, which transfer nutrients to the cytoplasm, and also through changes to certain other molecules in the interior of the cell. Such integration is essentially a short-term memory mechanism.

Bacteria exchange their DNA

At a certain moment the Bacteria got together because the Sponge is a much more Efficient Metabolic Structure than a group of Free Moving Bacteria.

Strangely enough the DNA of the Sponge already contains the complete Bleuprint of the Humans.

Scientists now believe that most species on earth are a result of a loss of DNA from the original Bleuprint that was created when the Bacteria finally fused into one Organism.

Recently scientists have found Electric Fields as strong as 15 million volts per meter in the Nano-Parts of the Cells. These fields are as strong as those produced in lightning bolts.

It’s not clear what causes these strong fields or what they might mean but they could account for a until now unknown (by Science) or well-known (by the Old Scientists, Chi) Source of  Bodily Energy.

The nano-parts of the Cell could be the very very very small universal building blocks of Nature.

What has Happened?

In the beginning the Chemical Soup generated Self-Reproducing Chemical Factories.

These Factories combined into bigger Factories by exchanging and combining their factory-designs.

Every time when the Factories fused they became more Efficient, Bigger, Stronger, Older and therefore more Competitive.

When the Factories became more competitive they had to Protect themselves against the other Factories.

To Protect themselves the Multi-Cellular Systems started to Sense in Many Directions.

In the first step a Nerve-Net was created.

In the second step one part of the Organism turned Upside-Down and became a Specialized Predictive System (the CNS).

This part fused with the Bodily Part creating one Organism that contained Two Organisms.

The Bilateria, the Organisms with Two Complementary Parts, Body and Mind, were born.

Some of the Bilateria called Humans fused in Social Structures and the Social Structures fused and fused and became more efficient, bigger, stronger, older and therefore more competitive.

In due time they will Rule the Earth and will start to create bigger and bigger systems until they will rule the complete Universe.

To make this possible the Humans need every other part of Nature to Sustain their Growth. This will certainly result in a huge Collapse of their own Eco-System.

The main reason this is happening is that the Humans forgot to Copy the Designs of Mother Nature.

The Brain (Thinking and Sensing, Left Brain), Looking Up at the Sky,  believed it could do a much Better Job than it’s counterpart the Multi-Cellular Body (Emotions and Imagination, Right Brain), Looking Down at the Earth, the Source of All Creation.

Kleiber’s Law shows that we are now using 122 times more Energy per Person than we really would need if we would Scale in the right way.

What can we learn from Kleiber’s Law?

All organisms including the humans depend for their maintenance and reproduction on the close integration of numerous subunits.

These components need to be serviced in a relatively `democratic’ and efficient fashionto supply energy, remove waste  and regulate activity.

Natural Selection solved this problem byevolving hierarchical fractal-like branching networks, whichdistribute Energy, Information and Materials between Big Reservoirs (“Lungs”) and Small Connection Points (“Alveoli”) of other Circulatory Systems (“Blood”).

This Fractal Bottum-Up approach is highly effective and efficient.

The not-fractal, Top-Down,  machinery designed by the Humans is Scaled with a factor 1 so we can improve a lot by copying Mother Nature.

About the Heart Chakra or Why the Heart connects the Brain and the Body

How to use the Heart to find Balance

Why Humans look a lot like Bacteria

About Kleibers Law and the Rain Forest

A movie about Fractal Structures in Nature

About the Fusion of Water in the Cell

About the Number Five in Chinese Medicine

Why Humans are part of Super Organisms

How the Humans evolved out of the Bacteria

About the Left and the Right Brain

How the Heart synchronizes the Body

About the Fast Transmisson Channel in the Body

A general model to explain Kleiber’s Law

About Kleiber’s Law and the Growth of Cities

About the Law of Kleiber and Ant Colonies

The terrestrial evolution of metabolism and life

A movie about the origin of vertebrates

### Many Reasons to Believe that the Economy will not Recover in a Short Time

Wednesday, June 24th, 2009

The Unemployement and the Stock Market are rising for some time now. A new Stock Market Bubble is building up and will explode in the near future. The biggest Bubble is certainly the US Deficit Bubble.

The Stock Market Bubble and the Deficit Bubble will explode as soon as the major creditors (China, India, …) of the US will move out of the Dollar. This is happening already.

The Customers are the backbone of the Economy and the Leaders understand very well that the Economy is governed by Psychology. So Bad News is hidden en Good News is exaggerated. The Expectations of Analysts are always beaten and the downfall is falling slower than before.

The Economy is still in a terrible state and this state is getting worse every day. The unemployement is still rising and will rise for a very long time because companies are getting broke or are rationalizing everything that is possible.

They replace their employees by IT-Technology and Cheap Labor. The customers are not buying, they are saving more and more money for a rainy day or are paying back their debts.

Saving money will not stimulate the economy. It stimulates unemployment. The rising unemployement results in more foreclosures and problems with credit card debts. The Economic Downturn is just at its beginning.

Economist John Williams says that– if the unemployment rate was calculated as it was during the Great Depression the unemployment figures for July 2009 rose to 20.6%. According to an article summarizing the projections of former International Monetary Fund Chief Economist and Harvard University Economics Professor Kenneth Rogoff and University of Maryland Economics Professor Carmen Reinhart,… unemployment could rise to 22% within the next 4 years or so.”

The Scenario of the Current Downturn is highly comparable with the Scenario of the Great Depression with one exception. The current Downturn is much deeper than the other. We are approaching the Biggest Global Economic Crisis in Human History.

The current investors base their policy on positive news and ignore the bad news. They believe the economy will rise when the customer-confidence is rising or when the downfall of the economy is “slowing down” or “bottoming”. They don’t see that a slowing down of a downfall is still a downfall.

The investors, the Doves, act just like the behavioral economists predict they will act. They read the headlines, believe the Hawks and are not aware of the (Money) Illusion the Government, the Media and the Banks are creating. The Hawks know better. They buy Silver, Gold and certainly the best investment, Oil.

Nouriel Roubini has a more realistic view on the economy. In his article Ten Risks to Global Growth he analyses the risks that could block the recovery of the economy and his conclusion is highly pessimistic.

According to Roubini the major cause of the crisis is overspending. Overspending is a normal activity when the Kondratiev-Cycle is in the state of Autumn. The debts are always repayed in the next phase, Winter. In the Kondratiev Winter the economy is purged and cleansed. This phase started around 2000 and will be finished around 2013. In the Winter-State you have to stay in cash or invest is Gold and Silver.

At this moment the investors don’t know what currency they have to chose for their cash-reserves. Usually the Dollar was a Save Heaven but the current policy of the FED to expand the amount of Dollars to an almost unbelievable amount is seen as a huge risk.

The Creditors (China, India, ..) of the US are already creating an alternative currency and are secretly and slowly moving out of the Dollar. If the Trust in the Dollar has gone the US Economy will go bankrupt.

The big problem with the current Cycle is that we have moved to the Level of Earth. In the last downfall of the Kondratiev Cycle other parts of the world were decoupled. They moved in a complementary mode. The Down of one part of the Earth was compensated by an Up somewhere else.

At this moment the complementary parts are synchronized and act and react according to the same rhythm. This rhythm is related to a longer term cycle that almost nobody is aware of. This cycle with a periodicity of 250 years is called the Secular Cycle.

The current level of integration of the World Economy is very dangerous. The production-processes of the Earth are highly rationalized and integrated. When one process stops the rest of the processes also has to stop.

The very high level of rationalization causes cascades or avalanches. The fast and slow avalanches generate sudden bursts of unemployment and financial disasters. The Car Industry and the Financial Industry are good examples. At this moment the avalanches start new avalanches in completely different branches of the tree of the World Economy.

The Crisis in the Banking Industry puts a large part of the Corporate Sector under severe financial stress. Firms that in the past would have been able to roll over their loans, bonds and debts now face a liquidity crisis that may lead them into costly debt restructuring.

This will affect the Banking Industry and will also put a high strain on the Bailout capacity of the Governments who are not able to leant money or inflate money until eternity.

The only solution that is left is to Rationalize even more than the Companies were planning to do. Their only solution is to speed up the use of IT (Use the Internet) and fire the employees. It is very clear that the use of IT in Companies is still in its infancy. Many manual activities can be replaced by software. The total effect will be a worsening of the current crisis.

To stop the cascades governments are starting to Protect and Regulate their Economies. The Worldwide Cooperative Institutions are losing their grip and the Free Market Economy is on its return.

Big Companies are splitted according to the old Boundaries of Power. The expansion and integration of the EG is blocked because the member states suddenly have conflicting objectives. The Rich Countries don’t want to help the Poor Countries because the Rich Countries are getting poorer with the minute.

Not only the poor member states of the EG are getting into big trouble. The same applies to the Underdeveloped Countries. The poor Countries of the World are on their own. Everybody is in the Survival mode and The Fittest, The Rich, will as always Survive.

The world is not only hit by a Economic and a Cultural crisis. The world is also hit by a Climate Crisis. Although human activity plays an important (negative) role the Cycle of the Climate related to the activities of our Sun and the Movement of Earth in our System (the Precession Cycle) is much more important.

The current change in Climate is irreversible and will have a major effect on the world economy. Climate change and ecological misuse are the major factor why Societies collapse.

The last factor and perhaps most important factor is the Energy Consumption of the World. This consumption is not only affecting the Climate but it also facilitates a huge highly integrated Transport-System.

This System is the Backbone of the Integrated Value-Chains of the Western World. The Western World is completely dependent on the transport system for its Industrial Production and the Supply of Food.

The Transport System has a devastating effect on the poor countries in the World. To make enough money to survive they have to export their products to the Western Markets ignoring their own needs.

It is certain that the supply of oil and gas is lower than the increasing demand. The resources all over the world are going down. The total effect of this all will be a dramatic rise in price. This will affect the rich countries and in particular the US. They are already the major importer of energy in the World and when you import something you have to export something else to keep the financial balance in order.

As you already know the deficit of the US is spectacular and the only reason the US is not broke is the special role of the Dollar. If the economy recovers the demand and the prices will rise and the US Economy will slow down immediately.

What is Going to Happen?

Every scenario leads to a long term decline of the Economy, our Culture and our Civilization. The theory of the short term and long term cycles is right and it is very stupid to ignore these theories.

According to the Panarchy Model the world is too connected and this leads to an increasing rigidity in its goal to retain its state. The rigidity reduces resilience and the capacity of the system to absorb change, thus increasing the threat of abrupt change. The world is unable to cope with the changes of climate and culture that are happening now. Therefore we will see the collapse of the accumulated connections and the destruction of bound up knowledge and capital.

The highly integrated structures of the Earth (the Cooperative Institutions, the Big Companies, Governments AND the Transport System) are bound to desintegrate. The impact on the local structures is immens. Communities will have to grow their own food, manufacture and repair their own tools, create their own currency etc etc on a local level again.

Most of these structures have outsourced these functions to places far away and don’t have the skills nor the resources to do this. The fittest, the Haws, will survive but it is unclear if the Doves will accept this situation forever. A Rise of the Masses just like the French Revolution in 1789 (almost 250 years ago!) is possible.

The world is moving to a very fast transformation. The only thing that can be said when we use the Panarchy Model is that it will move back to a stable state before the expansion started and start all over again. The Wisdom of the Old Civilizations that survived earlier Collapses is very valuable. These lessons are very easy to comprehend.

Civilizations die because the humans don’t want to Move with the Cycles, don’t Cooperate and don’t Respect Mother Nature. When Civilizations Collaps even the Hawks lose Everything!

Peter Schiff, Why the US Economy will Collaps this Year

How the Fed is cheating the citizins. About Deflation.

Why the Labormarket is Much Worse than we Think

Why the Current Crisis is comparable with the Great Depression

About Behavioral Economics, Why Hawks always Win and Doves always Lose

Nouriel Roubini, Ten Risks to Global Growth

About The Kondratiev Winter and the Generations Theory

About the End of the US Dollar

Why the US Defense Budget will Destroy the US Economy

The Complete Text of the Book of Turchin

About the Problems the Real Estate Market is Facing

Why Rationalization is the cause of the current Crisis

Jared Diamond, Why Societies Collapse

Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller

About Peak Oil, The Model that Predicts the End of Oil and Gas

### About Behavioral Economics: Why Hawks Always Win and Doves Always Lose

Friday, May 29th, 2009

The belief in Rational Decision Making has been the focus of Economic Theory for a very long time.

Although everybody knew that Humans are Highly Impulsive and Emotional, Economists based their theoretical models of the Market on a Rational Human Being who is always able to Calculate the best Alternative possible. This Theory is wrong. The Economic Behavior is controlled by the Emotions.

The current economic crisis shows that the old Rational Theory is not applicable and the attention for alternative theories of Economic Behavior is rising. These theories are called Behavioral Economics.

An important paper in the development of behavioral economics was written by Kahneman and Tversky in 1979 (Prospect Theory, Analysis of Decision Under Risk). Kahneman was awarded the 2002 Nobel Prize in Economics for his research in Prospect Theory.

According to Prospect Theory, Humans attach much greater weight to future losses than to future gains related to their personal reference point. When you expect a certain gain in the future and this gain is lower than you expect the gain is experienced as a loss.

Kahmeman and Tversky became the experts on Cognitive Bias. A Bias is a “not-rational” mostly fast response to a stressful situation. In this case the Human System uses old structures (The Reptile Brain) that were created a very long time ago when the human lived in a completely different environment. The Reptile Brain uses many shortcuts to save time.

Social and cognitive psychologists have identified a number of predictable errors in the ways that humans judge situations and evaluate risks. Biases have been documented both in the laboratory and in the real world. For example, people are prone to exaggerating their strengths: About 80 percent of us believe that our driving skills are better than average.

In 2009 Kahneman and Renshon wrote a paper called Hawkish Biases. It is an attempt to unite the many Cognitive Biases into one Model. The model shows that Humans are highly Confused Predators (Hawks).

As a Predator they protect their Territory with every means possible. They are Confused because they are capable to Observe and Reason about their own behavior and the behavior of others.

Humans need the “Illusion of Control” to sustain their own Identity. Every time something happens they are looking for reasons to believe that they are the Primary Actor in their own context. They don’t want to believe that Other Human Beings are also Active Agents.

If they would believe this was the case their “Unrealistic Optimism” could change into “Realistic Pessimism”. Unrealistic Optimism makes managers, politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes. Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster.

When a Human is Depressed by Realism he Loses his Face and moves down in the Picking Order of the Territory.

Humans believe that every other Human is always capable to see their Weaknesses (“the Illusion of Transparency“) just like they are convinced that the intentions of others are always clear to them (“the Fundamental Attribution Error“). To hide their Weaknesses they have to wear a Mask and Play the Strong Leader of the Pack. They have to Keep Up their Appearances.

Humans base their theory of the other on inferences about historical behavior and completely forget Situational aspects. When a context is hostile the other must be hostile too. When others behave differently from their expectations they suddenly introduce situational factors to sustain their believe system.

Humans need to sustain their believe-system because this system is the foundation of their personality. Their view on the World has to stay constant because when it changes too fast they will get into big psychological problems. When people get older their believe-system becomes very rigid.

Humans value their own possessions much higher as the possessions of others (“The Endowment Effect”). They even consider possible, imaginary, possessions as real possessions if they are convinced there is an easy way to get them.

If they lose a real or imaginary possession they take tremendous risks to get their possessions back (“Risk Seeking in Losses“). People in general don’t like cutting their losses. They’re willing to gamble on in the hope of recovering them.

Humans simply believe that a Hawk always wins the Game and a Dove always loses. What Humans (want to) forget is that they are living in a group and their In-Group and the many Out-Groups contains many Hawks. They need the confidence that they are “the best” to Survive.

The world of the Human Hawk is a world of Competition (Winner takes all) and therefore highly Stressful. The Sad Thing is that the many faces of Stress are the Major Cause of the Cognitive Bias. When Humans relax and reflect they are much more capable to solve a complicated conflict.

The competitive Hawks always fall in the trap of the Prisoners Dilemma and don’t realize that Cooperation, the Win-Win is the only Certain Way to Leave the Prison.

At this moment another Behavioral Economist, Robert Shiller, is getting a lot of attention. Together with the Economic Nobel Prize Winner George Akerlof he wrote the book “Animal Spirits“.

In the book they identify five distinct elements that blur the theory of the Rational Economy. These elements or “animal spirits” are called: confidence, fairness, corruption; money illusion and the reliance on “stories”of others.

The first three have a lot to do with the “hawk“-theory of Kahneman. The Hawks use the Rational System for their own benifit. They Play with the Rules and invent new exiting possibilities to win more than they ever could imagine.

Sometimes they Play Dirty Games to beat their Opponents. The Doves believe the Economic (Rational) Fairy Tales of the Hawks and are unable to understand the Real Value of their Money.

The Money Illusion is caused by Inflation. Inflation happens when prices Rise but the value of the objects that are priced stays the same. Inflation give people the feeling that they are making money but in reality they are losing money.

The Hawks use Inflation to keep the Doves Buying and Investing. They also use the weapon of Inflation to win the war with the other Hawks.

The Majority of the Human Beings are Doves. They believe the Hawks or are afraid of the Hawks. The Doves are the Workers in the Economy and they make it possible for the Hawks to Hunt.

The Hawks provide the Workers with many things to live an easy life until other Hawks start to Attack the Territory. In this case the Hawks need the Workers to fight and win the War.

Sometimes even the Hawks lose their Rational Capacity. They see a Big Win and become Greedy and Vulnerable. If this happens the Territory is open for other Hawks (The Chinese?) to enter and to take over without any problem.

What has Happened?

The Economic System is just like the Weather System a Cyclic System. When the Economic Cycles and the Weather Systems move UP the Hawks have an Easy Time. Their is enough food for all the Hawks. When the System is going Down Competition starts.

The Hawks forgot to look at the patterns. They did not see or believe that the downfall was approaching. They did not take enough stock to survive the Seven Bad Years. Suddenly the Autumn turned into Winter.

At this moment they are regrouping to create a Powerfull Alliance to take from the other Hawks what they need. They don’t care about the Doves. They always believe the Tales they Tell.

They are afraid of the Other Hawks that are outside their Huge Territory and are Prepared to Fight the Wars that are needed. The Doves will believe them as usual.

### About Very Long Term Cycles

Thursday, November 27th, 2008

Kondratiev did not look at very long term waves that span many generations. He also did not realize that the Kondratiev-Wave contains a Fractal pattern, the fractal of the Seasons.

A fractal-pattern repeats itself on many levels with different periodicity. If you understand the fractal pattern, the levels and the frequencies of the Harmonic Universe, it becomes very easy to predict the short and long term future. According to Kondratiev the Depression will end around 2012.

The harmonic levels interfere, creating resonances or overtones. The self-referencing harmonic structure of the Universe can be seen in Nature, Music (the Music of the Spheres) and Colours (The Seven Rays).

One of the most important cycles for this moment is not the Kondratiev but the Precession. It is a very long time cycle with a periodicity of about 25.000 years.

The Cycle played a very important role in Astrology. The precession predicts a very important transformation around 2012. This transformation coincides with the start of the Spring Phase in the Kondratiev Cycle.

Around 2012 the Very Long Term Precession Cycle synchronizes or conjuncts with the “long term” Kondratiev Cycle. The Cycles are “added up”. Around 2012 we will experience a Giant Jump into the State of the Imagination and Creation.

Another very Long Term Cycle is the Cycle of Culture. This Cycle has a periodicity of 1250 years. Strangely enough this cycle also moves into the Spring-State around 2012.

The coming Spring-state in 2012 will start with an Innovation the World has never seen before.

The states of the cycles, the Seasons, are related to “Themes” or “Meta Narratives” (Myths). The old Magi, the Astrologers, used these themes to explain what would happen to the layman.

They projected the Story of the Precession on the Movement of the Stars and the Constellations. The Story of the Precession, the Zodiac, can be found in many myths in many cultures. If you understand the Myths of the Zodiac you know what will happen on the very long term and why it is happening.

The same Meta-Stories, written in the language and the metaphors of the Middle Ages, were later projected in the Cathedrals of the Masons. If you walk the labyrinth you will be guided through all the stages.

The meta-stories always appear in literature, art and in our time in Movies and Games. The Theme of the current Season is easily identified when you understand the Meta-Patterns.

Michael Bahktin found the meta-patterns (Chronotopes) of the Magi in literature and Joseph Campbell found the same Meta-Narratives when he researched ancient Myths.

He called the meta-patterns the Hero with a Thousand Faces. What is going to happen in the Short Term is visible in your Dreams. Jung has spent all his life to find the pattern behind dreams (The Archetypes). The Archetypes can be easily mapped to the meta-patterns of the Hero, the Chronotope and the Zodiac.

When you reflect about your dreams, the movies you like or are afraid of, the books you read, the paintings you paint, the poems you write and even about the “slips of the tongue” you know what is going to happen in the short term. Your Unconsciousness knows everything and the only thing to do is find the key to understand what it is telling you.

The theme of the Quest for the Grail, the Infinite Resource, is the theme of our Time. This theme is not a coincidence. Coincidences (signs and signifiers) are also not happening for nothing. They are trying to tell us something. The Western Mind has lost its focus on Signs, Dreams and Coincidences. They are funny or interesting stuff to talk about. I advice you to take them seriously because the Winter of Kondratiev in combination with all the other conjunctions will finally force you to accept a World behind the World you are Seeing.

The World behind the World is already known by the Physicist. They understand that the World is a Self-Reference, a Fractal. They also know that Linear Time is an Illusion and that there are many Universes. These Universes are now highly mixing with our own Material Universe.

This happens when major waves conjunct. Suddenly people start to communicate with Ghosts, talk with Trees, are aware of Extra Terrestrials and have strange feelings about being in different times in history at the same place. Believe me You are not getting Crazy! You are moving like every Soul on Earth into the Great Conjunction.

The Cycle of Culture repeats itself just like the Kondratiev. We are not only going to repeat the Great Depression (Kondratiev) and the Phase of Aquarius (Precession). We are also repeating the Dark Middle Ages (2008-1250=758). Don’t you think our Time has a lot in common with this phase in Western History? It is not difficult to detect the new Witch-hunters (the Inquisition), the new Crusades (Iraq, Afghanistan), the new Plague (Aids) and the new global warming (The Medieval Warmth Period).

### How to get Very Rich during a Depression

Thursday, November 27th, 2008

The Kondratiev Wave predicts the long term behavior of the Economy. If you look at the Kondratiev Wave, the next stage after the Depression (Winter) is called Spring. Spring is the Time of the Seeds (new Ideas). They where harvested in Autumn. During the time of the Winter the seeds are dormant.

When the Harvest was rich, Winter is a time of Contemplation and Rest. Nature hibernates. Plants, Trees and many Animals sleep and are in the state of the Unconsciousness. When the Harvest was poor, Winter is a time of big trouble.

There will be shortages of Food and Fuel. When the Harvest was poor Winter is a time of Social Unrest and even Social Conflict. During the Kondratiev Winter Big Wars are fought and the Dark Side of the Unconscioussness shows itself in the extreme rise of Psychological Problems (Stress, Addictions, Paranoid) and Dark Religious Movements.

During Winter Shares, Paper money and other Imaginary forms of Wealth are worthless. When you want to buy something you have to deliver real value (Cash, Gold, Silver).

It is very clear that You can Make Big Money during a cold winter when you have gathered a huge pile of primary commodities (“raw materials”). During Winter raw materials are exchanged for other raw materials. When you don’t have access to these materials the only thing that is left for you is Charity.

When you are the owner of raw materials and you are making a lot of money you are Making Use of the Situation. During a cold winter you have to give to the poor and the sick. To make it very clear Making Big Money during a Depression is a Crime.

When you are Rich you can accumulate Social Value by giving away your Material Wealth to Others. During a Depression Material Wealth has to be transformed into Social Wealth to prevent a Social Conflict. This investment will pay back with a lot of social interest during Spring and Summer.

Unconditional Giving, Charity,  is a very old fashioned concept. At this moment we “give” a loan and we “ask”  interest but “giving and asking” are really “demanding”. We want to make sure that what we give will be returned in the same state. More Money for Money, an Two Eyes for an One Eye.

When we don’t want to deepen the down path of the Depression we have to leave behind the Behavior of the Expansion phase of the Cycle, Summer. When the Economy expands it is “easy” to accumulate Wealth. Loans and interest are helpful to bridge a temporary dip in the flow of cash. Summer is a time of fast moving Ups and Downs in the Economy (Recessions).

It is not strange that we are copying the behavior of the Summer. Long Term Cycles just like very fast moving Cycles are not noticed by the Human. They are generational. The pattern repeats every 50 to 60 year so the people that must be Aware of the current situation are Old. They are the grandmothers and the grandfathers, the older people (>75).

Moving through a Depression needs Wisdom and a Long Term View. A Depression is the time to Listen to the Older Generation. Hopefully they have Learned from their Mistakes at that time.

### Why a Depression Takes Thirteen Years

Wednesday, November 26th, 2008

The start and the end of the current depression was predicted a very long time (1922) ago by Nikolai Kondratiev. The Kondratiev Cycle is an economic cycle which lasts between 50 to 60 years.

Kondratiev predicted that the current Depression will start in 2000 and end around 13 years later. Kondratiev used the Seasons to name the phases of his Cycle. We are now in the phase of the Kondratiev Winter.

Spring is marked by economic expansion. Savings are at fairly high levels, and interest rates are low. Stocks and real estate are the most successful investments.

Summer is marked by high inflation, high interest rates and by volatility. Commodities, gold, and real estate do well during the summer. This is the time to sell your Phoenix house fast and make a nice profit.

Autumn is the happiest phase of the Cycle. This phase started about 1982 and ended around 2000. During Autumn paper financial investments like stocks and bonds always do best. It is characterized by speculative bubbles or manias in stocks, bonds, real estate, and collectibles. On the other hand, gold, silver, and commodities collapse. Unfortunately, the Autumn is also marked by a serious decrease in savings, and a dangerous and reckless increase in debt. The imbalances build up to the point where they cannot continue. That’s where we are now.

When Winter arrives the insane excesses of the Autumn are purged and cleansed. The ultimate result is a deflationary recession or depression. Debt is repudiated. There is usually a banking crisis. Bankruptcies and foreclosures increase, as does social discontent. During the Kondratiev Winter, gold and cash are the best investments.

It is very strange that almost nobody believes the Kondratiev Cycle is a tool to predict the Economy. If people would have believed the Cycle it would be very simple to move through the Depression. In the UP-state you have to save money to sustain the DOWN-state. When you don’t do this the DOWN-state will bring you in to big trouble. At this moment the World has used almost all his resources. We have saved almost nothing to move through the deep recession.

In 1931 the US Department of Commerce assigned Edward Dewey the task of discovering the cause and underlying dynamics of the Great Depression. The US Government created a special institute the Foundation for the Study of Economic Cycles. The US Government never took the research of the Institute for granted or used it for another purpose (Financial Warfare?).

The most interesting observation of Dewey is that Cycles restore themselves all the time and Cycles are influenced by other Cycles. They are entrained. We are not talking about a single isolated Economic cycle. The Universe is an Integrated Harmonic System. The Universe is a Wave that generates Waves that generates Waves. At this moment Physicists believe this is the case (String Theory, Plasma Theory).

To me it is unbelievable that Economists like Milton Friedman called the ongoing statistical research of Dewey and many related Cycle theorists “not scientific“. To me it is also unbelievable that almost nobody takes even a look at the enormous amount of data that is gathered. I believe ignoring the scientific facts of the Cycles is not only stupid but also a crime. It is a crime because by constantly ignoring and pushing the cycles the whole harmonic system (including your Body, the Weather, Society, Earth) gets out of balance.

The Cycle of Kondratiev is a “long-term” cycle but there are cycles with a much longer periodicity (The Precession). The “short-term” cycles of the Kondratiev Ride The Wave of the Very long term cycles. If a very long term cycle moves down the Kondratiev also moves down much deeper and much faster.

This is happening and we are totally not prepared to cope with the new phases of the “dominant” long term cycles. The Harmonic System is preparing to Jump to a new State of Balance. This State has been given many names like Time Wave Zero (Terrence McKenna) and Point Omega (Teilhard de Chardin).

In the old age the Scientists who studied the cycles were called Astrologers. They have gathered a lot of data about the Cycles. Just like Milton Friedman we think Astrology is not scientific but many people just ignore that we are now equipped with much better tools and theories to explain what is happening. The old Astrologers did a spectacular job without computers, telescopes and a highly developed mathematics.

If you read the Predictions of the Old Astrologers like The Maya and The Magi you have to understand that they wrote in the language and the metaphors of their time but their message is the same message McKenna and other Cycle-Theorist want to tell.

The Case for Cycles, R.Dewey

About the Cycle of the Climate

About  the Cycle of the Seasons

About the Very Long Cycle Theory of Terrence McKenna

About the Transformation Phase of the Cycle

### About the End of the Stock Market

Monday, October 6th, 2008

The Amsterdam Stock Exchange was the first stock exchange to introduce continuous trade in the early 17th century. The Dutch pioneered short selling and every other “modern” instrument. Until the sixties Government and the Big Companies were controlled by about 200 Rich Dutch Families (including the Royal Family). They controlled Society and took care of Stability.

In the 17th century the Dutch East India Company (VOC) was introduced by the Dutch Government. The VOC was the first multinational in the world and the first company to issue stock. It was the first mega corporation possessing quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies.

In the 17th century about 200 families, the so called Regenten, were in control of the Netherlands. The families promoted their members in every influential position available.

The Democracy of the Netherlands was in reality an Oligarchy. The “oligarchic way” of decision making, the Dutch Polder Model, is still the most important way to reach consensus in the Netherlands. Everything happens “behind closed doors”.

Until 1917 only the Rich people were allowed to Vote. The Rich Voted with their Money. In the beginning of the 20th century (1917) the universal suffrage for male citizens was introduced in the Netherlands. Two years later (1919) the female part of the country followed.

The Rich not only voted with their money they were also the most important owners of the Stocks. With the power of their stock and their money they helped their families to acquire important positions in the State and the Companies.

Until the Sixties the Rich maintained a very powerful social network based on reciprocity in the Netherlands. This network was not a local network. It was an international network. The influential Dutch Families were connected to comparable networks all over the world.

Around the Seventies the power of the Rich Families went down. They lost their influence in Parliament and in the Companies. The Flower Power Generation took over the Power at every Level of Society. After some time most of them lost their Ideals of Peace and Harmony.

They started to buy houses and shares and were helped by the Rising of the Economic Kondratiev Cycle. In contrary to the Regenten the Baby Boomers acted on their own. They were very Individualistic and never created a Social Network that could support Society.

Around 2000 the stock market started to vibrate and to go down. The same happened in politics. Many voters are now moving from party to party.

Who is controlling Society?

At this moment nobody is controlling Society. Society is taking its own course.

Who is controlling the Stock Market?

At this moment nobody is controlling the Stock Market. The Stock Market is taking its own course.

Not only the Stock Exchange but also the Political System and the Weather System are taking their own course.

Is there and end to this all?

I don’t think so.

Why?

We have entered the Downfall of the Kondratiev Cycle. During this Downfall the Old Institutions are destroyed and New Institutions take over the Power. We are in an “In Between State”. In this state everything is On the Move. Everything is Moving Up & Down, Left & Right. What many people don’t see that even the Center is Moving. The State and the Stock Exchange are not able to cope with the excessive amount of Movement.

What will happen at the End of the big Shake Up?

There are two possibilities. The first one is the return to an old center.  My guess is that we will move back to the State of the Renaissance.

The second possibility is “frightening” for many people. We will jump to an unknown state predicted by many Old Civilizations called the Fifth World or the Golden Age.

The Hopis call our time the “The Fourth Age of Man”. According to them the Earth has been wiped clean 3 times already. First by Fire, next by Ice, most recently by the great Flood approximately 11,000-12,000 years ago. We are now entering the last stage of the Fourth Age called “The great day of Purification“. This stage culminates either in total Rebirth or total Annihilation.

The Degree of Violence will be determined by the Degree of Inequity caused among the peoples of the world and in the Balance of Nature. In this crisis Rich and Poor will be forced to struggle as Equals in order to Survive. The beginning of the Fifth World will be heralded by the arrival of a being known as Pahana, or the lost “White Brother“.

If we believe the Prophecy of the Hopi and many other “Spiritual Movements (Gnostics, Sufi’s)” the only way that will save us from total annihilation is the Creation of Balance. We don’t have much time left. The Great day of Purification will happen at the End of 2012. At that time the “Lost White Brother” (The Center) will return.

Is it possible to Balance the Financial System?

Yes, I think so.

The only thing we have to do is to Unite Shareholders, Customers and Workers and give them an Equal Share in a Company. They have to Share the Power, the Profit or Loss, the Spirit and the Soul. They have to become Enthousiastic about What is Happening (Spirit).

They have to take care of Nature and the Other (Soul). If we do this we will recreate the Social Power Network of the Rich on a Different Scale (Earth) with other Participants. If we Help the Other we don’t need a Pension!

I am sure You want to put Your Savings into a Shared Enterprise. I am also sure that You will Never Regain the Money you will invest in Shares at the Stock Exchange. The Era of the Stock Exchange is Gone for Ever.

### Why I have Decided to Leave ABN AMRO

Monday, September 29th, 2008

I am a customer of ABN AMRO for more than 40 years. Last Friday I received a letter from ABN AMRO. They told me that the local branch office of ABN AMRO will be closed and integrated into a local branch office of Fortis.

One day later negotiations started to save Fortis from bankruptcy. Today I read that ABN AMRO has to be sold to another bank. This will not solve the problem at all. It will speed up the Process of Desintegration of the Banking Industry that has started ten years ago.

Just one year ago I wrote three blogs about the Merger of Fortis and ABN AMRO. Based on my own experience with the Merger of ABN and AMRO I predicted a possible failure of this merger. I predicted a possible failure because I did not believe the Technical Infrastructure and the Culture of both banks could be easily matched. I was Right. The Credit Crunch was the Cause of the Downfall but the Culture and the IT-Systems were the real reason. The Aim of Management was to make Big Deals (to get Big Bonusses) and the Systems were unable to provide the Right Data.

I have been working in the Money Market for a long time. In my opinion the biggest problem in the Banking Industry is the relationship between the Accountable, Bookkeeping, Systems and the Activities of Dealers. A small part of the Dealers are and were taking Enormous Risks by creating very complicated financial constructions (Derivatives). The Auditors (and the Management) of Banks have lost Oversight a very long time ago. This problem increases in severity when banks are merged.

Every time when a New Technology is implemented the Quality of the ICT-systems deteriorates. This has happened so many times that nobody really understands what the IT-Systems are really doing. Every time when a merger is accomplished the financial data of a bank (or other company) deteriorate. Two of more deteriorated systems are connected creating a bigger mess. Every time when a merger is accomplished the people who have an understanding of the ICT-systems know less about the Systems.

When a Merger takes place the motivated and skillful employees leave the “sinking ship”. The people that remain become “apathic”. They perform their duty in a “nine to five”-mode. Innovation stops. External advisory companies (or worse) outside outsourcing companies take over the maintenance and the development of the software. The quality of the software deteriorates again. The problem increases when packages or software layers are implemented. This happened in every bank around the world.

When I worked with ABN AMRO the biggest mess in IT was always created in the US. The main reason was the “opportunistic” attitude of the Management or the entrepeneurs attitude of the Management. They experimented with everything they could find but never finished anything. The US Financial System was far behind the Dutch Financial System in terms of Products and Supervision. Everybody believed the US was the most innovative in everything but they were certainly not the most advanced in Banking and IT.

ABN AMRO was one of the bad performers in the Consumer Banking Industry in the Netherlands. The personnel of the Bank were not motivated for a long time. The main reason was the Management. Everything was decided at the top in big Staff Departments. The Branches were forced to implement what they had designed.

The Management of the Bank loved to do Big Deals with Big Companies. ABN and AMRO were Deal-Making companies and were forced to move into the Consumer Market when the employees of all the companies in the Netherlands were forced to open bank-accounts. The Customer was never priority number one.

The decision structure of the Bank was highly complex and changed all the time. Employees at the branches were not allowed to take initiative. When they had taken initiative it took a long time before the decision was made. Most of the time the answer was negative.

The forced merger with Fortis decreased the motivation of the employees. It increased the complexity of the IT-Systems and the decision structure.

Fortis needed money and many parts were sold to other banks. Every time the Organization and the ICT-systems of the bank had to be divided in many parts. Before this process was even settled a new split was announced. This process was repeated until today.

The Consumer Banking Division of ABN AMRO, the “beautiful pearl” Fortis was after, was carefully protected. The integration of this part with Fortis proceeded. Many people moved to Brussels to create and implement a plan. Many outside advisors earned a lot of money again. Nobody had any oversight. A few weeks ago somebody finally decided to merge the branch-offices. They created new organization structures, appointed new managers, talked with the employees and send an announcement to their customers. This announcement was received last Friday! Two days later all the projects have been stopped and the employees of Fortis are leaving ABN AMRO. Nobody knows what to do!

The financial people were constantly trying to understand what the Risks were. Everytime a new problem arose and the Board had to take action. The message to the outside world changed all the time and the investors lost their faith in Fortis. The End of the (Credit) Line was reached last Friday!

A few days ago somebody decided ABN AMRO had to be sold to another bank to create enough cash to pay the current debts. The process of integration has to be reversed and a new process of integration has to be started with another Bank.You don’t have to be an expert to understand what will happen. The end of this process will be Total Chaos.

I am not afraid I will lose my Savings. The Government will take care.

I am not afraid to lose my shares. I have sold them a long time ago.

I am not afraid the bookkeeping systems of the Bank will finally break down and ABN AMRO will deny I am a Customer or present completely different data about my savings-account.

I am sure many things will go wrong. During my time as a customer of ABN AMRO the amount of mistakes that were made increased. Most of the mistakes were small but some of them really cost me a lot of time and money.

I am afraid  nobody will be able to help me when things go wrong. I just want a little bit of Service. Nothing More. I have decided to leave ABN AMRO. I am moving to RABO-bank.

I hope they will not buy ABN AMRO or merge with another bank. If this happens I have to find another Bank but I really don’t know where to go. At that time I probably have to buy Gold or another Object that keeps its value a long time ago. I really don’t know what will be valuable in the future.

Perhaps I have to start a farm and grow my own food at a place that will not be affected by the rising of the sea-level or big tornado’s or big earthquakes or heavy rain or intense drought or intense cold when the Ice-Age starts.

About the Merger of Fortis and ABN AMRO (Culture)

About the Merger of Fortis and ABN AMRO (Software)

About the Crisis in the Banking Industry (Avalanches)

About the Crisis in the Banking Industry (Fraud)