Diversity of Thought – Things we can’t imagine

2020-01-05 14.39.11-1.jpgA popular theme in the media is handwringing about the divisive nature of political discussion. Everything would be much better “if we could just get along.”

I’m not sure.

Social systems tend to overshoot, overreact, over-everything. When we have widespread agreement (think totalitarian states) humans tend to drive the bus off the road.

Can you name an area where we have wide-spread agreement across the political spectrum?

I can.

Deficits, borrowing, bonding.

Left-right, north-south, east-west, up-down, local-state-national-continental => near total agreement on the benign nature of government debt.

Because disagreement limits the size of potential errors, total agreement worries me.

A surprise in my 2019 was my state’s voters not approving a change to our taxpayer’s bill of rights. It is the only constraint, on the ambitions of government, I noticed last year.

We should not expect government (or friends & family) to “do the right thing” in advance of a crisis. Human nature isn’t designed to work that way. An increase in our collective tolerance of regulation and taxation (ie pain) doesn’t happen until after a crisis.

Our collective problems won’t be addressed until after they blow up.

My individual risks, however, can be addressed right now.

A collective belief in the benign nature of debt is self-reinforcing. While the debt cycle expands, asset values are inflated, consumption is pulled forward and economic growth is nudged upwards. Because of its ability to feed on itself, debt expansion can continue for a very long time, particularly with interest rates near zero. Ultra-low rates enable lenders to fool themselves about the credit quality of the marginal borrower.

What to do?

Life is not filled with only bad news! Am I able to take advantage of unexpected positive surprises?

It’s counterintuitive but I’m positioning myself to borrow a lot of money. My 2020 project is creating an option to borrowing 30-years fixed at an interest rate that none of us can currently imagine.

How might unexpected negative surprises wipe me out?

Consider who is getting out of hand with their current borrowings. What’s the credit quality of… your employer? your family? your largest customers? your local/state/national government?

Do you work for a high-leveraged company, in a state with massive unfunded pension liabilities, while rolling your credit card balance each month?

Hidden liabilities lie (mostly) hidden. Ponzi schemes, unfunded retirement benefits, promises for future spending, fixed price contracts… think about your life. Where do you have exposure to a single person, CEO, manager, employee, fund, investment? In an easy-money environment, it is possible to hide significant liabilities.

Things we can’t imagine are likely to be underpriced.

Kinda tough to imagine the unimaginable! What seems impossible to imagine? Inflation, interest rates at historical norms, rapid nominal growth, credit crisis in a large sovereign, large hot-war…

For me, the goal is not to predict the outcome. My main goal is to protect my lifestyle from shocks and surprises.

To make it real, I ask, “what could blow up ski season?” Health, injuries, illness => my current risks are more human, than financial. Think beyond the money.

To focus on new ideas requires us to reduce the noise in our lives. Are you engaging in a policy of constant distraction?

There is a lot we can do to manage our exposure to the errors of others. Bad companies, bad relationships, bad government… many of us have the ability to pack up and leave. I’ve lived and worked in eight different countries, on three continents. Gradually working towards a situation where the main person who can hurt me is myself!

As a young man, I spent many years exposed to the errors of a single individual (my bosses and my business partners). More common is exposure to the errors of a single corporation.

With preparation, you can benefit in times of stress, but first you must survive.

Fame, Meaning and Risk

2016-06-21 16.41.25A buddy asked me to have a look at the movie, Meru, a compelling account of climbing at the highest level.

What an amazing movie.

It reminded me of the themes that challenge my daily living.

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Fame

We share a need for connection and approval.

When I see someone with an extreme need for approval, I feel compassion for the child within them. I feel this because growing up with addiction, abuse or abandonment will crank up our need for approval/fame. My kids are lucky to have parents that are present and loving.

Try this antidote.

Lots of small acts of kindness.

I’ve been at it for more than 5,000 days.

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Meaning

Young people thrive when working together on a challenging mission.

In middle-age, many of your fondest memories will be a result of this reality. Remember that memory is a chemical signature of a story we tell ourself.

Coming back from the mission, or simply growing up, can leave a HUGE void in your life.

Applying the kindness tip gives you a dose of meaning but you’re going to long for a stronger fix.

Surprisingly, the mission might not need to be that much larger.

  • Build a veggie garden for your son
  • Teach your daughter to use an inflatable dinghy
  • Take your wife camping
  • Drag your son on a sled to a mountain lodge

I’m constantly giving myself missions. Recognizing that I’m larger than myself, my missions have an ever lower risk of death.

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Risk

Teach your kids to recognize, and be wary of, risk-seekers – especially the criminal variety. Risk-seekers are exciting when your under 25. They are a disaster as a partner in family living.

Another antidote…

Gradually expand your sphere of influence…

  • Your future self
  • Your marriage
  • Your kids
  • Your family
  • Your tribe
  • Your community
  • Your country
  • Your planet

At times, I found it useful to take a break from my risk-seeking pals. I’ve tried learning new hobbies. I’ve resisted the urge to constantly benchmark myself against others.

It takes courage to make better decisions.