Willful Practice of Ignorance

Plato could have scarcely imaged a state of civilization in which the Court of Appeals for the Federal Circuit would coin as obtuse an argument as the ‘willful practice of ignorance’. In my Pantheon of the Ludicrous, just beyond my Foyer of Incredulity, abutting the verdant Courtyard of Folly, the notion that anyone would actively ‘practice’ ignorance is embodied with a marble deity with a considerable portion of his cerebral structure deeply embedded in his own lower digestive, alimentary and excretory tract. This idol, affectionately known as Occidentus, is bathed in modified corn starch three times a day. The effluent of this offering fattens his priests while starving his worshipers with a bizarre famine of cerebral nourishment. Note that visiting my pantheon is not for the faint hearted.

While I encountered the far flung consequences of Occidentian adherents during my recent sojourn in Papua New Guinea and Australia, I was most intrigued by the juxtaposition of these encounters.

The first encounter was the published interview of one Mr. Greg Anderson, Executive Director for the PNG Chamber of Mines and Petroleum. When confronted with statements made by newly appointed Mining Minister Byron Chan regarding the constitutional and Organic Law fact that the resources of the land and sea belong to the people of the country (this is where you should recoil in horror at such a heretical idea), he stated that such an allegation is ‘playing with fire’ as it will ‘scare off investors’. Now, I’m sure that Mr. Anderson has a literal truth defense. If, by investors, he means the operators who have robbed the country of its resources with the cunning use of shell corporations, overt financing tactics to evade sovereign commitments, and explicit dealings to remove cash-flow from the reach of their local ‘partners’, he may be telling the truth. Alternatively, he may also be stating a truth if, by investors, he means the ventriloquists who have their hands firmly placed within him and by whom, if he doesn’t yell bloody murder at such a benign recollection of the law, his cushy compensation may be ‘down-sized’. In a world where China has declared a de facto policy intonation advocating for a commodity (possibly metal) currency standard, what he doesn’t mean is bona fide financial investors seeking to participate in genuine, risk managed resource production.

His fear mongering is analogous to the driver of a getaway car who, while dozing off fails to alert the robbers that police are on the front steps of the bank as they run out with bags of money. Such a driver should be appropriately scared of: the police who might nab him; his robber buddies for whom he was supposed to keep watch; and, any future hope at being a driver for another group of thugs. There’s plenty of fear available for those who have willfully exploited ignorance but, to ascribe it to a resource endowed country is, well, the evidence of an Occidentus adherent behavior. Given that billions of dollars are being minted on the hype of companies exploiting PNG and this wealth is accumulating on the expanding impoverishment of the country, it’s time for investors to stop turning a blind eye towards this behavior and start realizing that stable cashflows and sovereign risk are best managed with ethical treatment of sovereigns and people. The intangible assets – the rights granted by the government – are the key to economic engagement and it’s time that the global markets participate with, rather than exploit, the granting interests.

Far from the specter of ‘nationalization’ (reignited in the public with recent statements by Venezuela’s Hugo Chavez), Minister Chan was merely reminding current operators that he intends to enforce the constitution and the law. And while the World Bank and IFC may exert strong-arm tactics to intimidate this affirmation of an appreciation for law and order at the bidding of their patrons, the rest of the world should be encouraged that a member of the new government is actually referring to the law as a standard.

The second encounter was in the Sydney Morning Herald in which I read about the grave concerns about the faltering Australian economy with specific focus on the manufacturing and technology sectors. Following – belatedly – in the footsteps of the U.S., Europe, Singapore, South Africa, India and China, Australia made a number of untimely economic and policy choices. The one that struck me the most in reading about the sagging manufacturing and technology sectors was the ill-conceived notion that providing domestic proprietary pseudo-protection in the form of Australian ‘innovation’ patents (an internationally unrecognized proprietary seduction to make people believe they’ve invented something when they’ve really just incrementally modified other stuff). Promoted as a way to ‘stimulate’ entrepreneurial activity and venture capital, this policy has backfired. Not only have countless technologies developed by CSIRO and Australian universities and businesses been reverse engineered and expropriated by others, but, in some instances, the recklessness around this policy’s implementation has enticed investors into the illusion of value that has neither export nor domestic market value. Peddled by well-positioned consultants who plied their empty Silicon Valley wares across Australia just as the indictments of failure were surfacing in the U.S., the charlatans failed to point out that entrepreneurial success is about customers, not investors. And, as an island, continent nation, constraining innovation to domestic relevance alone is antithetical to a global, export-denominated world. Regrettably, unlike Japan and China (and the U.S. back during the creation of Silicon Valley’s illusion), the government as a primary and premium purchaser from entrepreneurial ventures did not materialize and, without this absolute necessity, the model fell like an ill-prepared soufflé.

Ironically, these events were unfolding as a macro-system reality was playing out on the global scene. In the past several weeks, Google, Apple, and Microsoft have been engaging in an unprecedented intangible asset buying spree. Rewarding bankrupt and defunct companies for thousands of patent artifacts with billions of dollars of transactions, these titans have been validating the existence and notional value of assets which are key to solving our looming second global financial crisis in banks. Every bank holds liens within their security agreements on intangible assets. Yet, to date, no bank on Earth can count the value of these assets against the collateral entered to calculate credit quality – a criteria for determining reserve capital. BIS and other regulators appear incapable of considering the possibility that accounting behavior last reformed in the post-World War II industrial era needs to be updated if there’s any hope of stabilizing a future banking system. Whether it’s resource rights in PNG or intangible innovation rights in Australia, these assets which govern all marginal cashflow from enterprise productivity are being ignored by financial institutions precisely at the moment that they’re achieving their most publicly recognized value.

Which leads me back to my mythical idol whose presence seems to be anything but mythical. Like Demetri Martin’s Paradoxataur – a creature that only exists if you don’t believe in it – current policy behavior seems to observe changing conditions and growing uncertainty and then willfully respond with solutions known not to be applicable. Word has it that Occidentus is riding across Jackson Hole on a Paradoxataur. Keep your eyes shut and persist in disbelief and in so doing, we just may have a chance of seeing some order emerge from the madness.

“Talking Business” in New Ireland

Mediocrity is self-inflicted. Genius is self-bestowed
-Walter Russell, 1946


During a meeting of Local Level Government leaders and landowners at the Sentral Neu Ailan (Central New Ireland) town of Konos yesterday, I had the pleasure of sitting with a number of individuals who share a deep passion for finding paths to increase their participation in the value being extracted from their land. In his opening remarks, the President of the SNA LLG zealously advocated for ‘outsiders’ to treat his community with respect. “If we’re here to talk business, then let’s talk business. Let’s negotiate,” he said with an impassioned pitch.

In my experience during the years I’ve spent working in Papua New Guinea, I have found countless paradoxes. From the vestiges of occupier language – particularly German – in Tok Pisin (the primary language) to the repurposing of Customary traditions to accommodate the growing number of tourists, I am constantly reminded of the cost of inconsiderate opportunism which has been visited on this, and countless other communities. When the nexus of nature – metals, energy, and food – coincides with people who have lived with these abundances without the perceived need to exploit the same, conquistadors have often exaggerated willful ignorance to coerce concessions of unspeakable proportions. ‘Talking business’ and ‘negotiating’ were occupier code for an implicit assumption of transacting the removal of value by an outsider in a manner and for consideration that was, at best, vaguely perceived.

For the next several hours, I transacted ‘information’ under the assumption that, with information would come a greater awareness of the effects of past ‘negotiations’. This information included almost two hours of detailed reviews of financial statements and corporate machinations of a multi-national corporation who, through the cunning use of ignorance, has succeeded in extracting millions of dollars from the country and from international investors – willfully duping both. Ironically, just as the company misrepresented its benefit to the country, it also recently extracted funds in excess of $120 million from the World Bank’s International Finance Corporation, a Canadian Bank, and London investors without disclosing countless material legal and civil issues. Using predatory ignorance in Papua New Guinea, they merely constructed a stage upon which they could prey on the ethnographic and geographic ignorance of markets. Just like it was a safe bet that no one would ever inform local communities about the games being played with debt-filled shell companies, it was an equally safe bet that no one would ever inform the capital markets of the material mis-representations of the company.

So it was particularly poignant that, as I boarded my flight from Kavieng to fly over the Bismarck Sea, I pulled out my stowed reading: “The Man Who Tapped the Secrets of the Universe”. This short essay by Glenn Clark on the life and thoughts of Walter Russell is dense illumination into the experience of a man of great consequence. Russell’s Five Laws of Success (Humility; Reverence; Inspiration; Deep Purpose; and, Joy) served as a generous invocation on the dawn and benediction on the day past. More impactful in my reading, though, was Russell’s treatment of the essence of Cause and the simplicity of Source.

“Thus I was made to see the universe as a whole and its simple principle of creation as one unit, repeated over and over, endlessly and without variation, as evidenced in the universal heartbeat to which every pulsing thing in the light-wave universe is geared to act as one unit of the whole.”

In his understanding of this unity, he explains that toxicity, pathology, and destruction are merely evidences of things out of phase and in dissonance with the unifying, animating pulse. In his admonition, I hear the echo of the simple axiom I conveyed to my children each time I gave a bit of life advice. “Focus and balance,” I would say, “are the only two abiding principles. Hold these and the rest of life will fall into clear alignment.” What I experienced through the oration of the SNA LLG President was that out-of-phase dissonance that evoked a response in me. To address the diffuse EFFECT of exploitative ignorance, one must discern SOURCE rather than CAUSE. In the linear hubris of regression, we could assume that the CAUSE was a company who chose to mislead and, in a single dimension, we may be correct. However, that company is a component of an ecosystem in which the SOURCE of the dissonance comes from a theme we’ve been addressing in several recent posts – namely, surrogacy. By allowing an unaccountable ‘other’ to procure anonymous, hoardable wealth, we all foster predation in which suffering is a by-product. And tragically, the ‘prey’ turn to the language of the predator to seek solace from their abuse and, in so doing, perpetuate their injury.

Yesterday, the careful application of information dissemination took a first, tentative step towards the emergence of a new narrative – not just for the people of New Ireland but for the investors unknowingly, primitively isolated from their own awareness and complicity.


My soul quickeneth with the beauty of the dawn.
Today is, and will be.
Yesterday was, and has been.
I will reach out my hand into the darkness and lead him that asketh into the light.
My day shall be filled to overflowing, yet shall I not haste the day; nor shall I waste the day.

- from The Message of the Divine Iliad, Walter Russell

Somewhere Over the Rainbow

"In your light I learn how to love.
In your beauty, how to make poems.
You dance inside my chest where no-one sees you, but sometimes I do,
and that sight becomes this art."
— Rumi


Today I got to be a Dad. Yes, technically ever since that snowy gray day in Goshen, Indiana over 22 years ago when we found out that Katie was on her way into the world, I have been legitimately a member of the fraternity, but today was far more than biology. Today, we moved Zach into his dorm to launch his university career and, with this move came a haunting of the ghost of me in years past.

I remember sitting in the Purl St. house in Goshen with a few friends right after Katie was home from the hospital. John and Mark were standing with me looking down into the rocking cradle that my Dad had made for me (now sitting in our basement among other memories). Laying in a pillowy mass of blankets and fluffy things was a beautiful baby girl.

“What are you thinking when you look at her?” either John or Mark asked.

“You know,” I responded, “the truth is that I hope to see her get to college age having a foundation of confidence and with the certainty that she is loved. If that happens, I will be the proudest, most grateful man I could imagine.”

I don’t know which one of them asked me the question and, in truth, it doesn’t matter. Because what does matter is that today I got to see the other end of aspiration and got a rare opportunity to look back across 22 years to a me then. I had more hair on my head. I couldn’t stand without braces and canes from my many surgeries. I was embarking on a life that bore no resemblance to what I had expected just a few short years earlier. Whatever was left of a fantasy of ‘ideal life’ was either dead or comatose. I would learn to walk with my children – literally and figuratively.

And what an awesome journey! In Katie I got to see the power and the sorrow of a person gifted with a quick mind, deep perception, refined intuition and walked into life with her as we both learned how to be ‘different’ in communities and cultural contexts which regress masses to a mean. In Zach I got to learn the strength of compassion – compassion for everything: animals, nature, people. Through their eyes and in their words I was given a constant path to see my insights, words and actions reflected in admonishing brilliance. Zach taught me to look beyond my conscious perception to ‘see’ what wants to be seen. Katie taught me to embrace influence without striving to manipulate.

Wealth and the metrics we use to assess it are illusive vapors. Depending on context – defined by time, geography or external factors – they may be as fickle as a light summer breeze. Moving into his dorm room (complete with his signature rumpled bed sheets; his abundance of t-shirts, his immediate embrace to jump confidently into his nervous, illusive unknown next) Zach gave me a gift of perspective. Across two decades, I got to visit me. And beyond just a nostalgic reflection, I got to tell younger me that I got it right. Having two amazing kids successfully embark into life with a foundation of confidence and the certainty of love did, indeed, live up to its billing. I am a proud Dad and a grateful man. And when I arrive in Papua New Guinea in two days and embrace Katie, the arms around her are those not just of a Dad and man, but of a person, who in deep reverence and appreciation, acknowledges that as teachers and masters, my kids have refined my path. Thank you.


_

S&P and the tale of $2 trillion (or $4.2 trillion)

_

In Alfred North Whitehead’s 1933 Adventures of Ideas, he joins other mathematician physicist philosophers from the period who admirably sought to reconcile societal dissonance evidenced in monetary policy, war, and the transforming gestalt of the role of Christian morality in a globalizing world. Whitehead is well known for his critically acclaimed principle of the “fallacy of misplaced concreteness” in which he shows the consequence of the failure to apprehend the nature of the essence of things and the conventional understandings of the same. He explores the social derivatives of this fallacy in which people separate, enter conflict (including going to war), and engage in destructive acts over ‘truth’ that is neither ‘true’ nor ‘reality’ – simply an unconsidered consensus.

The events of Friday of this week – the capping of a contentious and fallacious closely averted disaster around the U.S. government’s inability to find a path to accountability which, like the gusher in the Gulf, will emit even more toxic sludge when it fails in a few short months – provide a wonderful opportunity to consider Whitehead’s long forgotten wisdom.

Written in 1933…




Ironic, isn’t it, that the “remote chemical discovery” (don’t you love his resistance to using the term ‘alchemy’?) that would render gold of little value was anticipated to be more readily replaced by paper currency whose “number can increase…at their arbitrary will.” Who would have thought that a mathematician philosopher in 1933 could have seen into the mind of Ben Bernanke?

This week, the markets and politicians provided a plethora of fodder for InvertedAlchemy. However, what struck me most was the concrete fallacy that emerged around the controversy triggered by S&P’s decision to downgrade U.S. debt. Let’s be clear, S&P and the rest of the government-protected monopolist rating agencies (NRSROs), are incapable of rendering meaningful risk assessments due to the fundamental detachment they all share from assessing future productivity. Sell-side rating agencies, given the fact that they must serve as the concubines for two equally maniacal lovers – the debt sellers who buy favorable treatment and statutory buyers (like pension funds, banks, insurance companies and others) who are required to hold ‘investment-grade’ investments – couldn’t be objective if they tried. In their deal with the devil, they get monopoly protection through legislation in exchange for always saying nice things about those who protect their monopoly. If this sounds corrupt, it does because it is.

So, imagine the ‘gotcha’ thrill that happened when someone at the Treasury (represented by John Bellows, Acting Assistant Secretary for Economic Policy) found S&P’s much ballyhooed $2 trillion mistake. Clearly, the argument went, if you subtracted the $2.1 trillion estimated cost savings from the CBO analysis rather than adding it (which by the way, folks at the Treasury, makes this a $4.2 trillion mistake), the economy would look much better – so much so that a down-grading wouldn’t be justified. Tragically, by focusing the public attention on the gnat (o.k., rather large pterodactyl, but who’s measuring these days) of the error, the public fell for the S&P bashing without looking at the real numbers. So, to be clear, rather than being over $90 trillion in the hole – based on the error – we’ll only be something over $82 trillion in the hole. Don’t you feel better? Moody’s and Fitch should feel great that our nation is falling faster into unsustainable growth of debt and entitlements at a pace that would require us to more than quadruple our GDP growth and, because of their august wisdom and impeccable insight, they still see ‘investment grade’ when they’re looking at the U.S. debt.

The Chinese are right. We must get our financial house in some semblance of order. Note that I wish we would actually begin telling ourselves something that more closely approximated the truth but I’m not sanguine that that’s likely anytime soon. But between now and then, we need to revisit Whitehead’s axiom. Ratings are not truth. Ratings are not derived from independent, forward-looking assessments of productivity. Ratings are illusions created to fulfill a demand for a specific type of investment instrument whose production is required by statute. If we want transparency, we’ll have to tackle it through banking, insurance, pension, ERISA, and securities reform and that’s unlikely given the House divided. S&P is neither the cause nor the effect that people have made them out to be. They were complicit in the failure of financial products in 2007 and 2008 and, with their co-monopolists at Moody’s and Fitch, they will contribute to more market carnage in the future. But, let’s be clear, it’s all of our reliance on a fallacy of misplaced concreteness that precludes We the People from raising our voices to advocate for greater risk assessment and future productivity insight. And that’s something we can all change today.

Beyond Surrogacy – Gathering in the Meadow at Runnymede

“If, then, the control of the people over the organs of their government be the measure of its republicanism, and I confess I know no other measure, it must be agreed that our governments have much less of republicanism than ought to have been expected; in other words, that the people have less regular control over their agents, than their rights and their interests require.”

“Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally, by the laws of the Creator of the world, to the free possession of the earth he made for their subsistence, unincumbered by their predecessors, who, like them, were but tenants for life.”

…from Thomas Jefferson’s Letter to John Taylor, Monticello May 28, 1816

“Wherefore we will and firmly order that the English Church be free, and that the men in our kingdom have and hold all the aforesaid liberties, rights, and concessions, well and peaceably, freely and quietly, fully and wholly, for themselves and their heirs, of us and our heirs, in all respects and in all places forever, as is aforesaid. An oath, moreover, has been taken, as well on our part as on the part of the barons, that all these conditions aforesaid shall be kept in good faith and without evil intent.”

“Given under our hand - the above named and many others being witnesses - in the meadow which is called Runnymede, between Windsor and Staines, on the fifteenth day of June, in the seventeenth year of our reign.”

…from the Magna Carta, 1215


I had the privilege of gathering with about twenty five magnificent people in San Francisco last week to engage in a dialogue about the foundations of our economy. During this interaction, we considered the degree to which our social systems – from our relationships with the Earth, our fellow humanity, and with our values and the exchanges thereof – are based on surrogacy (from the Latin meaning “cause to be chosen in place of”). Surrogacy exists in a number of forms, a few of which include:
- our use of currency and notes to represent value and the exchange or accumulation thereof;
- our unconsidered, yet ubiquitous use of Aristotelian concepts of causation and regression every time we ask the question, “Why?” (y = mx +b for the mathematicians, and Why = Measured phenomenon + unexplained error for the philosophers and drunks);
- our Aquinian view of hierarchies in which someone or something is ‘responsible’ for some or all portions of our temporal and existential experience;
- our notion of dominion and entitlement in which we, without consideration, allow others to act on our own behalf to supply our unconsidered conveniences of materials, services, and animating energy / power; and,
- our use of religious constructs, narratives, and idols to absolve ourselves of present accountability for future ‘judgment’, ‘reward’, or ‘retribution’.

As we have discussed in previous essays, an accessible example of surrogacy is the relationship that takes place when one transacts a purchase with money. When I walk into a café, I carry a few dollars, approach the counter and place an order. In the name of convenience and efficiency, I hand the money to the person at the register and, in so doing, I’m explicitly stating that with this transfer of an artifact (existing only in a consensus illusion of value without any intrinsic value), I have absolved myself of any future need or desire for any form of relationship. The matter is finished. When I receive my beverage there is no persistence of humanity between me, the clerk or the server. We’re done. But embedded within that transaction, I’ve also allowed the money to insulate me from the grower of coffee, the roaster, the shipper, the grinder, the barista – none of whom I need to consider (nor may I want to consider). Further, I require no knowledge, consciousness, or concern regarding the wood pulp pressed into a disposable cup, the resin molded to form the plastic lid nor the engineer of the espresso machine. A corollary of the notion of surrogacy is the mantra of ‘efficiency’. In our post-modern mode of detachment, the more we can insulate ourselves from our actions and the field effects thereof, the more ‘efficient’ we hail the system.

At the most superficial consideration, we may conclude that, in the frenzy of our tempo, stopping to think about the entire field effect of our actions and engagements is either impossible or unnecessary. However, I would suggest that this impulse finds itself at the root of our incapacity to effectuate a more suitable experiment with the world in which we find ourselves. Would we consume that which we do if, in so doing, we would look into the faces of all of the people that played a role in putting a good or service in our hands or at our disposal? Would we regress towards a monetary system if we could use abundance within our direct stewardship as a means of engagement and exchange? In the Magna Carta, referenced above, is it any wonder that the document is relatively neutral with respect to money but highly energized with the means of production – things like lands, forests, title, and community?

One of the structural weaknesses of our systems built on surrogacy is our ill-founded notion that somewhere there must be an expert, a guru, a master, or a diety who is watching out for, or over us. By convincing ourselves that we need to be ever outward in our quest to find sustenance, morality, or justification, we fail to understand that all externalities are merely utilities of manifestation for which personal and community stewardship can be exercised. The ‘good’ and ‘bad’, the ‘powerful’ and ‘weak’, the ‘sacred’ and ‘profane’, the ‘rich’ and ‘poor’ are but poles on a magnet – holding no intrinsic value but rather serving as attractors and repellers of energy and animation. Placing this energy and animation in the hands of others – whether through social systems, community hierarchies, or artifacts – robs each of us from our ability to fully engage in our ecosystem.

Jefferson was deeply concerned with the separation of people – as individuals and generational cohorts – from the consequence of their actions. He warned against political and religious systems that reinforce such detachment. In the Magna Carta, the barons explicitly stated that, for them to enter into agreements with the sovereign, they would take full responsibility for all of their physical and emotional impulses – both positive and negative. These sources of inspiration share a number of phenotypic similarities but, principle among them is the complete rejection of surrogacy without constant accountability from those who assign powers to a surrogate. In other words, no surrogate can work if there is not constant, informed vigilance on both the artifact of stewardship appropriated from the right holders to the custodian and the actual behavior and performance of the surrogate.

Which brings me back to San Francisco. During our conference, it became quite evident that notions of productivity and utility were unconsidered. It was clear that the difference between debt, equity, and credit were indistinguishable in the minds and lives of most of us. The principle of First Order accountability – actually consciously engaging at every level of all elements of our existence and the enablements thereof – was an inaugural, disciplined journey for all.

Not under the leadership of a master or guru, not under the banner of sovereign or politician, we the people need to reconvene at our Runnymede and reconcile ourselves to the fact that we’ve entrusted far too much with neither conscious consideration nor the means to maintain vigilance and accountability. And, having arrived at a considered review, we need to, once again, elect those things for which we’re willing to literately transfer surrogacy and those things that require our direct supervision and responsibility. As we watch events unfold this week in the madness in Congress around the nation's and the world's finance, we must all remember that we are not victims. We are those who ceded our stewardship and accountability and we now need to reclaim and animate the same.

Electromagnetic Money – A Novel…

The following post is entirely for amusement value only. This is a work of fiction. Names, characters, places and incidents are the products of the author’s imagination. Any resemblance to actual events, locales, persons living or dead is entirely coincidental. After all, sometimes, serious people like me need to have a bit of fun. Enjoy!

On July 22, 2011, the Washington Times published a report on information from a classified assessment from 2005 in which the National Ground Intelligence Center suggested that China may have electromagnetic pulse (EMP) weapons that could be used in future conflicts. This was not news. For years, China, Taiwan and others have joined the U.S. and Russia and several European states in assessing the viability of high altitude and non nuclear EMP (HEMP and NNEMP, respectively) as a means of crippling computers, communication systems and infrastructure. Like the Pakistani submarine capabilities developed using French and U.S. technology, the Chinese unmanned undersea vehicle programs which use seabed magnetism and topography for undetectable navigation and countless other systems, this ‘breaking news’ is neither breaking nor news.

In 1962 and in the subsequent years, projects like Operations Fishbowl, Starfish and others successfully tested EMP and HEMP devices with devastating effects to power grids and communication systems in Hawaii. The ability to detonate a nuclear device – and other impulse generators – and, in so doing, create blankets of electromagnetic disruption has been well known. The Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack issued its Critical National Infrastructures Report in 2008. The report details the nature of the threats and provides numerous indicators to individuals and institutions whose work is well documented. And, in recent years, Congress and the White House have publicly (if you actually pay attention) expanded budgets for shielding of Department of Defense Infrastructure.

So I was intrigued by the release, in the past week, of several reports about the Asian ‘threat’ of EMP and HEMP attacks. And I wondered whether these trickling leaks may have more to do with Leon Panetta’s June 9, 2011 confirmation hearing testimony than first meets the eye. While exceptionally well documented since the mid-2000s when the EMP commissions were organized, we’ve known about capabilities held by our nation and potential threats across the globe. However, as we’ve been nearing our unraveling fiscal crisis of confidence and accountability, the Secretary of Defense (the same man who had ample access to classified intelligence briefings of foreign and domestic capabilities at the CIA) decided to float the notion that an electromagnetic attack or cyber attack would enter military doctrine as a means to justify hostile reprisals on perpetrator states.

After taking a quick look at the GAO reports (from 2001 forward) about the infrastructure risks associated with the data centers that keep track of U.S. Treasury, Federal Reserve, and taxation records of the United States, I began to wonder if we may be building a narrative to explain one path to catastrophic resolution of our economic challenges.

Let’s take a step back. Facing a collapsing economic confidence in tandem with mounting costs of the Vietnam War, the U.S. balance of payments and trade deficits were undermining confidence in dollar investors. As foreign investors lost confidence in policies that failed to control domestic financial recklessness, many began demanding to redeem gold notes for gold. Switzerland, in July of 1971 demanded redemption of $50 million in gold. France, with considerably greater proportional exposure, decided to pursue redemption of nearly $200 million. With Congress recommending dollar devaluation during the summer and during acrimonious ‘debates’ between Democrats and Republicans, France decided to amp up their demand for the government to honor its commitment. And then, on a sultry weekend in August (really, we can’t even be creative with the dates when we choose to be dishonorable?) President Nixon closed the gold window sticking it to all of the Bretton Woods investors. Having defaulted in August 1971, Nixon began looking for a new interest who would be willing to invest in the U.S. and, lo and behold, he found an unlikely buyer – China.

Part of France’s incentive to support the dollar was the U.S. commitment to fight the war of liberation and democracy in French Indochina. When it was clear that neither the war nor our alliance with France was going to prove to be a winning strategy, we decided to target them to bear the brunt our accountability collapse and stuck them with the closed gold window. Now, in a world of digital and electronic records of trillions of dollars of Treasuries and in the face of a collapsing resolve from China to support our forty year excesses, we are beginning to condition the public to believe that China may ‘attack’ us with an EMP device. Is there a chance that we’re actually contemplating our own doomsday closure of the ‘Treasury Window’ by detonating, or inviting an erasure of the record of our obligations with, a giant EMP blast which, according to GAO reports, would wipe out considerable evidence of domestic and international financial transactions and obligations?

And wouldn’t it be convenient if, in the “I told you so record” (analogous to our post facto awareness about our terror enemies) we could show that Defense Secretaries and Directors of the CIA had been testifying that Iran, North Korea, China, or others were developing and testing EMP devices? You see, at 400 kilometers above the Earth’s surface, it’s hard to find the “Made in China” label on the side of the missile. All you see is what looks a bit like the sun. And then the power goes out, computers stop working, communications shut down, and the only thing left to work is propaganda. The whodunit story would be only told by the perpetrators / victims and the public would never know the truth. Best of all, we would have an opportunity to simply ‘forget’ that which we never intended to honor.

Measuring intent is a delicate and dangerous proposition. But, one thing’s for sure. You don’t have to be a rocket scientist (though it might be helpful if you were) to see that the recent co-emergence of default talks and the flurry of ‘news’ regarding information that was known for over a decade seem to make strange bedfellows. Having disclosed the EMP technology in patents issued to the U.S. Navy and U.S. defense contractors going back to 1969, our sudden concern seems to be responsive to some new, emerging narrative. And with the evidence of our obligations to the world’s investors all sitting in digital archives in centralized centers, and given our past willingness to default on those who assisted our economic growth, I sure hope someone’s watching the horizon a few minutes before a second sunrise over New Jersey, Virginia or Texas because following that contrail will help us figure out who erased our memory.

And if it never happens, it sure would make one killer Hollywood blockbuster…

From Russia with Love

This week saw the economies of scarcity – manifest in the Bretton Woods denominated (and now indicted perversions of) ‘promissory notes’ – teeter ever closer to the edge of their own demise. And we saw the soothsayers scurrying about in their frantic, ghoulish orgy of empty deferral as they rushed to find yet another potion to push back the hands of time (or defer the inevitability of accountability). No August 2 fix – neither by Democrats, Republicans, nor Tea Swillers – will alter the reality that the current system of disembodied consensus irresponsibility is irreparably damaged and is ripe for transformation. So, this post is NOT about the economy of the past but the agents of transformation. Specifically, this post is about a few great people who are working to transcend the requiem of scarcity into the anthem of abundance.

Years ago, I met Ken Dabkowski who, at the time, was working at The Arlington Institute. Tireless in his dedication to take the visions of TAI’s founder and render them accessible to a larger community, Ken struggled to find a path to help humanity wake up from the discordant stupor of present illusions. As TAI downsized, I invited Ken to sojourn with M•CAM for a season while he found a meaningful path to engage his passion and his destiny.

I can’t say I know, with any precision, where we are in that process but what I can say with absolute certainty is that Ken has found a path to render visions into reality. One year ago, Ken and I spent several weeks in Mongolia. Traveling from a camel herder nomadic community in the South Gobi to the highlands of Arkhangai – the ancestral core of the great Khan Empire – we noticed that, no matter where we went, the landscape was punctuated with old Soviet installations beside which resided vast mounds of vodka bottles. In fairness, present day Mongolians are adding their fair share of new glass to these troves but, there’s no question that vodka and its associated bottle litter is more pervasive than many other fixtures across the landscape.

During our journey, we were confronted with the refrain of need for better food security and agriculture infrastructure. Occasionally we saw greenhouses that had been built by Korean aid and development agencies. However, these aluminum frames, plastic draped constructions did little to withstand the violent sandstorms – a signature of the Mongolian climate – and as a result, many stood tattered in the windy desert and plains.

Using our Integral Accounting framework, we launched a program to take the native abundance – namely, vodka bottles – and use these to build windstorm resistant greenhouses. Ken undertook to develop this project and, in less than one year, we went from idea to construction. In partnership with people like glass engineer and artisan Bill Hess, beetle-kill lumber construction engineer Greg Smith, M-ICP logistics master Nergui Dorj, the ‘SoNo’ M•CAM Heritable Innovation Trust interns (lead by my daughter, Katie Martin), UVA’s Jefferson Public Citizens student grant recipients, Professor Bob Swap and a team from the Mongolian Academy of Sciences, together with countless others, the possibility of using the legacy of Russian vodka bottles to enhance food production in Mongolia went from concept to reality. None of this would have been possible were it not for the inspired leadership of Ken.

Is it possibly the case that if we look at the unconsidered litter of our industrial frenetic consumption, we may find that we have bypassed opportunities to confront today’s challenges with yesterday’s abandoned resources? Is it possible that the foundation for tomorrow’s transformation may come from a repurposing of today’s neglect? Is it possible that we could actually begin transforming our models for future engagement by repurposing what once served to foster dependency and addiction? Maybe the vodka bottle greenhouse is an anomaly that cannot be repeated. Maybe the world’s challenges are too great to be confronted with a re-imagined view of the ignored and abandoned. But then again, maybe not. What is important is that each of you knows that there’s a phenomenal young man who inspired an international team to transform the legacy of an addictive past into a fruitful future. His name is Ken and we’re all more fortunate to know that he’s in our world.

Make sure you take a look at the amazing slideshow at the bottom of the following website:

http://www.globalinnovationcommons.org/blog/mongolian-greenhouse