To all:

A few more graphs.

I didn't have anything from Europe, so here's the graph for the
London FTSE (Financial Times Stock Exchange index):



These graphs all look remarkably similar over the last couple of
weeks. Where's the money going?

For comparison purposes, here's a graph of the Dow in 1928-29,
depicting the panic and crash of 1929, preceding the Great Depression
of the 1930s:



and here's a graph of the Dow in 1986-87, depicting the "false panic"
of 1987:



Early this year, I wrote about the Panic of 1987 as a "false panic"
occurring 58 years after the 1929 crash.
http://fourthturning.com/forums/view...=150871#150871

The number 58 appears to be a kind of "magic number" in generational
theory -- when a shock occurs, it's about 58 years later that a
generational takes place passing control from the people who remember
the shock and those who don't.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

John,

A proposal:

What if we replace your deflationary period with contractionary period? By contraction I obviously mean a decrease in real GDP. But such a contraction could be either inflationary or deflationary, depending upon how it evolves.

Under economically "normal" circumstances, yes, a contraction means deflation. But there have been awesome contractions in the past that were inflationary: Latin America late last century, Weimar Germany, Confederate America, Articles of Confederation America, surely many others.

In an inflationary contraction the value of the currency falls and prices, and even possibly wages, rise. But the wage increase if it occurs at all only occurs nominally. In real terms, adjusting for the rising price level, wages are actually dropping, sometimes by radical amounts. Per capita GDP goes to hell in a handbasket in real terms under such circumstances.

If . . . the East Asians dump Treasuries (killing the dollar internationally) and the Fed responds to a domestic crisis by turning on the presses, then we will have one hell of a inflationary contraction. These responses are not written in stone, of course. But in a dollar crisis, what else could global investors do? If half their portfolios (or more) are in dollars, dollars are rapidly losing value, and therefore their net worth is crashing before their eyes, what would they do? I would imagine -- SELL !!!!

Furthermore, Bernanke seems very, very wet to me. No Paul "Sahara" Volker is he. Helicopters dropping cash is the likely scenario.

There are two differences I see between the two contractionary scenarios. In an inflationary case, gold will go to the moon and good money will be destroyed with bad during the contraction, leaving us weakened and politically more unstable than otherwise.

In a deflationary case, gold will probably be a losing proposition and bad money will be flushed from the system, leaving us on a even keel when it's over and make it less likely (but still possible) that we'll have political chaos in the interim.

FWIW.

Dear Sean,

Originally Posted by Zarathustra

> A proposal:

> What if we replace your deflationary period with contractionary
> period? By contraction I obviously mean a decrease in real GDP.
> But such a contraction could be either inflationary or
> deflationary, depending upon how it evolves.

> Under economically "normal" circumstances, yes, a contraction
> means deflation. But there have been awesome contractions in the
> past that were inflationary: Latin America late last century,
> Weimar Germany, Confederate America, Articles of Confederation
> America, surely many others.

> In an inflationary contraction the value of the currency falls and
> prices, and even possibly wages, rise. But the wage increase if it
> occurs at all only occurs nominally. In real terms, adjusting for
> the rising price level, wages are actually dropping, sometimes by
> radical amounts. Per capita GDP goes to hell in a handbasket in
> real terms under such circumstances.

Would a contraction of this type really be inflationary or would it
be deflationary? If businesses are massively going bankrupt, then
it's because their products and services are not being sold, meaning
that prices will come down, causing deflation.

I know that there have been wild periods of inflation, as in the
examples you're giving, and also Zimbabwe's inflation rate is over
1000% as of last week, but I don't think those examples apply to the
US.

I'm certainly engaging in guesswork here, but I think that there's a
split. It's possible for a currency to gain or lose value
within the country's economy, and do the opposite
outside the country's economy -- if the country is big enough.

The case we're most familiar with is Weimar Germany, where the
currency was inflated in order to effectively reduce reparations to
France. In other cases, a country inflates its currency during war
in order to be able to purchase imported goods. But the US is large
enough that it may be able to get through the war without having to
purchase much from outside the country.

In that case the currency would be deflationary within the US, and
this is what the model I've used predicts.

But the model I used says nothing about the value of the currency
outside the country. So the scenarios you're discussing could be
quite possible when evaluated in this way.

Originally Posted by Zarathustra

> If . . . the East Asians dump Treasuries (killing the dollar
> internationally) and the Fed responds to a domestic crisis by
> turning on the presses, then we will have one hell of a
> inflationary contraction. These responses are not written in
> stone, of course. But in a dollar crisis, what else could global
> investors do? If half their portfolios (or more) are in dollars,
> dollars are rapidly losing value, and therefore their net worth is
> crashing before their eyes, what would they do? I would imagine --
> SELL !!!!

> Furthermore, Bernanke seems very, very wet to me. No Paul "Sahara"
> Volker is he. Helicopters dropping cash is the likely scenario.

> There are two differences I see between the two contractionary
> scenarios. In an inflationary case, gold will go to the moon and
> good money will be destroyed with bad during the contraction,
> leaving us weakened and politically more unstable than otherwise.

> In a deflationary case, gold will probably be a losing proposition
> and bad money will be flushed from the system, leaving us on a
> even keel when it's over and make it less likely (but still
> possible) that we'll have political chaos in the interim.

As you say, the actions of Bernanke and the Fed in the crisis era are
not predictable. But I'm assuming that the Fed will NOT turn on the
printing presses, because they won't have to to mobilize the country
for war. As for the long bonds clogging the market, I think we'll
have the option of announcing that we'll delay redemption, though I
admit that this is such an unprecedented move, it may backfire and
have the inflationary scenario that you describe.

I hope this makes sense because it's 2 am, and everything is getting
jumbled in my brain. But I think it makes sense.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Yes, it made sense.

Thanks.

But I do think one can have a scenario where people are buying fewer products but the price level still rises IF the printing presses are on.

It is my understanding that Confederal America, the later Confederate South, and Weimar, all experienced this. The first led to a constitutional crisis. Due to states printing money to pay war debts, creditors pressed hard to get extant debts ASAP creating hardship -- to say nothing of the problem of new credit. We could have had a score of Shay's Rebellions if the situation hadn't been addressed.

The second led to the South's destitution. So much good money was destroyed along with the bad. And the third, by hurting good creditors, upset the business class who were more than happy to get behind Hitler when things looked dicey again a few years later.

As desirable as a deflationary contraction would be in the long term, an inflationary "solution" may be the siren song the Fed listens to. What that song sounds like to me vaguely resembles helicopters over the horizon.

Dear Sean,

Originally Posted by Zarathustra

> Yes, it made sense. Thanks.

> But I do think one can have a scenario where people are buying
> fewer products but the price level still rises IF the printing
> presses are on.

> It is my understanding that Confederal America, the later
> Confederate South, and Weimar, all experienced this. The first led
> to a constitutional crisis. Due to states printing money to pay
> war debts, creditors pressed hard to get extant debts ASAP
> creating hardship -- to say nothing of the problem of new credit.
> We could have had a score of Shay's Rebellions if the situation
> hadn't been addressed.

> The second led to the South's destitution. So much good money was
> destroyed along with the bad. And the third, by hurting good
> creditors, upset the business class who were more than happy to
> get behind Hitler when things looked dicey again a few years
> later.

> As desirable as a deflationary contraction would be in the long
> term, an inflationary "solution" may be the siren song the Fed
> listens to. What that song sounds like to me vaguely resembles
> helicopters over the horizon.

You're welcome. Glad that you're back.

Well, I'm not sure that deflation is all that desirable, since it can
be pretty destructive too, perhaps even more destructive than
inflation.

But how do you see your scenario working out? I'm particularly
thinking that Bernanke would have a lot of power but not absolute
power, and so he'd have to convince the other Fed members. If
inflation were moderate, then there'd be no issue. But if it became
clear to Congress that the dollar was becoming worthless, then they
might decide "rein the Fed in."

So what would be the political scenario that would lead to the
massive inflation scenario? Is it something that would HAVE to
happen, an unavoidable part of the 4T since the country is already in
so much debt, or would we be still have the ability to make a choice?

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Look, Ma, the boys are getting along. Could this be another 4T indicator?

—Croakmore

Originally Posted by John J. Xenakis

Well, I'm not sure that deflation is all that desirable, since it can
be pretty destructive too, perhaps even more destructive than
inflation.

I am not so sure. Of course deflationary contraction is painful. No doubt and no argument. But when it's over, there's more good money than bad. (At least relatively) bad debt is flushed out of the economy. With the inflationary kind, you don't even have that to show for the (real GDP) contraction. Indeed, creditors, who tend to be the powers-that-be, or related to them somehow, seem to be more likely to give up on the status quo under inflationary contraction. When you lose the "powers", a "revolution" against the current regime becomes more likely.

Originally Posted by John J. Xenakis

But how do you see your scenario working out? I'm particularly
thinking that Bernanke would have a lot of power but not absolute
power, and so he'd have to convince the other Fed members. If
inflation were moderate, then there'd be no issue. But if it became
clear to Congress that the dollar was becoming worthless, then they
might decide "rein the Fed in."

Good question. I guess the question is what will be the Fed's priority? Saving the housing market or saving the dollar's reserve currency status. In the end, I don't think it matters. We're screwed regardless. But if the housing market is seen as primary in the early analysis, expect inflation. If the reserve currency is seen as more important, expect deflation.

Of course there is more to it than that, isn't there? Even if the Fed supports housing equity, the inflation generated by low (real) interests rates alone will likely eat into said equity (in real terms) and counteract the Fed's intentions anyway. MOREOVER, the subsequent crash of the dollar internationally would make petroleum and other imports horribly more expensive further fueling the inflation. The housing bubble the Fed would have been trying to protect would "pop" relatively (inflation-adjusted) instead of in absolute terms, if you follow me. The economy goes into a death spiral regardless.

If the Fed supports the dollar as the reserve currency, high interests rates will kill the housing market, and much more besides. The great American consumption engine that's been driving this whole insane "globalization" mania of the past ten years would obviously blow a piston rod and seize. America the "safe haven" for investment would become no such thing as it's economy imploded. The dollar would probably suffer anyway, though not as badly as in the first scenario. We have a death spiral regardless.

What both scenarios have in common is a sigificantly weakened dollar, and a significant reduction in global trade, and whopping contraction of certain economies, most notably China's and America's (the Great Producer and the Great Consumer -- but note, China will be the one left (physically) with a much increased industrial infrastructure; America will be left somewhat emaciated by the ravishes of the globalization race).

And what both also scenarios have in common is a shocking reduction in the American standard of living.

BTW, you've mentioned before that the goldbug position doesn't impress you. If the dollar does lose it's reserve currency status, which looks very likely at some point in the short to medium term, does the Euro or Yen have the strength to pick up the slack, even in a period of trade contraction? I say the Yen definitely doesn't, and the Euro may not. What's left? A currency of some aureity, perhaps? At least as a supplemental function? Even supplementally, it's value could skyrocket beyond belief, at least for a time.

Just a thought.

Originally Posted by Croakmore

Look, Ma, the boys are getting along. Could this be another 4T indicator?

So far so good.

FWIW:

JJX, are you anywhere about? Here is an dynamical historical model that incorporates chaos theory by invoking a tri-lateral complex called the "Triple Helix": (1) wealth generation (industry), (2) novelty production (academia), and (3) public control (government).

Originally Posted by Loet Leydesdorff & Martin Meyer

When two selection environments operate upon each other, mutual shaping in a co-evolution along a particular trajectory is one possible outcome. When three selection environments are involved, more complex dynamics can be expected as a result of interactions involving bi-lateral and tri-lateral relations. Three selection environments are specified in the Triple Helix model: (1) wealth generation (industry), (2) novelty production (academia), and (3) public control (government). Furthermore, this model somewhat reduces the complexity by using university-industry-government relations for the specification of the historical conditions of the non-linear dynamics. Whereas the historical analysis informs us about how institutions and institutional arrangements carry certain functions, the evolutionary analysis focuses on the functions of selection environments in terms of outputs. One can no longer expect a one-to-one correspondence between institutions and functions; a statistics is needed for the evaluation of how, for how long, and to what extent institutional arrangements enhance synergies among different selection environments. The empirical contributions to this Triple Helix issue point in the direction of “rich ecologies”: the construction of careful balances between differentiation and integration among the three functions.

While Darwinian "selection" may be useful for modeling history, I don't see a role for the randomizing effects of "drift," which would account for non-selective aspects of social evolution. I question just how far one can stretch these metaphors.

—Croakmore

Sigh. 21 pages in a pdf file written in the register a linguist friend of mine calls High Academic Regalian, with which I'm losing patience. (Creeping senility?)

Dear Richard,

Originally Posted by Croakmore

> JJX, are you anywhere about?

Thanks for your posting and for your message telling me that it's
there. I've really been derailed recently by other work, but I'm
going to try to spend more time again in this forum.

Originally Posted by Croakmore

> Here is an dynamical historical model that incorporates chaos
> theory by invoking a tri-lateral complex called the "Triple
> Helix": (1) wealth generation (industry), (2) novelty production
> (academia), and (3) public control (government).
> http://users.fmg.uva.nl/lleydesdorff...h5/rp06th5.pdf

Well, Richard, since you've rattled my cage, and have a lot to catch
up on, I'll take this opportunity to rant and rave about a number of
things.

Originally Posted by Loet Leydesdorff & Martin Meyer

> When two selection environments operate upon each other, mutual
> shaping in a co-evolution along a particular trajectory is one
> possible outcome. When three selection environments are involved,
> more complex dynamics can be expected as a result of interactions
> involving bi-lateral and tri-lateral relations. Three selection
> environments are specified in the Triple Helix model: (1) wealth
> generation (industry), (2) novelty production (academia), and (3)
> public control (government). Furthermore, this model somewhat
> reduces the complexity by using university-industry-government
> relations for the specification of the historical conditions of
> the non-linear dynamics. Whereas the historical analysis informs
> us about how institutions and institutional arrangements carry
> certain functions, the evolutionary analysis focuses on the
> functions of selection environments in terms of outputs. One can
> no longer expect a one-to-one correspondence between institutions
> and functions; a statistics is needed for the evaluation of how,
> for how long, and to what extent institutional arrangements
> enhance synergies among different selection environments. The
> empirical contributions to this Triple Helix issue point in the
> direction of “rich ecologies”: the construction of careful
> balances between differentiation and integration among the three
> functions.

I really have to laugh at this. These guys must be a couple of
idiots to write a ridiculous sentence like this. They could have
written this:

> When two entities, like government and industry, interact with
> one another, the interactions will be complex, and the results
> hard to predict. When you add a third entity, academia, you get
> something like the famous three-body problem of physics, which
> cannot be solved except by approximation. The interaction of all
> three entities may be so complex that a more sophisticated
> methodology, such as Chaos Theory, will be required to get any
> meaningful trend results.

My rewrite wouldn't exactly win a Nobel Prize for Literature, but at
least it's an attempt to make sense. Leydesdorff and Meyer are
attempting to show how scholarly and educated they are by making as
little sense as possible, with the result that they look like idiots.

And so,

Originally Posted by The Grey Badger

> Sigh. 21 pages in a pdf file written in the register a linguist
> friend of mine calls High Academic Regalian, with which I'm losing
> patience. (Creeping senility?)

I agree with these comments completely.

Furthermore, while the authors mention Chaos Theory, I can find
nothing in their 21 page paper that makes use of Chaos Theory.

Alan Greenspan always gave speeches in an obscure "economist"
dialect, but he had reason to. On my website, I always went to a lot
of trouble to translate Greenspan's speeches into English. He was born
in 1924, and has seen all this before, so his speeches contain guarded
references to an upcoming repeat of the Great Depression, but he
obscured them so thoroughly that none of the super-intelligent
analysts and journalists ever seen to understand them, which is
Greenspan's intent.

But Leydesdorff and Meyer have no such excuse. They're being obscure
to prove that they're smart, which means they're incredibly stupid.

Now that I've ranted about that, let me rant about something else.

The "Triple Helix" concept (if you forget the pretentious name) is
quite worthwhile, but it's useless unless they take generational
patterns into account.

On my web site I'm constantly contemptuous of pundits, journalists,
politicians and high-priced analysts who are incapable of seeing even
the most obvious generational patterns. There are many examples on
my web site, so I'll give just one here: The median age of the
entire population of the Gaza Strip is 15.6, and yet not one news or
analytical article ever mentions this fact, or its consequences.
You don't have to be a rocket scientist or know anything about
Generational Dynamics to understand that a media age of 15.6 means
that the Gaza strip is being run by children. We know that children
in the US get all their news from the Comedy Channel, and we can
assume that children in the Gaza strip get their news from something
similar. And so, the Gaza strip is not being run by Abbas or Fatah
or Hamas -- it's being run by children who learn about world events
from the Palestinian Comedy Channel.

Similarly, Leydesdorff and Meyer go into these analyses of the
effects of government, academia and industry on one another, but they
never consider the effect of generational changes, which makes any of
their conclusions pretty much useless.

Now, having ranted about that, let me go on to what I see is the
value of their concept.

The Kondratiev cycle is something of a mystery. If you ignore the
generational bubbles and their aftermath from, say, the stock market
index, then you get a technology cycle about 40-50 years long.

You can see this in the following diagram, which I've posted many
times:



The question is: Where does this 40-50 year cycles come from? What's
the driver?

The "Triple Helix" stuff might provide an answer, and I'll give a
completely different kind of example to show how.

Here's a graph of the population density of lemmings and owls in a
certain region (I forget where - this is from Peter Turchin's book,
Complex Population Dynamics):



As you can see, the lemmings become almost extinct, but then every
four years or so the ground is covered with them (giving rise to the
myth that lemmings follow one another off a cliff).

The owl eats lemmings (among other things). So as the number of
lemmings grows, they get eaten by more owls. When all the lemmings
get eaten, then the owls die off as well. So the result is a 4-year
cycle.

How can we model this relationship between owls and lemmings? We can
do so using differential equations.

Suppose you have just one species. Then we know that the population
of the species grows exponentially (given enough resources and no
predators). We can model this with a differential equation:

> dP/dt = K x P

In other words, the growth of the population (dP/dt) is proportional
to the size of the population. (That is, if half the population is
female, and if 1/3 of the females give birth each year, then K =
(1/2)*(1/3) = 1/6.)

The solution to this differential equation is P(t) = K e^t, the
exponential function with t (time) as an exponent. That's
exponential growth.

But when we have two entities -- lemmings and owls -- it get more
complicated. If you want to model it, then you have (at least) two
differential equations. There is a well-known "Lotka-Volterra model"
of predator-prey cycles, which uses these two differential equations
for predator and prey population functions, X and Y:

> dX/dt = c a X Y - k X
> dY/dt = - a X Y + b Y

If you puzzle over these two differential equations for a while, then
you see that the growth of either population (predator or prey, X or
Y) is modified by a constant times the product XY of the two
populations. It's this term that represents the owls eating the
lemmings.

The solution to these two simultaneous differential equations depends
on the values of the constants, but it's no longer exponential
growth. Instead it's a cyclic population function, and with the
correct constants, you can model the graph of lemmings and owls shown
above.

So this brings us back to the "Triple Helix", and its measurement of
three different entities -- government, industry and academia.

If you can find a way to represent the relationships between these
entities with appropriate differential equations, then you may be
able to model the 40-50 year Kondratiev cycle.

That's what I see as the value of the Triple Helix concept, and it
certainly seems to me to be worth exploring.

I found a summary of what some of these relationships might be on
another web page:

Originally Posted by Etzkowitz

> 1. There is an internal transformation in each of the helices.
> Examples: companies are developing ties through strategic
> alliances; universities are becoming more ‘entrepreneurial’ (Note:
> this is very much related to Etzkowitz’s hypothesis about the
> arrival of the “second academic revolution”).

> 2. The institutional spheres can increasingly bring about
> transformation in another sphere. Example: US government revising
> rules of intellectual properties rights.

> 3. A new overlay of trilateral linkages, networks, and
> organizations among the three helices has been created to
> institutionalize interface and stimulate organizational creativity
> and regional cohesiveness. Example: Joint Venture Silicon Valley
> encouraging interaction among members in the three spheres.

> 4. The inter-institutional networks have a recursive effect on the
> originating spheres as well as the larger society. Example:
> because universities have taken upon the mission of economic
> development, the Mertonian norm of science may no longer apply.

> http://www.mindspring.com/~cwjordan/triplehelix.html

These four major processes are pretty obscure, but the examples at
least give some limited insight into what the hell they're talking
about.

If these kinds of processes can be formulated as differential
equations that can be solved, at least approximately, then it may be
possible to find a mathematical model explaining the Kondratiev
cycles.

Sincerely,

John

John J. Xenakis
john@GenerationalDynamics.com
http://www.GenerationalDynamics.com

Well, John, I haven't taken sides in this historical modelling business. All of those models seem highly speculative to me. Would I be any more speculative if I proposed that a national treasury is like a water storage tank and its flow of cash can be modelled using Bernoulli's Equation? And other than the Law of Supply and Demand I don't know of any principles that liken predator-prey models to sociological phenomena. Lotka-Volterra gets a lot of sociological exercise anyway. Furthermore, the use of chaos theory in sociology seems to me like you guys are way out there winging it through the thin air of metaphors.

So, having said that, I liked your analysis of Leydesdorff & Meyer. I don't think English is their first language, however, which may help to explain their stilted narrative (Grey Badger?). Beyond that I didn't find their model any more or any less credible than others. My biggest issue all along is the need to bring the operative principles to the forefront, and to justify their assumptioms required to implement the model. From where I stand, you and Mike A place less empahsis on operative principles and more emphasis on detail-for-detail anaysis. But of course I am not a sociologists. I just dabble in biological evolution. And when I read, for example, the physicist Stuart Hameroff proposing that the emergence of consciousness was what caused the Cambrian Explosion to explode a half-billion years ago I can hardly criticize other disciplines for their adventurous hypotheses.

—Croak

John, apart from my pedantic bickering over socioeconomic models, I wonder what you think about a possible "Peak Dow" occurring right now. Does your model account for a Dow meltdown? Does Mike A's? Do your drivers work predictably in these bubbly times? My model is good for other things less sensitive; for example, I'm predicting snow in Canada by Christmas.

—Croak

Dear Richard,

Originally Posted by Croakmore

> John, apart from my pedantic bickering over socioeconomic models,
> I wonder what you think about a possible "Peak Dow" occurring
> right now. Does your model account for a Dow meltdown? Does Mike
> A's? Do your drivers work predictably in these bubbly times? My
> model is good for other things less sensitive; for example, I'm
> predicting snow in Canada by Christmas.

I've been saying since 2002 that the Generational Dynamics predicts
that we're entering a new 1930s style Great Depression, and that the
market would fall to the Dow 3000-4000 level, probably by the
2006-2007 time frame.

I always like to point out that Generational Dynamics tells you what
your destination is, but doesn't tell you how you're going to get
there.

A lot of the theoretical development I've been doing in the last four
years is to find ways to improve the model so that it gives accurate
"short-term forecasts" -- i.e., tells you more about how you're going
to get to the final destination.

Generally speaking, the methodology I've developed takes advantage of
the fact that you know the final destination and then uses that
information to interpret current events to provide an accurate
short-term forecast.

For example, suppose that you and I are having lunch in downtown
Boston. All of a sudden I get up and say, "Well, gotta go, I have
a long way to drive."

I leave, and you ask yourself, "What highway did he get on?"

Well, there are many highways going out of Boston, so basically you
have no idea.

But suppose you know my final destination -- suppose you know that
I'm driving to L.A. Then you can conclude that, WITH HIGH
PROBABILITY, I'm going to driving west on the Mass Turnpike.

So that's how it works. You combine information about the final
destination with information about current events to make a
probabilistic short-term forecast.

So now let's return to your question.

Last month I wrote an essay for my web site called "Speculations
about a stock market panic and crash."
http://www.generationaldynamics.com/....i.060530panic

This is exactly this kind of short-term forecasting that I've been
describing. The final destination is a stock market crash - known
with certainty. But will the crash occur soon?

This essay examines current stock market patterns and makes an
assessment as to the chance of a stock market crash occurring very
soon.

The net is this: We are now in a pattern which is typical of patterns
preceding a major stock market panic.

As I'm writing this, the Nikkei is down 315 points (2%), with other
Asian markets falling almost as much.

Earlier today, the Dow fell 120 points (1%).

A panic could occur tomorrow, next week, next month or next year --
it's impossible to predict -- but the climate is right today.

As for your "pedantic bickering over socioeconomic models," it only
bemuses me.

I've been using the Generational Dynamics model to make predictions
on my web site for years now, and I've had 100% success. I predicted
that the U.N. would never stop the Darfur massacre, and the Darfur
massacre is still ongoing. I predicted that there would be NO civil
war in Iraq, contradicting widely held public beliefs, and there's
been no civil war in Iraq. I predicted that the Mideast would
descend into chaos following Yasser Arafat's death, contradicting
widely held political beliefs, and, as I write this, Israeli tanks
are invading Gaza and Hamas is preparing for war.

So bicker away, Richard. It means nothing to me because the
Generational Dynamics model has been right over and over and over
again.

Sincerely,

John

John J. Xenakis
john@GenerationalDynamics.com
http://www.GenerationalDynamics.com

Originally Posted by John J. Xenakis

...But suppose you know my final destination -- suppose you know that
I'm driving to L.A. Then you can conclude that, WITH HIGH
PROBABILITY, I'm going to driving west on the Mass Turnpike.

So that's how it works. You combine information about the final
destination with information about current events to make a
probabilistic short-term forecast.

Huh?

Originally Posted by John J. Xenakis

So now let's return to your question.

Last month I wrote an essay for my web site called "Speculations
about a stock market panic and crash."
http://www.generationaldynamics.com/....i.060530panic
...
A panic could occur tomorrow, next week, next month or next year --
it's impossible to predict -- but the climate is right today.

As for your "pedantic bickering over socioeconomic models," it only
bemuses me.

I might want to bicker pedanticaly over the need to install some measure of temorality into your predictive model. Otherwise, wouldn't everything be settled conclusively when the sun enters its red giant phase about 4 billion years from now?

Originally Posted by John J. Xenakis

I've been using the Generational Dynamics model to make predictions
on my web site for years now, and I've had 100% success. I predicted
that the U.N. would never stop the Darfur massacre, and the Darfur
massacre is still ongoing. I predicted that there would be NO civil
war in Iraq, contradicting widely held public beliefs, and there's
been no civil war in Iraq. I predicted that the Mideast would
descend into chaos following Yasser Arafat's death, contradicting
widely held political beliefs, and, as I write this, Israeli tanks
are invading Gaza and Hamas is preparing for war.

Jesus and Rush Limbaugh have deserted me, so I'm going 100% with you, John, given your impeccable prognostication. Yes, I'm now 100% sure that there is no civil in Iraq, 'cause you said so, and I'm 100% sure that Bush knows what he's doing over there (and over here), 'cause you love him. And if you are 100% sure that there is no civil war going on in Iraq then, gosh, I'm 100% sure the troops will all be home by Christmas. With percentages like these who needs statistics?

I'm predicting there will be no solution to any Mid-Eastern problem until we nuke 'em all to smithereens. The operative principles in my model are 'Bring 'em on,' 'In God We Trust,' Stay the course,' and 'Mission accomplished.' And I'm 100% sure that 100% of what I am sure about is 100% better than anything less than 100% of what I don't know.

Any chance of you stating succinctly, up front, and with 100% clarity what your operative principles are, John, and your prevailing assumptions, too? I've been to your website and I can't find them there. You and Mike A are genuine masters at evading a principled argument.

—Croakmore

Dear Richard,

Originally Posted by Croakmore

> Huh?

I thought it was pretty clear. I tried to write it at a high school
reading level. Should I try again at a fourth grade reading level?

See Dick and Jane drink lemonade. Do you hear that? That's Jane's
mommy, calling Jane. "Jane, come inside!" says Jane's mommy. See
Jane. See Jane say "bye-bye." See Jane stand up. See Dick. See
Dick point at Jane's house next door. Dick says, "I think you'll go
that way, because that's where you live!!"

Is that easier?

Originally Posted by Croakmore

> I might want to bicker pedanticaly over the need to install some
> measure of temorality [temporality] into your predictive model.
> Otherwise, wouldn't everything be settled conclusively when the
> sun enters its red giant phase about 4 billion years from
> now?

The generational model, originally developed by Strauss and Howe,
provides for time frames substantially shorter than 4 billion years.

Originally Posted by Croakmore

> Jesus and Rush Limbaugh have deserted me, so I'm going 100% with
> you, John, given your impeccable prognostication.

You couldn't have made a better choice.

Reading Acts 1, it's pretty clear that Jesus expected his second
coming to occur in the lifetimes of those present. He got that
wrong.

Rush Limbaugh just makes political predictions.

On the other hand, the Generational Dynamics model, which is based on
the generational theory originally developed by Strauss and Howe, and
is the subject of this entire forum, has been 100% successful.

Handling temporality is one the problems that has to be solved.

Originally Posted by Croakmore

> Yes, I'm now 100% sure that there is no civil in Iraq, 'cause you
> said so

Not because I said so, but because the Generational Dynamics model
says so.

Originally Posted by Croakmore

> I'm 100% sure that Bush knows what he's doing over there (and over
> here), 'cause you love him.

See, now you've exposed what's really going on. If you actually
bothered to read my web site, you'll see that I don't agree with any
politicians. I'm just as critical of Bush as I am of politicians in
general.

But you're like everyone else who can't see anything going on in the
world except through your political filter, which involves attitude
toward Bush. You reject entire branches of mathematics because of
your political beliefs. You reject any model that doesn't conform to
your political beliefs. What you don't realize is that you have a
model too -- your model is: "I predict that everything Bush does will
turn out to be wrong." And since "right" and "wrong" are also subject
to your political interpretation, you end up proving yourself right.

In the end, your "bickering" is nothing more than the usual political
nonsense that we hear all the time. Really, you're just mirror image
of Rush Limbaugh, spouting as much nonsense as he spouts, except that
he's more honest than you because at least he admits that he's a
politician.

Originally Posted by Croakmore

> And if you are 100% sure that there is no civil war going on in
> Iraq then, gosh, I'm 100% sure the troops will all be home by
> Christmas. With percentages like these who needs statistics?

Where do you get that prediction? I assume you've gotten it from
Democratic talking points, because I've been hearing Democratic party
leaders on the news saying that Bush has a secret plan to get all the
troops out by Christmas.

I would caution you to be careful about making political predictions.
Political predictions are for "chaotic events" (in the sense of Chaos
Theory), and you're bound to be wrong many times.

I like to say that it's easy to get a million predictions right; just
make two million predictions.

So keep posting political predictions, and you'll be sure to get some
of them right.

Originally Posted by Croakmore

> I'm predicting there will be no solution to any Mid-Eastern
> problem until we nuke 'em all to smithereens.

Once again - you're making a prediction that can't be substantiated
in any way I know of. Maybe you'll be right, maybe you'll be wrong.

(Actually, I'm pretty sure you'll be wrong; I don't believe it's
physically possible to nuke 'em all to smithereens. But feel free to
argue the point.)

Originally Posted by Croakmore

> The operative principles in my model are 'Bring 'em on,' 'In God
> We Trust,' Stay the course,' and 'Mission accomplished.'

Shall we call your principles the "Dale Carnegie Methodology"?

Originally Posted by Croakmore

> And I'm 100% sure that 100% of what I am sure about is 100% better
> than anything less than 100% of what I don't know.

I'm less than 100% sure what you mean by this. Can you clarify?

Originally Posted by Croakmore

> Any chance of you stating succinctly, up front, and with 100%
> clarity what your operative principles are, John, and your
> prevailing assumptions, too? I've been to your website and I
> can't find them there. You and Mike A are genuine masters at
> evading a principled argument.

Actually, the essay I referred you to last time,
http://www.generationaldynamics.com/....i.060530panic
contains a pretty good summary.

If you'd like more details, then read my two books, Generational
Dynamics: Forecasting America's Destiny, and Generational
Dynamics for Historians, both of which can be read for free on my
web site.

As for "evading a principled argument," you don't make principled
arguments. You make political arguments, based almost entirely on
your emotional political beliefs. Your arguments are just as
unprincipled as Rush Limbaugh's are. Don't expect me to stoop to
that level, just because you did.

Sincerely,

John

John J. Xenakis
john@GenerationalDynamics.com
http://www.GenerationalDynamics.com

Croakmore, you started it. Go to your room.

John, it's time for your quiet time. Why don't you dit down and read a book?

And I don't want to hear one more word out of you until supper time!

Yomama

Originally Posted by John J. Xenakis

...See Dick and Jane drink lemonade. Do you hear that? That's Jane's
mommy, calling Jane. "Jane, come inside!" says Jane's mommy. See
Jane. See Jane say "bye-bye." See Jane stand up. See Dick. See
Dick point at Jane's house next door. Dick says, "I think you'll go
that way, because that's where you live!!"

I thought Dick and Jane drank Kool Aid.

Originally Posted by John J. Xenakis

Actually, the essay I referred you to last time,
http://www.generationaldynamics.com/....i.060530panic
contains a pretty good summary.

OK, John, I'm going over to your site for another reading, and I am 100% sure, sort of, that I'll find those principles. I'll feel 100% stupid if I do.

Originally Posted by John J. Xenakis

...Don't expect me to stoop to
that level, just because you did.

A man never stands so straight as when he stoops to help a frog.

—Croak

Originally Posted by The Grey Badger

Croakmore, you started it. Go to your room.

John, it's time for your quiet time. Why don't you dit down and read a book?

And I don't want to hear one more word out of you until supper time!

Yomama

Mom, may I come out for cocktail hour, PLEASE?

Not until you can play nicely with the other children. And no TV or video games!

John, does it seem that 5/26 cannot be the smaller peak now?

And your Dow Jones Archive hasn't been in the right place in the in-depth analysis section since you updated in late May.

John,

As promised, I went to your website and spent a considerable amount of time there, trying to find the principles of GD and their supporting arguments. I’ve determined that indeed your principles are well in place and fairly well justified. It took some work for me to get there because I was biased by a different way to approach the subject matter scientifically. My bias is perhaps more of a preference obtained over the years through scientific discourse and publications. My approach is Old World, I suppose: first the problem question, then the solution hypothesis, then the purpose/objective summary with a clear statement of the proposed principles, their assumptions, and how those principles assemble to formulate the answer. The rest are details, albeit important details.

I don’t really know why everybody needs to do it my way. Your way seems all right to me, after having spent enough time with the GD hypothesis to assemble things in my mind according to my preferences. I see these as your operating principles:

1. Principles of supply and demand — perfunctory, of course;

2. Principles of co-oscillating cycles — also perfunctory, with a variety of modeling approached available (e.g., S&H generational model, Kondratiev stock-cycling model);

3. Principles of Malthusian-type population growth dynamics — including predator-prey co-oscillations and limit cycles (e.g., Lotka-Voltera, Margelef);

4. Principles of stock-market dynamics — including price/earning ratios and exchange values;

5. Principles of mass psychology — subjective evaluations of euphoria and hysteria;

6. Principles of chaos theory — certain kinds of co-oscillating systems, including attractors, butterfly effects, non-predictability, phase space, heat/entropy.

Then there is this matter of a concise description of the model. I don’t see it coming forward as much as I would prefer. I’d like to see a co-oscillating (coupled) structure like this, for example:

dx/dt = f(x,y)
dy/dt = g(x,y),

where all the differential functions are precisely specified. But that may be asking for too much, at least for now, when there are so many factors that must accounted for.

I can see better now what you are trying to do. It is as good as anything I could do with the subject matter, only organized differently. Yes, my bickering has been pedantic, I’ll admit. You biggest mistake is putting up with it.

—Croak

That was handsome of you, Croakmore. You all shake hands, now, y'hear?

Mama Badger

Originally Posted by Croakmore

John,

As promised, I went to your website and spent a considerable amount of time there, trying to find the principles of GD and their supporting arguments. I’ve determined that indeed your principles are well in place and fairly well justified. It took some work for me to get there because I was biased by a different way to approach the subject matter scientifically. My bias is perhaps more of a preference obtained over the years through scientific discourse and publications. My approach is Old World, I suppose: first the problem question, then the solution hypothesis, then the purpose/objective summary with a clear statement of the proposed principles, their assumptions, and how those principles assemble to formulate the answer. The rest are details, albeit important details.

I don’t really know why everybody needs to do it my way. Your way seems all right to me, after having spent enough time with the GD hypothesis to assemble things in my mind according to my preferences. I see these as your operating principles:

1. Principles of supply and demand — perfunctory, of course;

2. Principles of co-oscillating cycles — also perfunctory, with a variety of modeling approached available (e.g., S&H generational model, Kondratiev stock-cycling model);

3. Principles of Malthusian-type population growth dynamics — including predator-prey co-oscillations and limit cycles (e.g., Lotka-Voltera, Margelef);

4. Principles of stock-market dynamics — including price/earning ratios and exchange values;

5. Principles of mass psychology — subjective evaluations of euphoria and hysteria;

6. Principles of chaos theory — certain kinds of co-oscillating systems, including attractors, butterfly effects, non-predictability, phase space, heat/entropy.

Then there is this matter of a concise description of the model. I don’t see it coming forward as much as I would prefer. I’d like to see a co-oscillating (coupled) structure like this, for example:

dx/dt = f(x,y)
dy/dt = g(x,y),

where all the differential functions are precisely specified. But that may be asking for too much, at least for now, when there are so many factors that must accounted for.

I can see better now what you are trying to do. It is as good as anything I could do with the subject matter, only organized differently. Yes, my bickering has been pedantic, I’ll admit. You biggest mistake is putting up with it.

—Croak

B-b-b-bu-bu-b-bu-b-but Richard, where are the generational principles?

John

Originally Posted by John J. Xenakis

B-b-b-bu-bu-b-bu-b-but Richard, where are the generational principles?

John

Cyclical co-oscillations of conditionally nurtured cohorts who collectively occupy the same generational phase space. I thought you that. Oh, well.

—Croak